- The Washington Times - Tuesday, October 27, 2009

The government’s legal aid program for the poor has agreed to recover taxpayer money that it spent inappropriately on a decorative Italian-stone wall, but lawmakers in Congress are now pressing for an investigation into new whistleblower concerns about the program.

The Washington Times reported earlier this year that the Legal Services Corp. (LSC) had spent $188,000 on imported Italian stone to decorate a Texas office, an expenditure that auditors later ruled was unjustifiable.

LSC officials told The Times that after reviewing the audit, the agency has decided to recoup the money from its Fort Worth office, which had received the funds from Washington.

“We have regulatory standards that talk about whether expenditures by a grantee are reasonable and necessary and we did not feel that these expenditures met that requirement,” said John Constance, LSC’s director of government relations and public affairs. “Moving forward with this kind of thing, we will use this as a lesson learned and work with them to make sure it doesn’t happen again.”

But LSC officials will face a congressional panel Tuesday with members who still have concerns with the agency’s spending habits and management. The federally funded legal aid program has been dogged for years with questions about how it spends its money, which has included providing its executives with limousine transportation from its Georgetown headquarters to Capitol Hill, $14 Death by Chocolate pastries, and first-class airfare.



Four Republican lawmakers with jurisdiction over the agency wrote a letter Monday to the LSC Inspector General Jeffrey E. Schanz, saying whistleblowers had informed them that LSC senior management has wrongly influenced the agency’s Office of Legal Counsel (OLC).

The letter, signed by Reps. Trent Franks of Arizona, Darrell Issa of California, and Lamar Smith of Texas, and Sen. Charles E. Grassley of Iowa, asked the inspector general to investigate whether high-ranking corporation officials had interfered with any legal opinions issued by the OLC.

The lawmakers asked the inspector general, among other things, to “determine whether or not the Corporations’ General Counsel was ever prevented either directly or indirectly from issuing a written legal opinion, whether prepared in writing or presented verbally, and why” and “confirm that no legal opinion has been interfered with by President Barnett or any other member of the Executive Team due to a disagreement between the Executive Team and the OLA.”

LSC President Helaine Barnett and Vice Chairman Michael McKay are scheduled to testify Tuesday morning before the Judiciary subcommittee on commercial and administrative law, on which Mr. Franks is the ranking Republican and Mr. Issa also a member.

LSC spokesman Stephen Barr denied any inappropriate interference, saying that “as at every other agency in Washington, there are robust discussions about issues presented in legal opinions, but ultimately the general counsel issues opinions that he thinks are required.”

The whistleblowing and the questioning of expenses are sensitive issues because the board that governs LSC considered firing then-Inspector General Kirt West for exposing embarrassing the pastry and limousine expenditures in 2006. Mr. West also said LSC was paying as much as $7 million too much in rent for its Georgetown address. Mr. West was not forced out, though he left the IG post in 2008 to take a private-sector job.

LSC received $390 million in federal funding in 2009; President Obama asked Congress to give LSC $440 million for 2010, an 11 percent increase, and also eliminate several restrictions governing how LSC can use its money.

Under the changes, LSC’s federal dollars could be used to claim, collect and retain attorney fees and participate in class-action lawsuits. LSC also would be allowed to use non-federal dollars for lobbying.

The House Appropriations Committee approved the president’s request, but the Senate Appropriations Committee hasn’t gone as far. It approved a $10 million increase, a sum that Mr. Franks and Mr. Grassley defended as necessary accountability.

“Doesn’t logic dictate that we wait and watch vigilantly at least another year or two to see if funding at current levels is used properly, before we reward LSC with another increase in annual fund — this time from $390 million in 2009 to $440 million in 2010? And doesn’t logic demand that we refrain from lifting restrictions on how LSC can use its funds?” Mr. Franks said.

Mr. Grassley, the ranking Republican on the Senate Finance Committee, also is resisting the increase, saying “Congress needs to hold the corporation and its board of directors accountable on behalf of taxpayers, who provide most of the money to run the corporation … If this organization can’t manage the money it has, without waste, it’s hard to justify a budgetary increase now.”

Mr. Barr said the agency has acted responsibly, citing its decision to give back the stone-wall funding, and said the corporation needs more money to provide legal help to underserved populations.

“We question expenditures, recover the money and make the taxpayer whole, as shown in our prompt effort to resolve the recent issue in Texas. … We agree with Sen. Grassley that there is no room for such spending, and while we take steps to correct problems, we also do not want to inadvertently penalize low-income Americans who come to LSC-funded programs for help,” he said.

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