Monday, February 14th, 2011
Last month, when the House conservative caucus proposed scrapping a program that has provided the poor with free legal assistance for nearly four decades, it felt like déjà-vu. Indeed, this provision of the GOP's Spending Reduction Act of 2011 was simply the latest salvo against an entity under siege by conservatives since the day it was conceived.
Legal Services Corporation (LSC) is a federally funded nonprofit that doles out money ($420 million this year) to 136 independent groups providing legal services in hundreds of communities around the nation. Debt collectors knocking down your door? Foreclosure mill trying to take your house? If you can't afford a lawyer and your family is hovering near the federal poverty line, then the LSC is your ticket to legal representation.
If you're lucky, that is. The corporation's budget has always been limited, and over the past few years, as more and more Americans grapple with civil cases involving employment, foreclosures, debt collections and bankruptcy, soaring demand for legal help has overwhelmed the LSC's limited resources.
But the current crisis in the civil courts isn't a product of the Great Recession. It's the natural consequence of a decades-long campaign by agricultural interests, Christian conservatives and their congressional allies who would prefer to do away with the LSC altogether.
Publicly funded legal aid got its start under the Johnson administration, which recognized that lawyers for the poor were a key element of its war on poverty. In 1964, Congress passed the Economic Opportunity Act, and beginning the next year, with the government's help, nonprofits began providing free community legal services, assisting broke clients with life's mundane issues — eviction and custody battles and so forth. With their challenges to public housing programs and school districts, legal aid lawyers antagonized politicians, but they were enormously popular among their clients. When the Nixon administration began dismantling Johnson's Office of Economic Opportunity, legal services survived. In 1974, Congress passed legislation creating the Legal Services Corporation, which President Nixon signed into law days before his resignation.
Among the LSC's early opponents was the American Farm Bureau Federation, whose members were rankled by lawsuits filed on behalf of agricultural workers, many of them immigrants, in cases involving unpaid wages and poor working conditions. The bureau argued that these cases were often frivolous matters and that underpayment of wages was usually unintentional. In 1995, bureau lobbyist Bryan Little assailed the LSC as a "money-making machine" for the American Bar Association.
Legal aid faced another formidable foe in the Christian Coalition and Ralph Reed, then its executive director, who claimed the LSC "subsidizes divorce and illegitimacy." The coalition's 1994 Contract With the American Family sought the complete defunding of the LSC, alongside platform planks on "Restoring Respect for Human Life" and "Restoring Religious Equality."
The following year, with Newt Gingrich installed as speaker of the House, congressional Republicans heeded the call with a proposal to phase out the LSC's funding over three years. Among the program's most vocal critics were Sen. Phil Gramm of Texas, whose spokesman called it "less an instrument for the delivery of legal services than a machine with a Democratic political agenda as its primary purpose." Indiana Congressman Dan Burton was among a group of House Republicans putting out a weekly "LSC Hall of Shame" newsletter. "Legal services," his spokesman argued, "wastes taxpayer dollars by spending millions on outlandish test cases." GOP Congressman Robert Dornan of California called for abolishing the LSC entirely, adding that "it's time to defund the left."
In 1996, Congress struck a compromise. The LSC could continue to exist, but its budget would be slashed by one-third, and crippling restrictions would be imposed on its network of lawyers. By this time, the LSC had been under attack for more than two decades and had managed to stay afloat despite dwindling funding — adjusted for inflation, its budget peaked back in 1981 and has been shrinking ever since. "Congress didn't want to cut it entirely, but they didn't want to give them a blank check for all these controversial cases," says Ken Boehm, chair of the National Legal and Policy Center and a longtime LSC critic. "So they decided to cut the baby."
The new restrictions meant that LSC-funded lawyers could no longer represent prisoners or most immigrants — legal and undocumented alike. They also were barred from collecting court-awarded attorney's fees (a restriction rescinded in 2009), from engaging in any sort of policy advocacy and from alerting elected officials to problems they'd encountered — unless invited in writing to do so. The restrictions "deprived low-income clients of some of the tools that every other litigant has available to them," says Rebekah Diller, an expert on the civil courts at the Brennan Center for Justice at New York University School of Law. The restrictions included what legal aid advocates call a "poison pill": Any group taking a single dollar from the LSC could not participate in any of the restricted activities, even if they planned to use state or private funding for those purposes.
Perhaps most significantly, the law included a ban on class-action lawsuits, which represented a tiny fraction of the cases but packed a big punch. Lawyers from South Brooklyn Legal Services, for instance, had won a class action securing disability benefits for women with HIV. Legal aid lawyers in Maryland had prevailed on behalf of state prisoners contesting overcrowded living conditions. And lawyers from around the country took part in a major national effort challenging the way Social Security reviews were handled.
But what really got under the skin of the critics were the welfare-reform cases. On several occasions, publicly funded lawyers had come before the Supreme Court to challenge various welfare policies, including a regulation that required "a man in the house" and rules that denied benefits to people with green cards, people moving to new states and children from large families. With three major cases, their litigation ended up boosting the nation's welfare tab by $400 million to $500 million annually.
With Congress gearing up for a welfare overhaul, some members may have wanted to preempt legal challenges to the changes they were poised to implement. Gramm, for one, called legal services "a major impediment to meaningful welfare reform." Legal services lawyers were "being advocates for the existing welfare bureaucracy, and while they may have a right to do it, they don't have a right to do it with taxpayers' money," he told the New York Times in 1995.
The restrictions outraged legal aid lawyers, who railed against the compromise. But some within their ranks saw the compromise as the only way to ensure their survival. The LSC could operate with restrictions or not operate at all.
Linda Perle, who directs legal services at the Center for Legal and Policy Studies, counters that LSC-funded lawyers never really pursued a left-wing agenda as the critics claimed. "What was said about legal services was never true. And it's not going to be true if the restrictions are removed," she says. "It will just be easier for legal services lawyers to provide justice to their clients."
Fewer resources for clients and LSC
In the 15 years since the restrictions were passed, a serious crisis in civil representation has developed, and the recent recession has made it worse. Studies show that at best, 15 to 20 percent of low-income people have their legal needs met, says Perle. Some studies even suggest the figure may be as low as 5 percent, "and that was before the recession," she adds. "Now resources are much fewer, and there are many more people who are eligible now, because people lost their jobs, people who were working full time are part time. There's a lot more poor people now than there were two years ago."
The recession also hammered the LSC's alternative revenue source. Besides federal funds, the corporation gets money through a program called Interest on Lawyers Trust Accounts (IOLTA). It's just what it sounds like: The countless small judgments that lawyers win for their clients are pooled into trust accounts from which the clients are ultimately paid; since 1980, states have been allowed to use a portion of the interest on that big pool of money to provide legal help to the indigent. But plummeting interest rates have taken a huge bite out of the total. "Basically, what we've seen is a 75 percent decrease" from 2008 to 2010, the director of the National Association of IOLTA Programs told the National Law Journal in January.
Like any large institution, the LSC has its internal issues. A 2009 inspector general's report (pdf) found flaws in its oversight of contractors, for instance, and a follow-up report from the Government Accountability Office noted that "missing or flawed internal controls" limited the corporation's ability to monitor the performance of its grantees. Another embarrassing development involved a rash of theft by staffers at four legal aid programs. These ranged from the conviction of a Hawaii program employee for stealing about $30,000 to a high-profile case in which the finance chief for Maryland Legal Aid was convicted of embezzling more than $1 million from the agency.
But the program's biggest problems have been related to the congressional restrictions, which reports from lawyers and judges in 21 states have identified as a "barrier to justice," according to the Brennan Center.
The ban on class actions, for example, prevents LSC-funded lawyers from pursuing recession-related problems such as unscrupulous behavior by foreclosure mills. "Many times, particularly when you have consumer fraud and widespread systemic problems, the best way to get at that is with a class action," says Diller. As an example, she cites mortgage rescue scams, wherein shady operators target hard-hit neighborhoods, promising to help homeowners but making off with their money instead. "The way one should respond to that, when a company like that is targeting a whole community, is by bringing a class action on behalf of everyone affected," she says. "But because of the restrictions, most of the law offices that help low-income people can't do that."
And the ban on legislative advocacy means that if an attorney sees "some sort of consumer scam preying upon low-income and elderly people," Diller adds, "you can't go bring it to the attention of your legislature."
New Congressional efforts to cut aid
Now, once again, legal aid is on the chopping block: The Spending Reduction Act introduced by Ohio Congressman Jim Jordan proposes a $420 million cut to the LSC's budget — which happens to be $420 million. The Christian Coalition and the American Farm Bureau are all for it.
The Christian Coalition, "and virtually all of its supporters, would support the current Republican effort to totally eliminate federal tax dollars going to such groups as the LSC," says longtime Coalition lobbyist Jim Backlin, adding that his group also seeks cuts to the National Endowment for the Arts, the Corporation for Public Broadcasting and "countless other federal organizations." The Farm Bureau's policy book promotes a "call for major reform," including "the U.S. government ceasing to provide federal funding for Farm Workers Legal Services."
Realistically, the wholesale elimination of LSC funding isn't likely to make it far in the Senate, but the latest version of the House appropriations bill that funds the LSC calls for an 18-percent budget cut. Which is pretty brutal, given that the corporation had requested a 23 percent increase based on overwhelming need for its services.
The LSC said in a statement that the cut would "decimate civil legal aid," while Stephen N. Zack, president of the American Bar Association, called the proposal "shocking and unacceptable," adding that his group will fight it.
"LSC-funded programs help about a million people a year," says Diller. "So you're always going to find one or two cases that you can construe as controversial. The point is that you have millions of people in need."