Copyright 1999 Federal Document Clearing House, Inc.
Federal Document Clearing House Congressional Testimony
March 3, 1999, Wednesday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 4784 words
HEADLINE:
TESTIMONY March 03, 1999 DOUGLAS S. EAKELEY HOUSE
APPROPRIATIONS COMMERCE, JUSTICE, STATE AND JUDICIARY F2000 COMMERCE-JUSTICE-
STATE APPROPRIATIONS
BODY:
Statement of the
LEGAL SERVICES CORPORATION Douglas S. Eakeley, Chairman John N.
Erlenborn, Vice-Chairman John McKay, President before the Subcommittee on
Commerce, Justice, State, the Judiciary, and Related Agencies of the House
Appropriations Committee March 3, 1999 Mr. Chairman and Members of the
Subcommittee, thank you very much for the opportunity to testify. The
Legal Services Corporation ("LSC" or "the Corporation")
welcomes this opportunity to present our Budget Request for Fiscal Year 2000 and
to report on our activities over the past year. The need for legal services
continues to be overwhelming. Although we live in a time of great economic
prosperity, there are still over 35 million Americans living below the poverty
level and some 10 million additional individuals with incomes between 100 and
125 percent of the poverty level who are also potentially eligible for legal
services. This means that almost one in every five Americans is potentially
eligible for LSC- funded services. America's children are particularly affected
by poverty; a recent study conducted for the Foundation for Child Development
showed that 20 percent of American children (14.2 million) lived in families
with incomes below the poverty line in 1996. Current resources are insufficient
to meet the needs of so many poor Americans. Last year, local programs turned
away tens of thousands of people with critical legal problems. The American
public has great confidence in our system of justice; however, a recent poll
shows that 90 percent of people believe that the affluent have an unfair
advantage in our court system. 1 Unless everyone has equal access to the courts,
the perception of bias shared by a growing number of Americans will inevitably
erode confidence in our justice system and in our government. The great strength
of legal services programs will always be the work done to solve the critical
day-to-day legal problems of low-income persons, providing a measure of fairness
for the poor and vulnerable in our society. Equally important and of great
consequence to our nation, local programs provide real evidence to millions of
people that our nation has a system of justice that is not only for the rich.
For FY 2000, LSC seeks an appropriation of $340,000,000. We estimate that this
amount will enable local legal services programs funded by LSC to address over
1.6 million legal issues involving critical civil legal problems for eligible
clients and their families. Roughly 30 percent of the increase above the FY 1999
level would be allocated to a small cost-of-living adjustment for the local
programs that provide legal services to the poor in every state and county in
the United States. Seventy percent of the increase ($30,000,000) would fund new,
carefully focused initiatives to increase services to children and victims of
domestic violence, and to expand the use of technology and promote client
self-help. LSC's FY 2000 budget request has been structured to allow the
Corporation to focus on 1) maintaining current levels of high- quality legal
services assistance; 2) using technology to significantly expand legal services
and legal information to low- income persons; and 3) ensuring compliance by
grantees with all congressional restrictions and LSC regulations. 1 Perceptions
of the U.S. Justice System, a study conducted by M/A/R/C Research (1998).
Program Services to Clients: $297,650,000 The foundation of our Budget Request
is funding to preserve and maintain the services provided by the local programs
that provide civil legal assistance to low-income persons throughout the United
States. In FY 2000, we seek to increase grants to local legal services programs
by $8,650,000, or approximately 3 percent above the FY 1999 level of
$289,000,000, as a cost-of-living adjustment. This increase will help ensure
that local programs are able to maintain their current levels of services, which
might otherwise be reduced by increases in such expenses as rent, benefits, and
scheduled salary adjustments. The Corporation anticipates that improvements in
efficiency and expansion of private bar involvement and non-LSC funding will
enable programs to achieve a moderate increase in services with funding at the
level proposed. We would note, however, that the most significant source of
non-LSC funding, state IOLTA (Interest On Lawyer Trust Accounts) programs,
continues to be threatened. The Supreme Court on June 15, 1998, ruled in Hon.
Thomas Phillips v. Washington Legal Foundation that IOLTA funds are the private
property of clients. The Court sent the case back to a lower Texas court to
determine if the state has "taken" private property and must compensate the
owners for it. In 1997, LSC grantees received over $57,000,000 from IOLTA
programs. Loss of this funding source would constitute a major blow to many
programs. Domestic Violence/Unmet Legal Needs of Children Initiatives:
$17,250,000 The largest increase above FY 1999 funding levels will be targeted
to two categories of services that have been identified by the Corporation,
local programs, the Congress, and the organized bar as special priorities:
domestic violence and the unmet legal needs of children. To receive the funding,
each LSC grantee will be required to submit a plan demonstrating how it will use
its allocation to expand services to victims of domestic violence and/or to
address the unmet legal needs of children, based upon local priorities and
criteria that LSC will develop. The Corporation estimates that these initiatives
will result in legal services to 75,000 additional children and battered women,
benefiting some 200,000 people living in poverty when the effect on other family
members is taken into consideration. LSC-funded programs are the nation's
primary source of legal assistance for low-income women who are victims of
domestic violence. More than one out of every six LSC legal issues addressed
involves efforts to obtain protection from domestic violence. In addition to
prompt action to resolve emergency situations, victims of domestic violence
usually require further legal assistance to resolve their marital status and
establish themselves and their children in a safe and stable situation. Overall,
two-thirds of legal services clients are women, most of them mothers with
children. The legal problems faced by people living in poverty can have
particularly serious, long-term consequences for children. Access to legal
services can enable a child to secure support from an absent parent, remain with
a family that wishes to adopt, obtain a decent home in which to live, receive
adequate nutrition and health care, escape from a dangerous living situation,
regain wrongfully terminated or denied disability benefits or supportive
services, or acquire better education or vocational training. Each of these
factors can have a profound impact on a child's future. Despite the seriousness
of the issues involved, and the unique vulnerability of children and victims of
domestic violence, LSC- funded programs are unable to provide all the services
to children and to victims of domestic violence that are needed in their
communities. A current survey of representative local programs confirmed the
existence of a critical need to expand services in these two categories. This
survey is reinforced by studies that have estimated between one and four million
American women experience an assault by an intimate partner each year, and 3.3
million children are exposed to violence by family members against their mothers
or female caretakers. 2 Consequently, the Corporation has accorded special
priority in FY 2000 to these initiatives. The request for these initiatives
represents a decrease from LSC's FY 1999 figures for them. This is due, in part,
to the fact that some LSC grantees have received domestic violence funding
through the U.S. Department of Justice under the Violence Against Women Act
("VAWX") and the Victims of Crime Act. The Corporation found that 62 LSC-funded
programs received VAWA grants in FY 1997. Grants ranged from $10,000 to over
$100,000 for a total of about $4.4 million. For FY 1998, 80 LSC-funded programs
reported $5.2 million in VAWA funding. LSC's request to fund special initiatives
on domestic violence will continue to supplement funds for civil legal
assistance available through the Department of Justice. Examples from a few
representative states of the initiatives that local programs might undertake
with these funds include the following: - One program in a rural area would
significantly increase its assistance to domestic violence victims and serve an
additional 400 clients by expanding its outreach and community education efforts
and producing a video on domestic violence laws and civil processes that would
be made available at public libraries throughout the state. It would also
increase training and education of clients, police, and others to ensure
effective services to battered women in rural areas. 2 According to an August
1995 Bureau of Justice Statistics Special Report, Violence Against Women:
Estimates from the Redesigned Survey (NCJ- 154348) and a report by the American
Psychological Association, Violence and the Family: Report of the American
Psychological Association Presidential Task Force on Violence and the
Family(1996). - One program would add three or four lawyers to expand its work
by 500 to 600 cases on behalf of battered women. Another would significantly
expand to 14 rural counties its innovative domestic violence program to
establish victim support groups and work with clients to ensure that community
resources are properly being used to meet their needs. A third rural program
would increase its representation of families of children with special needs to
ensure that the schools are meeting their needs. To promote family stability, it
would expand its eviction prevention program for families with children, and
work with public defender offices on a delinquency prevention project, taking
referrals from the public defender and providing legal representation on the
family's related civil legal needs. - A grantee would expand its direct
representation of victims of domestic violence by adding two new staff and
reaching another 200 battered clients. It would also increase assistance to
children in foster care and expand its child support enforcement and custody
work, especially in instances where mothers are going off welfare into
low-paying jobs. Another grantee in this same state would expand domestic
violence work into other counties in its service area, which it is not now able
to serve because of limited resources, by expanding legal services, outreach,
and client education and stimulating other services by fostering the development
of cooperative service agreements and protocols among the agencies that deal
with domestic violence victims, including police, prosecutors, hospitals, social
services, shelters, court clerks' offices, and legal services programs. It would
expand services for children in two service areas where, because of limited
resources, it is not now able to accept cases involving children, such as child
custody. - In one state, approximately 150 battered women could be served who
might otherwise go unrepresented. A grantee in this state will be able to expand
a project to prevent long-term placement of foster care children by providing
legal services to address critical legal needs of the natural family in areas
such as housing, benefits, and family law. Client Self-Help/Information
Technology Initiatives: $12,750,000 In FY 2000, LSC will allocate $12,750,000 to
new initiatives targeted toward expanding methods by which clients can resolve
legal problems themselves, without the intervention of an attorney, and
improving efficiency and effectiveness in the delivery of legal services through
better use of technology. These initiatives have been combined because many
methods of promoting client self-help can be implemented more efficiently
through expanded use of information technology. Recent surveys have found that
many local legal services programs lack the technological capacity to make full
use of existing new technology-based methods of improving efficiency and
expanding services to clients. Many programs have identified a need to expand
community legal education and support for client self-help but lack the
resources to do so. LSC's Office of Inspector General, in an August 1996 report,
Increasing Legal Services Delivery Capacity through Information Technology,
concluded that delivery capacity could be significantly increased through
enhanced use of available technology. Among the uses of technology considered in
the report are support for client self- help and preventing legal problems
through centralized telephone and computer-based intake systems, public-access
kiosks providing legal information and forms, and provision of legal information
through the Internet. The funds for these initiatives will be as follows: -
$3,000,000 for special one-time per capita grants for expanding programs'
technological capacity (including purchase of computer hardware, software,
telephone systems, networks, and telephone equipment). The grants would require
programs to make a commitment to budget in future years an amount sufficient to
maintain the equipment and stay abreast of developments in technology. -
$9,750,000 for special grants to selected recipients for demonstration projects
to enable local programs to staff and run pro se clinics and other methods of
assistance to individuals representing themselves; provide preventive legal
education; create centralized intake systems providing advice, brief services,
and referral; and perform other efforts to prevent legal problems or prevent
their escalation. The return on investment for this initiative will be
substantial. It is estimated that by making better use of technology, LSC
programs will serve an additional 100,000 persons in FY 2000 with additional
increases in future years. Special emphasis will be placed on developing
technologically advanced legal services offices that serve the rural poor. The
lack of state funding for legal services and the vast size of service areas in
certain western states severely limit access to legal help in these areas. For
example, in the state of Montana (a state that is nearly the size of Maryland,
Virginia, West Virginia, and North and South Carolina combined), in 11 legal
services offices across the state there is a total of only 19 attorneys, serving
a poverty population of 124,853. In 1998, the legal services program handled
approximately 6,500 legal problems. Montana Legal Services received just
$132,019 in non-LSC funding in 1998, which comes out to just $1.05 per poor
person living in this state. Legal services programs in Idaho, Wyoming, and the
Dakotas face similar obstacles. The Corporation strongly believes that
allocating a modest federal investment ($9.75 million) toward the development of
technologically advanced "model" legal services programs will significantly
expand legal services information and assistance to low-income Americans in
rural areas. LSC Management and Administration: $9,250,000 The Corporation
requests $9,250,000 for Management and Administration in FY 2000 (an increase of
3 percent from FY 1999), which is slightly more than 2.3 percent of the total
amount requested. The Rinds will be used to support the functions of the
Corporation's central administration. 3 No new positions will be created. In the
budget submission for FY 1999, funding was included for 11 additional staff
positions. With these 11 new positions filled, the Corporation's Management and
Administration will consist of only 80 employees, significantly fewer than the
level of 125 when the current LSC Board took office. With this pared-down,
highly efficient staff, LSC carries out its responsibilities for managing and
overseeing the federally funded legal services delivery system. The Corporation
uses its system of competition for grants to promote the efficient and effective
delivery of legal services. LSC encourages competition for grants through broad
circulation of information about availability of grant funds, outreach, and
provision of technical support to applicants. In the competition process, LSC
evaluates applications according to established quality standards and awards
grants to the applicants best able to provide high-quality legal services in
accordance with applicable legal requirements. LSC also uses the competition
process to promote increased volunteer private attorney involvement and
expansion of public- private partnerships through which other resources can be
secured to build upon federal funding. During the grant period, LSC follows up
with individual local programs on areas identified in the competition process as
requiring improvement in program quality and identifies broader issues affecting
the legal services delivery system. In FY 2000, LSC will continue to review
program configuration in all states and promote program collaboration and/or
consolidation where it appears that federal funds could be used more efficiently
by programs or joint efforts serving broader areas or entire states. In
addition, LSC will seek to identify, test, and evaluate new strategies to
enhance the effectiveness and quality of legal services, and to promote use of
promising strategies. 3 LSC will continue to voluntarily comply with the
Government Performance and Results Act of 1993 (GRPA). During the next several
months, a revised FY 2000 performance plan and strategic plan will be developed
and submitted to the Subcommittee. LSC's management further ensures
accountability to Congress and the taxpayers through aggressive oversight and
enforcement of federal law and other requirements. The Corporation's compliance
and enforcement activities include drafting and promulgating regulations;
implementing new legal requirements; investigating complaints and inquiries from
clients, the public, and Members of Congress and taking appropriate action;
following up on referrals from the Office of Inspector General regarding
possible violations discovered through compliance audits of local programs;
developing and enforcing corrective action plans; and imposing and enforcing
sanctions where necessary. Office of Inspector General: $2,100,000 The
Corporation requests $2,100,000 to fund the activities of the Office of
Inspector General ("OIG"), as set forth in the OIG's Annual Performance Plan for
FY 2000, which is also included with our Budget Request. The OIG's mission is to
prevent and detect fraud, waste, and abuse, and to promote efficiency and
effectiveness in activities administered or funded by LSC. In addition, the OIG
oversees routine on-site monitoring of grantee compliance with laws and
regulations through annual audits by independent public accountants, referral of
significant findings to LSC management, and tracking progress of corrective
actions. The OIG also conducts on-site audits of grantee compliance and
associated requirements. FY 1998 Activities In 1996, Congress enacted
fundamental changes to the national legal services program, reaffirming the
federal government's commitment to providing representation for individuals
facing legal problems who would otherwise be unable to afford assistance. With
the intention of refocusing the LSC delivery system on serving individual
clients with particular legal needs, a series of new limitations were placed
upon activities in which LSC-funded programs can engage on behalf of their
clients, even with non-LSC funds. Among them are prohibitions on class actions,
challenges to welfare reform, collection of court-awarded attorneys' fees, many
types of lobbying, litigation on behalf of prisoners, and representation of
undocumented and other categories of aliens. In addition, Congress adopted a
number of new accountability requirements, such as mandatory timekeeping,
competitive bidding, and tightened compliance monitoring. The Corporation
continues to be diligent in maximizing the use of federal dollars and in
ensuring that the restrictions are enforced. We are proud of the success we have
had in developing a system of effective oversight of the activities of all LSC
grant recipients. State Planning. Beginning in February 1998, the Corporation
has required all grant recipients to participate in a process to provide a
comprehensive, integrated statewide delivery system. The goals of this process
are to ensure the following: that programs' efforts are coordinated and pressing
client needs are being met; that there are enough opportunities for training and
information sharing between programs; that programs are keeping up with and
using new technology; and that programs are working together to increase
resources and develop new initiatives to expand the scope and reach of their
services. Each LSC-funded program must therefore assess the strengths and
weaknesses of the current approach, establish goals to strengthen and expand
services to eligible clients, and determine the major steps and a timetable
necessary to achieve those goals. Our overall objective in this process is to
promote the best use of federal dollars in every state system. Competition. Late
last year, the Corporation completed its third full competition for grants
according to the process set forth in our regulation on competition, 45 C.F.R.
1634. Of a total of 335 service areas, 136 were subject to competition this
year, pursuant to our multi-year funding system. The remaining programs, whose
grants were not up for competition this year, were subject to a grant renewal
process to ensure their continued compliance with grant conditions. As in the
previous competition, we sought to encourage competition for grants through
published notices in state and local bar journals, one major newspaper in every
service area, and one national newspaper; outreach to service providers, bar
associations, law firms and other potential applicants; and selected site
visits. To ensure objectivity, outside readers, as well as LSC staff, evaluated
all applications. Competition has provided LSC with useful tools for improving
program quality where necessary to ensure the most effective and efficient
delivery of high-quality legal services. During the proposal review process, we
are able to review the individual delivery mechanisms used by applicants and
evaluate these mechanisms against established quality standards. This enables
LSC to make qualitative judgments about each applicant's capacity to deliver
quality legal services. Where it is determined that other program improvements
could enhance the delivery of legal services, they are identified and the
recipients are advised of the need to address them. Where it is determined that
an applicant does not meet the necessary quality standards and/or another
applicant is better able to deliver legal services, LSC is able to select the
better-qualified applicant. Programs in which concerns have been identified may
receive funding for two years, a single year, or less, rather than the
three-year cycle for which they are eligible. The competition for the grant
cycle beginning in 1998 resulted in multiple applicants in four service areas
and funding for less than the full cycle because of quality issues for 14
programs. In addition, programs in 11 states were awarded grants for less than
the full cycle pending consideration of possible consolidation in the state
planning process discussed above. Regulations. In FY 1998, the Corporation
finalized four rules. They are 1) a new rule to implement the Burton Amendment
in LSC's FY 1998 Appropriations Act, which requires recipients to disclose to
the public and to LSC certain information on cases filed by their attorneys; 2)
a revision of LSC's cost standards and procedures; 3) a rule to implement the
provisions of the Assisted Suicide Funding Restriction Act of 1997 that are
applicable to LSC funds; and 4) a rule to revise the 1996 amendments to the
Freedom of Information Act regarding electronic records, time limits, and
standards for processing requests for records. After the close of FY 1998, LSC
finalized changes to the laws governing the Corporation's means to deal with
post-award grant disputes. These changes included 1) streamlining the
termination process and recipients' hearing rights; 2) authorizing the debarment
of recipients for good cause; and 3) authorizing the Corporation to recomplete a
service area when a current recipient's grant has been completely terminated. In
addition, hearing procedures were streamlined and suspension rules clarified to
allow a suspension in an emergency situation. The rule on denial of refunding
was rescinded since LSC determined that it was no longer consistent with the law
governing grants. Two proposed rules have been published regarding recipient
fund balances and timekeeping. Final versions of these rules are due in the near
future. Resolution of Challenges to New Requirements. The Corporation has
vigorously and successfully defended its regulations and the underlying
statutory provisions in two lawsuits challenging their constitutionality, Legal
Aid Society of Hawaii vs. LSC (U.S. District Court, District of Hawaii) and
Carmen Velazquez et al. vs. Legal Services Corporation (U.S.
District Court, Eastern District of New York). A three-judge panel of the U.S.
Circuit Court of Appeals for the Ninth Circuit ruled on May 19, 1998, in favor
of LSC on the appeal in LASH. It unanimously reaffirmed the ruling of the U.S.
District Court in Hawaii that the application of LSC restrictions to a
recipient's non-LSC funds does not violate the plaintiffs' First Amendment
rights of free speech and association. Retired Justice Byron White wrote the
opinion for the panel, which concluded that LSC's regulations complied with
precedents set in the 1991 Rust v. Sullivan case regarding restrictions on
federally funded programs. On January 7, 1999, the Second Circuit upheld as
constitutional virtually all of the statutory restrictions on the use of funds
by LSC's grantees that were challenged in Velazquez v. Legal Services
Corporation. In Velazquez, the panel was divided with respect to
welfare reform. The majority found that the proviso to the exception for
"suits-for-benefits" that bars challenges to existing welfare reform laws
discriminates on the basis of viewpoint -- that is, it permits representation
only if it favors the status quo over change. The Corporation has filed for
rehearing by the Second Circuit concerning the striking of limitations on
welfare challenges. The plaintiffs have also filed for rehearing. Compliance
Monitoring. The Corporation's FY 1996 appropriation mandated a new system for
oversight of program compliance. The principal mechanism for checking grantee
compliance with all requirements and restrictions is now the grantee's annual
audit, which includes a mandatory audit of compliance with LSC regulations.
These audits are conducted by Independent Public Accountants ("IPAs"), with
guidance and review by LSC's OIG. LSC Management retains responsibility for
interpreting applicable law and regulations, investigating complaints, and
enforcing compliance. Management worked cooperatively with the OIG to implement
the new system, which is now fully in place. We are pleased with the results to
date, which we believe demonstrate general, substantial compliance by grantees
with the new requirements and restrictions. As reflected in the OIG's Recipient
Audit Reports for 1997, the IPAs did not report any cases where grantees failed
to comply with any of the congressionally imposed requirements and restrictions.
The IPAs have completed 52 audits for FY 1998, and have again found no
violations. The bulk of the audits for the remaining 200+ programs will be
submitted by April 30, 1999. We have provided the Subcommittee with detailed
reports on the results of the FY 1997 audits, and will promptly notify it when
the full report of FY 1998 audits is available. Conclusion Mr. Chairman and
Members of the Subcommittee, we thank you for this opportunity to share with you
our Budget Request FY 2000. We believe that the Corporation merits your
continued support for its mission, as defined by the Legal Services
Corporation Act: to promote equal access to our system of justice and
improve opportunities for low-income people throughout the United States by
providing high-quality civil legal assistance to those who would be otherwise
unable to afford it.
LOAD-DATE: March 5, 1999
