EXCLUSIVE: Legal-aid agency hit for wasteful spending

EXCLUSIVE:

During the worst economic downturn in decades, the federal program that provides free legal help to impoverished Americans has spent tax dollars on a decorative natural-stone wall, no-bid contracts for consultants, alcohol for a congressional party and more than 100 casino hotel rooms that were never occupied, government documents show.

The Legal Services Corp. - which stirred national controversy a few years back by paying for limousines, first-class airfare and $14 Death by Chocolate pastries for its executives - has created new symbols of excessive spending in recent months, according to federal audit reports and congressional correspondence obtained by The Washington Times.

And the timing couldn’t be worse.

Even as President Obama was calling on government to reduce wasteful spending, his administration was trying to persuade Congress to increase LSC’s funding by $45 million to help more Americans who are being evicted from homes or are facing other economic hardships and are in need of subsidized legal help.

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But lawmakers are wary, especially after receiving a barrage of recent, critical reports from the program’s independent watchdog and the congressional auditing office.

Those reports found that the agency had violated the government’s open-meeting law, had opened the door for its own employees to “double-dip” by collecting pay from the program’s headquarters and separate programs, had failed to follow its own contracting procedures and had unnecessarily handed out consulting contracts without competitive bidding.

The problems are so widespread that auditors in March questioned more than $80,000 in expenses for a California program that provides legal help to Indians, including payment for 136 hotel rooms at the Pechanga Resort & Casino, in Temecula, Calif., that were never used for a conference on tribal court.

“The failures on the part of the LSC and its management cannot and should not be swept under the rug,” Sen. Charles E. Grassley, the top Republican on the Senate Finance Committee, wrote in a letter earlier this month that urged his colleagues on the Senate Appropriations Committee not to give LSC any more money until it fixes its wayward spending.

“LSC headquarters continues to operate in total disregard of federal law when it suits them,” the Iowa Republican wrote. “The fact that serious and vigorous oversight of the LSC grantee community is almost nonexistent is, to say the least, alarming. This misuse of federal funds that has happened over the years is offensive and just the tip of the proverbial iceberg.”

Mr. Grassley isn’t the only person concerned about LSC’s management. Workers inside the LSC program charged with oversight duties have contacted a union, hoping to win collective-bargaining representation. Paul Shearon, treasurer for the International Federation of Professional & Technical Engineers, who authored the workers’ letter and is helping them organize, told the Times that “those workers are not having any input into the way their agency is run.”

The LSC workers in the Office of Compliance and Enforcement and the Office of Program Performance “feel pretty well ignored by management at this point in regards to their concerns,” Mr. Shearon said, adding that the workers whose job it is to notify management about problems fear reprisals. “They have concerns about wanting to keep a low profile because they feel threatened,” he said.

LSC officials say they are trying to get the agency’s problems under control and are implementing several recommended improvements urged by the program’s independent watchdog, the inspector general, and the Government Accountability Office. They hope the latest questions about spending won’t have any impact on the funding increase LSC is seeking.

“More than 95 percent of our funding goes directly to help the nation’s poor, and we would hope that they would not be penalized, especially at a time when so many are at risk of losing jobs, homes and access to health care,” LSC spokesman Stephen Barr wrote in an e-mail.

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