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."
A serious crisis in civil representation has developed in the 15 years since that congressional crackdown. 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 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."
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 Farm Bureau are, of course, all for it.
The 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 US government ceasing to provide federal funding for Farm Workers Legal Services."
Realistically, the wholesale elimination of LSC funding isn't likely to make it very 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."