    [House Hearing, 109 Congress]
    [From the U.S. Government Publishing Office]

                          LEGAL SERVICES CORPORATION
                                IMPROVEMENT ACT

    =======================================================================

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                       COMMERCIAL AND ADMINISTRATIVE LAW

                                     OF THE

                           COMMITTEE ON THE JUDICIARY
                            HOUSE OF REPRESENTATIVES

                           ONE HUNDRED NINTH CONGRESS

                                 SECOND SESSION

                                       ON

                                   H.R. 6101

                                   __________

                               SEPTEMBER 26, 2006

                                   __________

                               Serial No. 109-158

                                   __________

             Printed for the use of the Committee on the Judiciary

          Available via the World Wide Web: http://judiciary.house.gov

                                     ______

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                           COMMITTEE ON THE JUDICIARY

                F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
    HENRY J. HYDE, Illinois              JOHN CONYERS, Jr., Michigan
    HOWARD COBLE, North Carolina         HOWARD L. BERMAN, California
    LAMAR SMITH, Texas                   RICK BOUCHER, Virginia
    ELTON GALLEGLY, California           JERROLD NADLER, New York
    BOB GOODLATTE, Virginia              ROBERT C. SCOTT, Virginia
    STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
    DANIEL E. LUNGREN, California        ZOE LOFGREN, California
    WILLIAM L. JENKINS, Tennessee        SHEILA JACKSON LEE, Texas
    CHRIS CANNON, Utah                   MAXINE WATERS, California
    SPENCER BACHUS, Alabama              MARTIN T. MEEHAN, Massachusetts
    BOB INGLIS, South Carolina           WILLIAM D. DELAHUNT, Massachusetts
    JOHN N. HOSTETTLER, Indiana          ROBERT WEXLER, Florida
    MARK GREEN, Wisconsin                ANTHONY D. WEINER, New York
    RIC KELLER, Florida                  ADAM B. SCHIFF, California
    DARRELL ISSA, California             LINDA T. SANCHEZ, California
    JEFF FLAKE, Arizona                  CHRIS VAN HOLLEN, Maryland
    MIKE PENCE, Indiana                  DEBBIE WASSERMAN SCHULTZ, Florida
    J. RANDY FORBES, Virginia
    STEVE KING, Iowa
    TOM FEENEY, Florida
    TRENT FRANKS, Arizona
    LOUIE GOHMERT, Texas

                 Philip G. Kiko, Chief of Staff-General Counsel
                   Perry H. Apelbaum, Minority Chief Counsel
                                     ------

               Subcommittee on Commercial and Administrative Law

                          CHRIS CANNON, Utah Chairman

    HOWARD COBLE, North Carolina         MELVIN L. WATT, North Carolina
    TRENT FRANKS, Arizona                WILLIAM D. DELAHUNT, Massachusetts
    STEVE CHABOT, Ohio                   CHRIS VAN HOLLEN, Maryland
    MARK GREEN, Wisconsin                JERROLD NADLER, New York
    J. RANDY FORBES, Virginia            DEBBIE WASSERMAN SCHULTZ, Florida
    LOUIE GOHMERT, Texas

                      Raymond V. Smietanka, Chief Counsel

                            Susan A. Jensen, Counsel

                            Brenda Hankins, Counsel

                       Mike Lenn, Full Committee Counsel

                       Stephanie Moore, Minority Counsel

                                C O N T E N T S

                                  ----------

                               SEPTEMBER 26, 2006

                               OPENING STATEMENT

                                                                       Page
    The Honorable Chris Cannon, a Representative in Congress from the
      State of Utah, and Chairman, Subcommittee on Commercial and
      Administrative Law.............................................     1
    The Honorable Melvin L. Watt, a Representative in Congress from
      the State of North Carolina, and Ranking Member, Subcommittee
      on Commercial and Administrative Law...........................     3

                                   WITNESSES

    Mr. Richard ``Kirt'' West, Inspector General, Legal Services
      Corporation
      Oral Testimony.................................................     7
      Prepared Statement.............................................     9
    Mr. David C. Williams, Inspector General, The United States Post
      Office
      Oral Testimony.................................................    12
      Prepared Statement.............................................    13
    Mr. Frank Strickland, Chairman of the Board, Legal Services
      Corporation
      Oral Testimony.................................................    14
      Prepared Statement.............................................    16

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    Prepared Statement of the Honorable Chris Cannon, a
      Representative in Congress from the State of Utah, and
      Chairman, Subcommittee on Commercial and Administrative Law....     2

                                    APPENDIX
                   Material Submitted for the Hearing Record

    Letter from Edouard R. Quatrevaux to the Honorable Chris Cannon,
      a Representative in Congress from the State of Utah, and
      Chairman, Subcommittee on Commercial and Administrative Law....    42
    Memorandum to Board of Directors of the Legal Services
      Corporation from Covington & Burling L.L.P.....................    43
    January Transcripts of the Minutes of the Board and the
      Performance Review Committee of the Legal Services Corporation.    72

                   LEGAL SERVICES CORPORATION IMPROVEMENT ACT

                                  ----------

                          TUESDAY, SEPTEMBER 26, 2006

                      House of Representatives,
                             Subcommittee on Commercial
                                and Administrative Law,
                                    Committee on the Judiciary,
                                                        Washington, DC.
        The Subcommittee met, pursuant to notice, at 2 p.m., in
    Room 2141, Rayburn House Office Building, the Honorable Chris
    Cannon (Chairman of the Subcommittee) presiding.
        Mr. Cannon. The Subcommittee on Commercial and
    Administrative Law will please come to order.
        The Subcommittee on Commercial and Administrative Law is
    meeting this afternoon to consider H.R. 6101, the ``Legal
    Services Corporation Improvement Act,'' a bill I introduced in
    response to a disturbing pattern of events that have come to
    the Subcommittee's attention. I will keep my opening remarks
    brief as I believe the testimony and the opportunity to ask
    questions of our witnesses will prove to be valuable.
        Congress created the Inspector General system in 1978. The
    purpose of this system is to ensure that the Federal agencies
    follow proper Government procedures and policies. There are two
    types of IGs, those appointed by the President and those
    appointed by individual agencies. The presidential appointees
    can only be dismissed by the President. In contrast, agency
    appointees, such as the LSC IG, can be fired directly by the
    agency. As a result, agency-appointed IGs stand a greater risk
    of retaliation from agency heads. The only restraint on agency
    heads firing their IGs is they are required to provide notice
    to Congress of the removal along with reasons for their
    decision.
        H.R. 6101 would simply amend the Legal Service Corporation
    Act to provide that the IG may at any time be removed, but only
    upon the written concurrence of at least nine members of the
    11-member Board. The current law only requires a simple
    majority of the Board to remove the IG; namely, six members.
        The purpose of today's hearing is to examine whether LSC's
    Inspector General needs increased protection from retaliation
    by the Board of Directors as provided in H.R. 6101.
        The Legal Services Corporation's Board of Directors hired
    Kirt West as the LSC IG in 2004. One of his first reports was
    issued in response to an inquiry from this Subcommittee
    regarding the lease arrangement for LSC's headquarters. Rather
    than accept the IG's report on the lease and cooperate in
    implementing his conclusions, the LSC Board of Directors
    instead rejected the report and contemplated removing the IG.
        Whereas the most important characteristic of an inspector
    general is independence, there would appear to be an obvious
    and inherent conflict between any IG and the agency for which
    he or she serves. The IG is charged with oversight of the
    functioning of the agency and must as a matter of course
    conduct investigations of those who control the agency, the
    same people to whom he or she reports and with whom a working
    relationship must be maintained.
        It is quite clear, based on comments made by LSC board
    members, that they either don't understand the concept of an IG
    or have no respect for the IG.
        I drafted H.R. 6101, the ``Legal Services Corporation
    Improvement Act,'' to provide some greater degree of
    independence for LSC's IG. I must stress that the measure was
    not drafted in response to problems limited to the current
    Board and IG, but in response to a pattern of problems that
    predate both the present IG and LSC administration. I cite a
    letter of support for this administration from former LSC's
    former Inspector General, Ed Quatrevaux, which underscores the
    need for H.R. 6101. I ask unanimous consent that a copy of this
    letter be included in the hearing record and hearing no
    objection, so ordered.
        [The information referred to is available in the Appendix.]
        Mr. Cannon. Mr. Quatrevaux states, ``I fought numerous
    challenges to IG independence with the LSC Board of Directors
    and headquarters' management. My understanding that the current
    IG is facing many of the same problems with a different Board
    and management leads me to believe that LSC's propensity to
    challenge the authorities and dependence of the IG is an
    institutional problem.''
        Other agencies have experienced similar issues with their
    IGs. To remedy the conflict in two agencies, Congress created a
    bar for dismissal of the Inspector General for the United
    States Postal Service and a bar for the United States Capitol
    Police which is higher than that proposed in H.R. 6101.
        I expect David Williams, our witness from the Postal
    Service, will explain why such protections for Inspector
    General are necessary.
        Indeed, I look forward to receiving the testimony from each
    of our witnesses, and I anticipate this hearing will be very
    informative and constructive endeavor.
        I now turn to my colleague, Mr. Watt, and the distinguished
    Member of my Subcommittee, and ask him if he has any opening
    remarks.
        [The prepared statement of Mr. Cannon follows:]

     Prepared Statement of the Honorable Chris Cannon, a Representative in
        Congress from the State of Utah, and Chairman, Subcommittee on
                       Commercial and Administrative Law

        The Subcommittee will please come to order.
        The Subcommittee on Commercial and Administrative Law is meeting
    this afternoon to consider H.R. 6101, the ``Legal Services Corporation
    Improvement Act,'' a bill I introduced in response to a disturbing
    pattern of events that have come to our attention. I will keep my
    opening remarks brief, as I believe that the testimony and the
    opportunity to ask questions of our witnesses will prove to be more
    valuable. Also, I want to leave as much time as possible for Members of
    the Subcommittee to utilize this opportunity.
        Congress created the inspector general system in 1978. The purpose
    of this system is to insure that federal agencies follow proper
    government procedures and policies. There are two types of IGs: those
    appointed by the President, and those appointed by individual agencies.
    The Presidential appointees can only be dismissed by the President. In
    contrast, agency appointees, such as the LSC IG, can be fired directly
    by the agency. As a result, agency-appointed IGs stand a greater risk
    of retaliation from agency heads. The only restraint on agency heads
    firing their IGs is that they are required to provide notice to
    Congress of the removal along with reasons for their decision.
        H.R. 6101 would simply amend the Legal Services Corporation Act to
    provide that the Inspector General may at any time be removed, but only
    upon the written concurrence of at least nine members of the 11-member
    Board. The current law only requires a simple majority of the Board to
    remove the IG, namely, six members.
        Today's hearing will examine whether LSC's Inspector General needs
    increased protection from retaliation by the Board of Directors, as
    provided by H.R. 6101.
        The Legal Services Corporation's Board of Directors hired Kirt West
    as the LSC IG in 2004. One of his first reports was issued in response
    to an inquiry from this Subcommittee regarding the lease arrangement
    for LSC's headquarters. Rather than accept the IG's report on the lease
    and cooperate in implementing his conclusions, the LSC Board of
    Directors instead rejected the report and contemplated removing the IG.
        Whereas the most important characteristic of an Inspector General
    is independence, there would appear to be an obvious and inherent
    conflict between any IG and the agency for which he or she serves. The
    IG is charged with oversight of the functioning of the agency and must,
    as a matter of course, conduct investigations of those who control the
    agency--the same people to whom he or she reports and with whom a
    working relationship must be maintained.
        It is quite clear, based on comments made by LSC Board members,
    that they either don't understand the concept of an IG or have no
    respect for an IG.
        I drafted H.R. 6101, the ``Legal Services Corporation Improvement
    Act,'' to provide some greater degree of independence for LSC's IG. I
    must stress that this measure was not drafted in response to problems
    limited to the current Board and IG, but in response to a pattern of
    problems that predate both the present IG and LSC administration. I
    cite a letter of support for this legislation from LSC's former
    Inspector General, Ed Quatrevaux, which underscores the need for H.R.
    6101. On unanimous consent, I ask that a copy of this letter be
    included in the hearing record. Hearing no objection, it is so ordered.
    He states, ``I fought numerous challenges to IG independence with the
    LSC Board of Directors and headquarters' management. My understanding
    that the current IG is facing many of the same problems with a
    different Board and management leads me to believe that LSC's
    propensity to challenge the authorities and independence of the IG is
    an institutional problem.''
        Other agencies have experienced similar issues with their IGs. To
    remedy the conflict in two agencies, Congress created a bar for
    dismissal of the inspector general for the United States Postal Service
    and a bar for the United States Capitol Police, which is higher than
    that proposed in H.R. 6101 for the IG at LSC. I expect David Williams,
    our witness from the Postal Service, will explain why such protections
    for inspectors general are necessary.

        Mr. Watt. Thank you, Mr. Chairman, and thank you for
    convening the hearing, I guess. For over 3 decades the Legal
    Services Corporation has provided legal services to the poor.
    Today there are currently more than 45 million Americans who
    qualify for assistance from one of the Legal Services' 143
    grantees nationwide. Legal Services clients are as diverse as
    our Nation, consisting of individuals of all races, ethnic
    groups and ages. They include the poor, working poor, veterans,
    family, farmers, people with disabilities and victims of
    natural disasters. More than two-thirds of the Legal Services
    Corporation's clients are women, most of them mothers.
        Because the Legal Services Corporation receives Federal
    funds, it is certainly appropriate that Congress provide
    oversight. The hearing on H.R. 6101 is the product of perceived
    threats to the independence of the Inspector General. I would
    suggest to you that a bill introduced on September 19th, I
    guess having a hearing this soon shows the power that a
    Chairman in our institution has and perhaps indicates some
    institutional problems, too.
        But that aside, Congressional oversight is certainly a
    valuable tool and one which enables us to ensure that Federal
    agencies and entities within our jurisdictions are operating
    effectively and within the mandates of the law. But
    Congressional oversight is a very powerful tool and must not be
    misused or abused.
        In the past 2 months, newspapers and television accounts
    have vilified the leadership of the Legal Services Corporation
    based upon leaks apparently from Hill staff or from the IG's
    office itself. These leaks from a then ongoing investigation
    were inappropriate and unprofessional and, as it turns out,
    mostly inaccurate.
        The IG's report provided to us yesterday has found some
    criminal violations, no deliberate malfeasance and in most
    instances no disregard for LSC policy. At most, the Inspector
    General has found that perhaps there should be a policy where
    there is none and LSC, according to his cover letter, has
    agreed to comply.
        However difficult this investigation was for all involved,
    I simply do not believe that Congress is in the position to
    referee every discovery dispute or police every personality
    conflict that understandably arises in the course of IG's
    investigations.
        There are processes in place to resolve those disputes and
    congressional intervention in the midst of pending
    investigation has proven not to be all that constructive. The
    LSC board is a volunteer, presidentially appointed Board. And
    this Congress seems to be giving it more trouble since this
    President has been appointing it than when other Presidents
    were appointing.
        If we are to continue to attract qualified, dedicated
    professionals to fill these positions, they must be assured
    that they will not be subject to abuse and harassment. These
    are troubling allegations, however. They are troubling
    allegations that former disgruntled employees of the LSC who
    now happen to be Congressional staff have been very heavy
    handed, biased and the source of many of the substantiated
    complaints by the IG. Indeed, the IG's letter transmitting his
    report on certain fiscal practices of the Legal Services
    Corporation concedes that Congressional staff were the source
    of certain allegations he chose to investigate. While I do not
    know whether former employees of LSC who are now Congressional
    staff have misused their positions to harass or retaliate
    against LSC, I do believe that we must be especially vigilant
    in ensuring that all inquiries from this Subcommittee and from
    the Senate Subcommittees are made in good faith.
        The bill before us today in my estimation unreasonably
    raises the bar for removal of an Inspector General by the LSC
    board excessively high, higher in fact than that required to
    remove a Board member. While any IG must be permitted to do his
    or her job without interference, the normal give and take of
    internal orders and investigations does not rise to the level
    of obstruction presumed by this bill.
        Moreover, the suggestion that a Board with the statutory
    power to hire and fire cannot exercise the power to dismiss an
    IG simply because he is investigating or has the authority to
    investigate the Board would probably invite endless
    illegitimate investigations by an IG desperate to maintain a
    job. If we are to create such an incentive, at least we are to
    provide for attorney fees if somebody finds that these things
    get personal and bear no fruit.
        Similar provisions were included in the Independent Counsel
    Act to provide balance to the otherwise extraordinary,
    unfettered, independent, conferred response upon the special
    counsels under that.
        I look forward to hearing from the witnesses. And I would
    have to say, Mr. Chairman, that this is yet another one of
    those instances where it seems to me that we are proposing to
    legislate to get a result rather than legislating to have a
    policy and practice that makes sense in the whole context of
    what we are doing.
        We can't pick and choose results here. Sometimes we like
    the result, sometimes we don't like the result. But there ought
    to be processes in place that are consistent and not just based
    on personal animosities. With that, I will yield back the
    balance of my time.
        Mr. Cannon. Without objection, the gentleman's entire
    statement will be placed in the record. Hearing no objection,
    it will be so ordered.
        [The information referred to was not available at the time
    of the printing of this hearing.]
        Mr. Cannon. Now will the gentleman be agreeable to
    inserting his legal fees in the bill and getting his co-
    sponsorship?
        Mr. Watt. No, because I haven't looked at the bill. I mean,
    you introduced the bill September 19. Today is September 25. If
    you had any----
        The Chairman. It is a very short bill.
        Mr. Watt. If you had any interest in getting my support for
    this bill, I am sure I would have known about it before it got
    introduced.
        Mr. Cannon. I am certain, sufficiently certain that staff
    has been talking about it on both sides. But if you would like
    to negotiate about attorney fees, I would love to include that
    into the system.
        Without objection, all Members may place their statements
    in the record. Without objection, the Chair will be authorized
    to declare a recess at any point. Hearing no objection, so
    ordered. I ask unanimous consent that Members have 5
    legislative days to submit written statements for inclusion in
    today's hearing record. Hearing no objection, so ordered.
        I am now pleased to introduce the witnesses for today's
    hearing.
        Our first witness is Kirt West, the Inspector General for
    the Legal Services Corporation. As I previously noted, he has
    served in this capacity since September 2004. Prior thereto, he
    served in very executive positions at the U.S. Postal Service
    Office of Inspector General from 1998 to 2004.
        His Government service also includes a stint as assistant
    counsel to the Inspector General in the Central Intelligence
    Agency. In addition, he has spent more than 10 years at the
    United States Department of Labor as assistant counsel to the
    Inspector General.
        Mr. West received his undergraduate degree from Lawrence
    University in 1969 and earned his Juris Doctor from the
    Northwestern University School of Law in 1984.
        Our next witness is the Inspector General for the U.S.
    Postal Service, David Williams. His office has oversight
    responsibility of the U.S. Postal Inspection Service, a Federal
    law enforcement agency within the Postal Service. Mr. Williams
    was sworn in as the second Inspector General at the Postal
    Service in August of 2003.
        Mr. Williams previously served as IG for five Federal
    agencies. He was first appointed by President George H.W. Bush
    to serve as the IG for the U.S. Nuclear Regulatory Commission
    from 1989 to 1996. President Clinton next appointed him as the
    IG for the Social Security Administration from 1996 to 1998 and
    thereafter as the IG for the Department of Treasury in 1998. In
    1999, President Clinton named him as the first IG for tax
    administration of the Department of Treasury, where he directed
    a staff of 1,050 to detect waste, fraud and abuse. In 2001
    President George W. Bush named Mr. Williams to be the Acting IG
    for the Department of Housing and Urban Development.
        Mr. Williams is the recipient of the Bronze Star and the
    Vietnamese Medal of Honor for service in Vietnam. He received
    his undergraduate degree from Southern Illinois University and
    earned his Advanced Degree in Education and a Masters in
    Education from the University of Illinois. He also attended the
    U.S. Military Intelligence Academy, the Federal Law Enforcement
    Training Center, and the U.S. Secret Service Training Academy.
    We like tough guys. Maybe I should speak generally, but I think
    Mr. Watt likes tough guys.
        Our final witness is Frank Strickland, who is the Chairman
    of the Board of the Legal Services Corporation. He is a partner
    in the Atlanta firm of Strickland Brockington Lewis LLP.
        President Bush nominated Mr. Strickland to the LSC Board of
    Directors in 2002, and he was sworn in as a member of the Board
    and elected Board chairman in April of 2003.
        Mr. Strickland received his undergraduate degree from
    Vanderbilt University and his law degree from Emory University.
    He served in the U.S. Coast Guard and is Commander in the U.S.
    Coast Guard reserves on retired status. Also a tough guy, I
    might say.
        In addition, I would also like to note that that we are
    missing a witness at today's hearing. The empty chair at the
    witness table is for the Legal Services Corporation President
    Helaine Barnett. According to Ms. Barnett, Chairman Strickland
    does not believe it is necessary for her to testify, perhaps an
    important topic for this Subcommittee to explore with him this
    afternoon.
        I extend to all of you my warm regards and appreciation for
    your willingness to participate at today's hearing. In light of
    the fact that your written statements will be included in the
    hearing record, I request that you limit your oral remarks to 5
    minutes. Accordingly, please feel free to summarize or
    highlight the salient points of your testimony.
        You note we have a lighting system in front of you that
    starts with a green light. After 4 minutes it turns to a yellow
    light, and then at 5 minutes it turns to a red light. It is my
    habit to tap the gavel at 5 minutes. We could appreciate it if
    you could finish up your thoughts within that time frame. We
    don't like to cut people off in their thinking, but I find that
    it works much better if everybody knows that 5 minutes is 5
    minutes.
        Other people may be joining us here. If not, we may be a
    little more loose than that, but it is my tendency to tap with
    a pencil just to draw your attention the light has run and so
    we will move on and then strictly abide by the 5-minute rule
    when we go to questioning if we have other members. If it is
    just Mr. Watt and me, we tend to be a little more lax on that.
    After you have presented your remarks to the Subcommittee, in
    the order they arrive they will be permitted to ask questions
    to that witness subject to that 5-minute rule.
        Pursuant to the directive of the Chairman of the Judiciary
    Committee, I ask the witnesses to please stand and raise your
    right hand to take the oath.
        The record will reflect the witnesses answered in the
    affirmative.
        [Witnesses sworn.]
        Mr. Cannon. We will start with Mr. West. Would you please
    proceed with your testimony?

     STATEMENT OF RICHARD ``KIRT'' WEST, INSPECTOR GENERAL, LEGAL
                          SERVICES CORPORATION

        Mr. West. Good afternoon, Chairman Cannon, Ranking Member
    Watt. My name is Kirk West. As you have mentioned, I have had
    nearly 20 years of experience with other IGs at Labor, CIA, and
    the Postal Service. I also had the privilege of working for
    David Williams when he was the--when I was at the Postal
    Service and in the capacity as IG. With your approval, I would
    like to submit my written statement for the record.
        Thank you for giving me the opportunity to comment on H.R.
    6101. Since the passage of the 1988 IG Act amendments, LSC has
    had an IG that reports to an 11 member part-time Board of
    Directors. The LSC board has been and is now comprised of
    honorable and dedicated individuals who brought with them a
    high degree of understanding and commitment to delivery of
    legal services to the poor. Past and current Boards, however,
    have not brought with them the same degree of understanding or
    experience concerning the role of the Inspector General.
        The challenges faced by the LSC IGs are longstanding. They
    are neither new nor unique to the current Board. The longest
    serving is Ed Quatrevaux, who held the post from 1991 to 2000.
    Mr. Quatrevaux has lent his support to H.R. 6101. He has stated
    the problems that I am facing, the same problems he faced with
    a different Board and with a different LSC management, leading
    him, as I have also, to conclude that LSC has an institutional
    problem in recognizing the proper role of the IG.
        The Board's failure to recognize the role of the IG has led
    some members to react negatively to my reports, calling them
    prosecutorial and inflammatory. However, Mr. Chairman and Mr.
    Watt, I can tell you that based on my experience in the IG
    community that my reports are no different in character than
    those of the other 57 IGs in the Government.
        The Board's reaction to them, however, is different than my
    experience at other agencies. What may seem appropriate to the
    Board based on their non-Federal background and limited
    experience with IGs are from my perspective attempts to
    retaliate against me for issuing critical reports and asserting
    IG independence. As recently as this past weekend an Associated
    Press article described the Board's efforts to fire me or
    certainly to consider firing me.
        Mr. Chairman, you and other Members of Congress have
    repeatedly put the Board on notice that any attempt to remove
    me would be construed as retaliation for conducting the very
    work that you have requested. I feel that if Congress had not
    intervened on my behalf it would have been impossible for me to
    fully carry out my statutory duty under the IG Act.
        Unfortunately, my problems have continued. On August 25th,
    the Board's chairman and vice chairman provide a, quote,
    informal feedback, unquote, on my performance. This was highly
    questionable given that the Board knew at the time I was
    investigating allegations regarding expenses and other matters
    involving the Board. I found that not only threatening and
    retaliatory but also to have the potential of causing others,
    including Congress, to question whether the feedback could have
    influenced my report.
        These events notwithstanding, I am pleased to report that
    my staff of highly experienced IG auditors, investigators and
    attorneys and I have not been deterred from carrying out the IG
    mission. Recently, I submitted a report to the Subcommittee in
    which the OIG found substantial evidence that an LSC grantee,
    California Rural Legal Assistance, Inc., violated Federal law
    by soliciting clients, working a fee generating case,
    requesting attorney fees and associating CRLA with political
    activities. Yesterday, I issued a report on the investigation
    that you requested regarding LSC spending practices, and I will
    be reporting to you later on your concerns about other LSC
    management practices and potential conflicts of interest.
        I would like now to provide some comments on H.R. 6101,
    which is modeled after the similar provision of the United
    States Postal Service. As background, there are two categories
    of Inspectors General: Those appointed by the President and
    those appointed by their agency head. Presidentially-appointed
    Inspectors General cannot be fired by their agency head; only
    the President can do that. On the other hand, Inspectors
    General appointed by their agency head can also be fired by
    their agency head, which is the current situation at LSC. And
    usually it requires an appearance before the Merit Systems
    Reduction Board. The LSC IG, however, is an at-will employee
    and can be fired without cause and without a hearing. Thus, the
    LSC IG has the least amount of job security and therefore
    potentially the most easily subjected to undue or improper
    pressure.
        Therefore, I support H.R. 6101 because it enhances
    Inspector General independence. In my opinion, H.R. 6101 is an
    appropriate, balanced, and thoughtful proposal to enhance
    Inspector General independence that will make LSC more
    transparent and accountable to Congress and the public.
        Mr. Chairman, thank you for this opportunity to testify
    before the Subcommittee.
        [The prepared statement of Mr. West follows:]

                       Prepared Statement of R. Kirt West

                                  INTRODUCTION

        Chairman Cannon, Ranking Member Watt, and Members of the
    Subcommittee: my name is Kirt West. Thank you for giving me the
    opportunity to comment on H.R. 6101, which will improve the ability of
    the LSC Inspector General (IG) to function like any other Inspector
    General. By way of personal background, I have been the Inspector
    General of the Legal Services Corporation (LSC) since September 1,
    2004. Before becoming Inspector General, I served for nearly twenty
    years as a career Federal employee in various legal and executive
    capacities for Inspectors General: at the Department of Labor, the
    Central Intelligence Agency, and the United States Postal Service. At
    the United States Postal Service which is a quasi-federal agency like
    LSC, I worked with a Presidentially-appointed part-time Board,
    comprised almost exclusively of outside directors who did not have any
    Inspector General experience. I also worked for Inspector General David
    Williams while at the Postal Service.
        Since the passage of the 1988 Inspector General Act amendments, LSC
    has had an Inspector General. Throughout those years my predecessors
    and I have reported to and been under the general supervision of a
    part-time 11-member LSC Board of Directors, unlike most Inspectors
    General who report to a full-time agency head. The LSC Board has been
    and is now comprised of honorable and dedicated individuals who have
    brought with them a high degree of understanding of the delivery of
    legal services to the poor, which is an asset to the position. Past and
    current LSC Boards, however, have not brought with them the same degree
    of understanding or experience concerning the role of the Inspector
    General. Historical and institutional misunderstanding between past and
    current Boards and their Inspectors General has threatened the
    independence and effectiveness of the LSC Inspector General.
        Efforts by LSC Boards and LSC management to stifle Inspector
    General independence through intimidation and retaliation appear to
    have existed throughout the history of the LSC Office of Inspector
    General. These problems are neither new to LSC nor unique to the
    current Board and Inspector General. The longest-serving LSC Inspector
    General, Edouard R. Quatrevaux, has lent his support to your bill and
    has stated that the problems I am facing are the same problems he faced
    with a different Board and with different LSC management, leading him
    to conclude that LSC has an institutional problem in recognizing the
    proper role of an Inspector General. Inspector General Quatrevaux was
    criticized for issuing reports that the former Board did not like and
    for communicating with Congress. He reported to Congress that the
    Board's criticism posed a potential impairment on his independence. As
    a result, GAO was called in to intervene but the disagreement between
    the Board and the Inspector General about the Board's proper role in
    evaluating the Inspector General still remains unresolved.
        As a preliminary matter, I would like to note that I am not
    completely comfortable commenting on H.R. 6101, a legislative proposal
    that would have an impact on the Inspector General office that I
    currently hold. As someone who has worked in the federal Inspector
    General community for so long, it has become second-nature for me to
    try to ensure that whatever I say or do is legal and ethical and
    impartial. Ordinarily I would not volunteer to comment either one way
    or the other on a matter such as H.R. 6101, which could affect me
    personally. However, at your request I am prepared to offer my views
    concerning the proposed legislation. H.R. 6101 is similar to a
    provision enacted for the Inspector General of the United States Postal
    Service. The bill would, if enacted, require nine of the eleven LSC
    Board members to agree to remove me or a future incumbent from the
    position of Inspector General. It would require three more Board
    members than the current majority requirement of six to remove me or my
    successors.
        When I agreed to become the Inspector General for LSC in 2004 I was
    aware that there had been an Inspector General at LSC since the late
    1980's. I was relatively confident that the LSC Board had gone through
    the same familiarization process as other agency heads in dealing with
    the Inspector General concept. I lived through those processes at the
    Department of Labor, the CIA, and the Postal Service, where those
    agency heads eventually came to terms with having an Inspector General
    who was independent, who had access to information, and who reported
    openly and regularly to Congress. Over the past two years, however, I
    have become aware that LSC Boards have not developed the same
    understanding of the role of their Inspector General.
        My initial experience of the lack of appreciation of the IG concept
    and the role of the Inspector General occurred when I issued my first
    report to Congress concerning the LSC headquarters lease. As I
    testified before this Subcommittee last June, the report made several
    observations, including that LSC was paying too much rent and paying
    higher rent than other tenants. The then 10-member LSC Board (6 of whom
    remain on the current Board) unanimously ``rejected'' the lease report.
    The report, however, had undergone a quality review that ensured it
    contained accurate information. The report was predicated on the work
    of two independent real estate appraisal experts as well as very senior
    and experienced career IG auditors and lawyers. The fact that the Board
    ``rejected'' this report was an early indication that the Board did not
    fully comprehend the role of an Inspector General.
        I have taken affirmative steps to help familiarize the Board with
    what an independent, effective Inspector General is supposed to do. I
    arranged for David Williams, a highly-respected Inspector General with
    many years of experience, to address the LSC Board, which he did. Mr.
    Williams, who served not only as Inspector General at the Nuclear
    Regulatory Commission, the Treasury Department, the Internal Revenue
    Service, and at the United States Postal Service, but also as the first
    chief investigator at the then Government Accounting Office, spoke to
    the Board at length about the role of an Inspector General. In
    addition, I arranged for a meeting with the LSC Chairman and Senate
    appropriations staff to share a Congressional perspective about the
    role of an Inspector General and how an agency should interact with its
    Inspector General. I offered to arrange more such meetings. I also
    suggested to the LSC Chairman that we meet with the Deputy Director for
    Management at the Office of Management and Budget, who serves as the
    Chairman of the Inspector General councils. Finally, I reported my
    concerns to the Vice-Chairman of the Executive Council on Integrity and
    Efficiency in an attempt to find other, informal ways of improving the
    LSC Board's relationship with the Inspector General.
        The Board's failure to recognize the Inspector General's role has
    led some members to react negatively to my reports, calling them
    prosecutorial and inflammatory. However, Mr. Chairman, I can tell you
    and members of the Subcommittee that based on my 20+ years of
    experience in the IG community my reports are no different in character
    than those issued by other IGs. The Board's reaction to them, however,
    is different than what my experience prepared me for. What may seem
    appropriate to the Board based on the members' non-federal backgrounds
    and limited experience with IGs are from my perspective attempts to
    retaliate against me for issuing critical report and for asserting IG
    independence. The Board's misunderstanding of the role of its Inspector
    General may not be so surprising given the background and experience of
    most members in the non-Federal sector, which is generally unfamiliar
    with the Inspector General concept, a concept that was also difficult
    in the early years of the IG Act for some agencies.
        For example, as recently as this past weekend, an Associated Press
    article quoted the proceedings of a closed Board meeting which the
    article described the Board's discussion about firing me. There had
    been previous concerns that some Board members would like to fire me.
    As a result, Mr. Chairman, you wrote the LSC Board in July of last year
    to express your concerns. In addition, Senators Enzi and Grassley wrote
    to the LSC Board in April 2006 informing the Board that any attempt to
    remove the Inspector General would be construed as retaliation and
    obstruction of an investigation that they, along with you, Mr.
    Chairman, had asked me to conduct on a number of issues involving the
    LSC Board and the LSC President. I feel that if Congress had not
    intervened on my behalf, it would have been impossible for me to carry
    out my statutory duties under the IG Act.
        My difficulties, unfortunately, have continued. On August 25, the
    Board provided ``informal feedback'' on my performance. Among other
    things, I was told that I take a prosecutorial stance towards
    management, I issue inflammatory reports and I am not a positive help
    to LSC. These and other criticisms by the Board are examples of a
    misunderstanding about the role of an Inspector General, which includes
    being independent and objective, obtaining necessary information, and
    reporting findings that could be critical of management.
        The decision of the Board to provide ``informal feedback'' was
    highly questionable given that the Board knew I was investigating
    allegations regarding expenses and other matters involving the Board.
    While I respect the role of the Board, which is statutorily responsible
    for the ``general supervision'' of the Inspector General, and while the
    Board may have felt its actions were appropriate from the private-
    sector perspective, I found the ``informal feedback'' not only
    threatening and retaliatory but also having the potential of causing
    others, including Congress, to question whether the feedback could have
    influenced my report.
        These events notwithstanding, I am pleased to report that my staff
    of highly experienced IG auditors, investigators and attorneys and I
    have not been deterred from carrying out the IG mission. Recently, I
    submitted a report to the Subcommittee in which the OIG found
    substantial evidence that an LSC grantee, California Rural Legal
    Assistance, Inc., violated federal law by soliciting clients, working a
    fee generating case, requesting attorney fees, and associating CRLA
    with political activities. Yesterday, I issued a report on the
    investigation that you requested regarding LSC spending practices and
    will be reporting to you later on your concerns about other LSC
    management practices and potential conflicts of interest.
        I would like now to provide some comments to H.R. 6101, which
    proposes to amend the Legal Service Corporation Act to provide
    appropriate removal procedures for the Inspector General. In addition
    to the Board's current authority to appoint and remove the Inspector
    General, the proposed legislation states that ``The Inspector General
    may at any time be removed upon the written concurrence of at least 9
    members of the Board.'' As background, there are two categories of
    Inspectors General: those appointed by the President, and those
    appointed by their agency head. Presidentially-appointed Inspectors
    General cannot be fired by their agency head; only the President can do
    that. On the other hand, Inspectors General appointed by their agency
    head can also be fired by their agency head, which is the current
    situation at LSC. However, because virtually every other Inspector
    General appointed by their agency head is also a Federal employee, they
    could not be fired without cause. The Inspector General at LSC,
    however, is an at-will employee and can be fired without cause. Thus,
    the LSC Inspector General stands out as the Inspector General who has
    the least amount of job security and therefore potentially the most
    easily subject to undue or improper pressure.
        I support H.R. 6101 because it enhances Inspector General
    independence. The bill could go further by requiring removal for cause.
    At this time I would not recommend making the office a Presidential
    appointment. However, that is an option worth keeping available in the
    event it is needed. There is already precedent for Congress converting
    an agency-head appointed Inspector General into a Presidential
    appointee: this was done at the Federal Deposit Insurance Corporation
    and the Tennessee Valley Authority. The TVA Inspector General became a
    Presidential appointment as a result of the TVA Board trying to
    interfere with the independence of the Inspector General, resulting in
    a GAO investigation requested by then Senator Fred Thompson. The
    situation faced by the TVA Inspector General is not unlike the
    situation I am facing today. In my opinion, H.R. 6101 is an
    appropriate, balanced, and thoughtful proposal to enhance Inspector
    General independence that will make LSC more transparent and
    accountable to Congress and the public.
        There is also precedent for requiring a super-majority to remove an
    Inspector General. In 1996, Congress created an Inspector General at
    the United States Postal Service who would no longer report to the
    Postmaster General but instead report to the nine Presidentially-
    appointed Governors who, along with the Postmaster General and the
    Deputy Postmaster General, comprise the Board of Governors. The Postal
    Service opposed the creation of an independent Inspector General who
    was not appointed by the Postmaster General. Congress, clearly
    concerned about having an Inspector General removed by a simple
    majority of a part-time Board, enacted 39 U.S.C. Sec. 202(e)(3) stating
    that removal of the Inspector General required written concurrence of
    at least 7 of the 9 Governors. By requiring a super-majority, Congress
    implicitly recognized that, like at LSC, the Board could be unduly
    influenced by management and thereby helped balance that influence.
    This was the compromise struck between Congress and the Postal Service
    in lieu of establishing a Presidentially-appointed Inspector General.
        Finally there are some additional reasons why H.R. 6101 is needed
    at LSC more so than at other agencies. At LSC it is not unusual for
    Board members and LSC senior managers to have close ties from working
    together outside LSC in the private legal services sector. These kinds
    of close relationships among LSC Board members and LSC managers and
    employees and LSC grantees and related organizations are part of the
    LSC culture and could be one of the reasons why the Inspector General
    role is not as well understood as it should be and why it is important
    to have an independent Inspector General.

                                   CONCLUSION

        Mr. Chairman, thank you for this opportunity to testify before the
    Subcommittee. I remain proud of the work being done by my staff which
    has been operating under difficult circumstances. I appreciate the
    support you and your staff have shown both for the work we have done
    and for the need to ensure that LSC's Inspector General can operate as
    Congress intended so that you, the Board and the public can be informed
    by our reports and ultimately LSC can be improved for the benefit of
    LSC, its client community and the taxpayer public. I also would be
    remiss in not extending my appreciation to those new members of the
    Board who have been supportive of my office. As someone who respects
    and values the work of lawyers who serve the poor, and as someone who
    spent his first working years in the Cabrini Green public housing
    project and other inner-city slums, I can tell you that I have only the
    best interests of the poor at heart every day when I go to work. I look
    forward to ensuring that the poor will have our support by continuing
    to conduct independent and objective reviews so the LSC Board,
    Congress, and the public can be assured that LSC is being operated
    lawfully, efficiently, economically, and with integrity.

        Mr. Cannon. Thank you, Mr. West.
        Mr. Williams.

       STATEMENT OF DAVID C. WILLIAMS, INSPECTOR GENERAL, LEGAL
                          SERVICES CORPORATION

        Mr. Williams. Mr. Chairman, Mr. Watt, and Members of the
    Subcommittee. I appreciate the opportunity to appear today to
    discuss the importance of Inspector General being able to speak
    independently about problems and concerns with an agency
    without fear of intimidation or retaliation.
        I began my Government career with the U.S. Army in Vietnam
    and then as a Special Agent with the U.S. Secret Service. I was
    later an investigator and manager at the Department of Labor's
    Office of Inspector General for a total of 15 years. Since then
    I have served as an Inspector General for a total of 15 years,
    beginning with the U.S. Nuclear Regulatory Commission in 1989.
    I have also served as the Inspector General for the Social
    Security Administration, the Department of Treasury, the IRS
    and as the Acting Inspector General for HUD. I have been the
    Inspector General for the U.S. Postal Service since 2003.
        In all of my assignments as the IG, a key element of being
    effective has been the ability to provide the agency's
    management, Congress and the public with independent reports
    concerning employee misconduct, agency programs and operation.
    Inspector Generals were established following the congressional
    investigations in 1974 to protect the public from Government
    abuse, waste and misconduct. An Inspector General must be able
    to speak honestly, without fear of retaliation or intimidation
    from anyone.
        Anything less would have a chilling effect on the ability
    of Government investigators to do their jobs, and neither
    Congress nor the public would receive the full benefit of frank
    and truthful findings.
        When instances of retaliation do occur, you must take
    action immediately to address it. Early in my period of
    Inspector General appointment at the Nuclear Regulatory
    Commission, Congress and the NRC commission asked me to conduct
    a high level internal investigation. The investigation
    concerned allegations about the executive director who at the
    time was being considered for a presidential appointment at the
    Department of Energy.
        At the conclusion of the investigation, the executive
    director stepped down from his position. I also led an
    investigation of the President of the International Board of
    Teamsters while at the Labor Department. That individual
    complained to the Labor Secretary and the White House, but was
    ultimately indicted.
        I have investigated a number of other senior executives who
    often possessed substantial what I call clout and had
    influential friends. These investigations could not have been
    successful without the independence provided without the IG
    Act. The independence of Inspectors General is ensured by the
    IG Act's requirement that the President or the agency's
    governing entity appoint them. Congress further mandates that
    the agency not prevent or prohibit the Inspector General from
    initiating, carrying out or completing an audit or an
    investigation.
        The Postal Service Reorganization Act additionally protects
    my independence as IG for the Postal Service. The statute
    provides that the Postal Service IG may only be removed for
    cause and only with the concurrence of seven of the nine
    governors appointed by the President and confirmed by the
    Senate. This provision ensured that management cannot remove me
    for reporting information, for reporting information that they
    do not want me to report.
        In conclusion, it is of paramount importance to me and to
    all Inspectors General that our independence be protected so
    that the work the Administration and the public expect can be
    performed under the IG Act.
        While this independence is legislated in the IG Act, I have
    always strongly believed that Congress and the Administration
    can be relied upon to enforce the rule of law.
        If it is clear that independence is being compromised and
    if Congress fails to act decisively, there will be little or no
    honest reporting, and that is not what the Government and the
    public deserve. Thank you.
        [The prepared statement of Mr. Williams follows:]

                    Prepared Statement of David C. Williams

        Mr. Chairman and members of the Subcommittee, I appreciate the
    opportunity to appear today to discuss the importance of Inspectors
    General being able to speak independently about problems and concerns
    with an agency without fear of intimidation or retaliation.
        I began my government career with the U.S. Army in Vietnam and then
    became a special agent with the U.S. Secret Service. I was later an
    investigator and manager at the Department of Labor's Office of
    Inspector General and worked at GAO. Since then I have served as an
    Inspector General for a total of 15 years, beginning at the U.S.
    Nuclear Regulatory Commission in 1989. I have also served as the
    Inspector General for the Social Security Administration, the
    Department of the Treasury, and the IRS, and as the Acting Inspector
    General for HUD. I have been the Inspector General for the U.S. Postal
    Service since 2003.
        In all of my assignments as an Inspector General, a key element of
    being effective has been the ability to provide the agency's
    management, Congress, and the public with independent reports
    concerning employee misconduct and agency programs and operations.
    Inspectors General were established following Congressional
    investigations in 1974 to protect the public from government abuse,
    waste, and misconduct. An Inspector General must be able to speak
    honestly without fear of retaliation or intimidation from anyone.
    Anything less would have a chilling effect on the ability of government
    investigators to do their jobs and neither Congress nor the public
    would receive the full benefit of frank and truthful findings. When
    instances of retaliation do occur, we must take action immediately to
    address it.
        Early in my first Inspector General appointment at the Nuclear
    Regulatory Commission (NRC), Congress and the NRC commissioners asked
    me to conduct a high-level internal investigation. This investigation
    concerned allegations about the executive director, who at the time,
    was being considered for a presidential appointment in the Department
    of Energy. At the conclusion of the investigation, the executive
    director stepped down from his position. I also led an investigation of
    the President of the International Brotherhood of Teamsters while at
    the Labor Department. That individual complained to the Labor Secretary
    and White House, but was ultimately indicted. I have investigated a
    number of other senior executives who often possessed substantial
    political clout and had influential friends. These investigations could
    not have been successful without the independence provided by the IG
    Act.
        The independence of Inspectors General is ensured by the IG Act's
    requirement that the President or the agency's governing entity appoint
    them. Congress further mandates that the agency not prevent or prohibit
    the Inspector General from initiating, carrying out, or completing any
    audit or investigation.
        The Postal Reorganization Act additionally protects my independence
    as the Inspector General of the Postal Service. This statute provides
    that the Postal Service IG may only be removed for cause, and only with
    the concurrence of seven of the nine Governors appointed by the
    President and confirmed by the Senate. This provision ensures that
    management cannot remove me for reporting information they do not want
    to hear.
        In conclusion, it is of paramount importance to me and to all
    Inspectors General that our independence be protected so that the work
    the Administration and the public expect can be performed under the IG
    Act. While this independence is legislated in the IG Act, I have always
    strongly believed that the Congress and the Administration can be
    relied upon to enforce the rule of law. If it is clear that
    independence is being compromised and Congress fails to act decisively,
    there will be little or no honest reporting and that is not what the
    government and the public deserve.

        Mr. Cannon. Thank you, Mr. Williams.
        Mr. Strickland, you are recognized for 5 minutes.

              STATEMENT OF FRANK STRICKLAND, CHAIRMAN OF
                 THE BOARD, LEGAL SERVICES CORPORATION

        Mr. Strickland. Thank you, Mr. Chairman and Ranking Member
    Watt and Members of the Subcommittee. I am pleased to be here
    today to testify before you with respect to H.R. 6101,
    legislation that would require 9 of the 11 members of the Board
    of Directors of the Legal Services Corporation to agree in
    writing in order to discharge the corporation of the Inspector
    General. Accompanying me today are Professor Lillian Bevier,
    the Board's Vice Chairman and a distinguished Professor of Law
    at the University of Virginia, and Michael D. McKay, the
    Chairman of the Board's Finance committee. Mr. McKay is a
    partner in the law firm of McKay Chadwell in Seattle and a
    former U.S. Attorney for the Western District of Washington.
        Both of them have traveled considerable distances today to
    indicate the Board's serious interest in the matters before the
    Committee today. And we thank you for accommodating our
    schedules so that we can be here today.
        For my part, I have been in the private practice of law in
    private practice in Georgia in law firms ranging from 4 to 100
    lawyers. I'm a past President of the Atlanta Bar Association. I
    have also served 11 years as a member of the Board of Directors
    of Georgia Legal Services and the Atlanta Legal Aid Society.
        The Federal Legal Services program is often
    mischaracterized by some conservatives as being a liberal tool.
    I could not disagree more. This is a fundamentally conservative
    program. It is about giving poor people an equal shot to
    justice in our judicial system on civil matters. The leading
    early proponent of creating a system was Justice Lewis Powell.
    One of the original sponsors of creating LSC was the late
    Congressman John Erlenborn, who served as the most recent
    previous President of LSC.
        Supporters of LSC over the years have included a
    conservative Republican Senator, Warren Rudman, John Danforth,
    and Pete Domenici and Members of the House such as Bill
    Livingston and Frank Wolf.
        Mr. Chairman, with due respect and understanding that we
    are discussing a bill that you introduced, the LSC board cannot
    support H.R. 6101 or its predecessor, H.R. 5974. The Congress
    created 57 Inspectors Generals by statute. All of the IGs with
    the exception only of the IG of the Postal Service, to our
    knowledge, serve at the pleasure of either the President or the
    head of the agency, depending on who appointed him or her
    initially.
        When the head of the agency is a multi-person body, such as
    the LSC Board of Directors, the decision to appoint or
    discharge the IG is made pursuant to the rules of the agency.
    In every other instance where the head of the agency is a
    multi-person body, it is my understanding that only a majority
    vote is required.
        The LSC Board of Directors operates on a majority vote
    based on all matters pending before it except that under the
    statutory language in the LSC Act it takes 7 votes of the Board
    to remove a director for malfeasance. While our Board at full
    strength has 11 directors, during my 3\1/2\ years as chairman
    at most times there have been one or two vacancies. The Board
    presently only has 10 members. Thus, the effect of H.R. 6101
    would be able to require actual or virtual unanimity with
    respect to the removal of the LSC IG no matter what the cause.
        It takes only one-half of the House and two-thirds of the
    Senate to remove the President of the United States. We think
    it noteworthy that only the LSC IG would be affected by H.R.
    6101. We have been unable to discern a rationale, and none has
    been offered for singling out the LSC for such extraordinary
    treatment. My colleagues on the Board and I, all of whom were
    nominated by President Bush and who were confirmed by the
    Senate, have worked diligently and in complete good faith on
    all matters coming before us, including our relationship with
    the IG.
        Indeed, Professor Bevier and I have made several trips to
    Washington to personally meet with LSC management and the IG to
    work on communications issues and to improve the relationship
    between the two. We expect and pledge to continue to work on
    this relationship.
        As we are the Board that appointed the incumbent IG, we
    have every interest in his successful tenure, but precisely
    because we are the Board that appointed this IG we think it
    would be quite unwise to legislate the unusual and
    extraordinary job protections that H.R. 6101 provides.
        While the Board is not permitted to interfere in actions
    taken by the IG, and I should emphasize that we in no case
    would do so, the IG is under our general supervision as we
    constitute the head of the agency. The power to supervise
    presumes the power to remove. While I have spent my career in
    the private sector and never dealt with an IG before I took
    this position, I believe this must be why Congress did not
    provide the kind of job protection for any IG that H.R. 6101
    would create for LSC.
        I would like to touch briefly on two other points.
        First, the LSC IG has in the past year asserted that the
    Board should not engage in a review of his performance. The
    power to remove the IG, whether or not with the supervisor
    majority as 6101 would provide, presumes the authority to
    review his performance. Absent a performance review, on what
    basis would we decide whether to retain or discharge him.
        Moreover, the Office of Management and Budget on November
    13, 1992 issued a memorandum to the heads of designated Federal
    entities regarding their relationship with IGs. The memorandum
    provides specifically that the general supervision provision in
    the Inspector General Act includes, quote, conducting the
    annual performance review of the IG, end quote.
        After our IG made the argument that we should not conduct a
    performance review of him, we sought outside legal counsel from
    Thomas Williamson, Jr., a former deputy IG at the Department of
    Energy. His legal memorandum states in no uncertain terms that
    we not only have the authority to review the IG's performance
    but also the obligation to do so. We would continue to be under
    such an obligation even if H.R. 6101 were to pass.
        Second, there have been some suggestions that the Board
    should not review the IG's performance because he has been, at
    the request of Members of Congress, investigating certain
    allegations, some of which pertain to the Board.
        The Board discussed undertaking a performance review of the
    IG's performance in 2005, months before the March 2006
    investigation commenced. That discussion predated the
    investigation and is in no way related to it. According to the
    report issued by the IG yesterday, the IG found that the Board
    had done nothing improper and much less illegal. That
    investigation has no bearing on the Board's responsibility to
    conduct a performance review.
        I would be happy to answer any questions.
        [The prepared statement of Mr. Strickland follows:]

                   Prepared Statement of Frank B. Strickland

        Mr. Chairman, Representative Watt and Members of the Subcommittee,
    I am pleased to be here today to testify before you with respect to
    H.R. 6101, legislation that would require nine of the eleven members of
    the Board of Directors of the Legal Services Corporation to agree in
    writing in order to discharge the Corporation's Inspector General.
    Accompanying me today are Professor Lillian Bevier, the Board's Vice
    Chairman and a distinguished Professor of Law at the University of
    Virginia, and Michael D. McKay, the Chairman of the Board's Finance
    Committee. Mr. McKay is a partner in the law firm of McKay Chadwell in
    Seattle and a former U.S. Attorney for the Western District of
    Washington. Thank you for accommodating our schedule so that we can be
    here today.
        For my part, I have been in the private practice of law in Atlanta,
    Georgia for forty years in law firms ranging in size from four to
    twelve hundred lawyers. I am a past President of the Atlanta Bar
    Association and was outside General Counsel to the Georgia Republican
    Party for many years and continue to represent Republican Party
    interests in the state, most recently filing an amicus brief on behalf
    of the Georgia legislative leadership supporting the State of Texas on
    its 2003 redistricting plan. While one piece of their plan was
    overturned and remanded, I would note that on the issues of concern to
    the Georgia legislature, we prevailed. I also served eleven years as a
    member of the Board of Directors of Georgia Legal Services and the
    Atlanta Legal Aid Society.
        The federal legal services program is often mischaracterized by
    some conservatives as being a liberal tool. I could not disagree more.
    This is a fundamentally conservative program. It is about giving poor
    people a shot at equal access to justice in our judicial system on
    civil matters. The leading early proponent of creating the Legal
    Services Corporation was Justice Lewis Powell. One of the original
    sponsors of creating LSC was Congressman John Erlenborn, who served as
    the most recent previous President of LSC. Supporters of LSC over the
    years have included conservative Republicans such as Warren Rudman,
    John Danforth and Pete Domenici, and Members of the House such as Bill
    Livingston and Frank Wolf. I will stop there for fear of leaving people
    out.
        Mr. Chairman, with due respect and understanding that we are
    discussing a bill you introduced, the LSC Board cannot support either
    H.R. 6101 or its predecessor bill, H.R. 5974. The Congress created 57
    Inspectors General by statute. All of the IG's, with the exception only
    of the IG of the Postal Service, serve at the pleasure of either the
    President or the head of the agency, depending on who appointed him or
    her initially. When the head of the agency is a multi-person body, as
    is the LSC Board of Directors, the decision to appoint or discharge the
    IG is made pursuant to the rules of the entity. In every other instance
    where the head of the agency is a multi-person body, it is my
    understanding that only a majority vote is required.
        The LSC Board of Directors operates on a majority vote basis on all
    matters pending before it (except that it takes seven votes to remove a
    Director for malfeasance). While our Board at full strength has eleven
    directors, during my three and one-half years as Chairman, there have
    at most times been one or two vacancies The Board presently has only
    ten members. Thus, the effect of H.R. 6101 would be to require actual
    or virtual unanimity with respect to the removal of the LSC IG no
    matter what the cause. This is highly unusual to say the least. It
    takes only one-half of the House and two-thirds of the Senate to remove
    the President of the United States.
        We think it noteworthy that only the LSC IG would be affected by
    H.R. 6101. We have been unable to discern a rationale--and none has
    been offered--for singling out the LSC IG for such extraordinary
    treatment. My colleagues on the Board and I, all of whom were nominated
    by President Bush and unanimously confirmed by the Senate, have worked
    diligently in complete good faith on all matters coming before us,
    including our relationship with the IG. Indeed, Professor Bevier and I
    have made several trips to Washington to personally meet with LSC
    management and the IG to work on communication issues and the
    relationship between the two. We expect and pledge to continue to work
    on this. As we are the Board that appointed the incumbent IG, we have
    every interest in his successful tenure. But precisely because we are
    the Board that appointed this IG, we think it would be quite unwise to
    legislate the unusual and extraordinary job protection that H.R. 6101
    provides.
        While the Board is of course not permitted to interfere in
    investigations undertaken by the IG--and I should emphasize that we
    would in no case do so--the IG is under our general supervision, as we
    constitute the head of the agency. The power to supervise presumes the
    power to remove. While I have spent my career in the private sector and
    never dealt with an IG before I took this position, I believe this must
    be why Congress did not provide the kind of job protection for any IG
    that H.R. 6101 would create for LSC's.
        I would like to briefly touch on two other points. First, the LSC
    IG has in the last year been asserting that the Board should not engage
    in a review of his performance. The power to remove the IG-whether or
    not with a super-majority such as H.R. 6101 would require--presumes the
    authority to review his performance. Absent a performance review, on
    what basis would we decide whether to retain or discharge him?
    Moreover, the Office of Management and Budget, on November 13, 1992,
    issued a memorandum to the heads of designated federal entities
    regarding their relationship with their IGs. The memorandum provides
    specifically that the ``general supervision'' provision on the
    Inspector General Act includes ``conducting the annual performance
    evaluation of the IG.'' After our IG made the argument that we should
    not conduct a performance review of him, we sought outside legal
    counsel from Thomas S. Williamson Jr., a partner at Covington & Burling
    and a former Deputy IG of the Department of Energy. His legal
    memorandum to us states in no uncertain terms that we not only have the
    authority to review the IG's performance, but also the obligation to do
    so. We would continue to be under such an obligation even if H.R. 6101
    were to pass.
        Second, there have been some suggestions that the Board should not
    review the IG's performance because he has been, at the request of some
    Members of Congress, investigating certain allegations, some of which
    pertain to the Board. The Board discussed undertaking a performance
    review of the IG's performance in 2005, months before the March 2006
    investigation commenced; that discussion predated the investigation and
    is in no way related to it. According to the report issued by the IG
    yesterday, the IG found that the Board had done nothing improper, much
    less illegal. That investigation has no bearing on the Board's
    responsibility to conduct a performance review.
        I would be happy to answer any questions.

        Mr. Cannon. Thank you, Mr. Strickland.
        Ask unanimous consent to add Ed Quatrevaux's letter into
    the record. Hearing no objection, so ordered.
        Mr. Watt. Let me reserve the right to object. This is just
    his opinion.
        I withdraw my objection.
        Mr. Cannon. The objection is withdrawn, so ordered.
        Mr. West, based on your 20 years, actually 20 plus years,
    in the Inspector General service, have you ever encountered
    such efforts to stifle independence as you have received at
    LSC?
        Mr. West. I have not encountered such efforts. When I first
    started at the Department of Labor in 1986 in the IG's office,
    I heard the stories about the early days of where they were
    trying to keep the IGs from having access to documents, access
    to people, but I did not encounter that when I was there, that
    the IG concept had become premature. The same thing when I went
    to the CIA. They had independent IG statutory for a number of
    years and the agency had gotten used to the IG and the same
    thing with the Postal Service, with a couple of bumps because
    it was a relatively new IG, but the language that Congress put
    in giving the IG this extra job security was to enable the IG
    to start Congress doing its job.
        So when I thought I was coming to Legal Services
    Corporation that had an IG for 16 years, I was expecting smooth
    sailing and I have run into a lot of obstacles in terms of
    access to records, took a lot of criticism of reports, trying
    to tell me what should be in reports. I didn't put a document
    in here. I should have said something differently, and I never
    experienced that before.
        Mr. Cannon. Ed Quatrevaux was with LSC 15 years ago or so
    and--have you talked to him about these things? Has he
    expressed the problems and can you see a thread that draws
    these kind of problems together that he has referenced?
        Mr. West. I have not talked to Ed personally. I have
    actually read his files, though. I have read his files where
    his notes to files regarding trying to curtail communications
    with Congress, criticizing his communications with Congress,
    the attempt to use a performance appraisal to get him to back
    off from some of the projects he was taking on. And my seniors,
    two of my senior staff members worked for both Ed and me and
    they can tell you if you can remember the movie Ground Hog Day,
    they feel like they wake up and it's 10 years ago.
        Mr. Cannon. I'll talk to Mr. Strickland a little later
    about this, but you suggested that presidential impeachment
    where you need a majority in the House and two-thirds in the
    Senate is a lower bar than having nine members of a Board to
    have you dismissed. That seems to me to be extraordinary
    because of the nature of the focus of the public and the number
    of people involved in impeachment.
        But in the case of a Board, what seems to me here is that
    you have this consistent opposition to a person who exists in
    what should be an aid to, what is described as a volunteer
    Board, so these people don't come in here with the history of
    the organization, they don't come in with bylaws that they
    insist on happening. They join the organization that has
    ongoing rules, regulations and legislation to guide this
    activity and yet there are many lawyers working with or for--or
    under contract through the agency who seem to be sending
    signals back up about what they'd like and why the Board should
    like that.
        And am I missing this or has this always been the problem
    with Mr. Quatrevaux and others from the beginning, that there
    is this tension of what the Board gets in its head to do in its
    inexperienced nonprofessional context and what the rules and
    the regulations set forth.
        Mr. West. I don't think you are missing anything, Mr.
    Chairman. I think one of the other problems is that the LSC by
    virtue of being a D.C. nonprofit corporation is really isolated
    from the mainstream Federal Government. I don't have--they
    don't have a cadre of senior executives like the other agencies
    do. Say in another agency a new secretary comes in or new
    administrator and they may get all bent out of shape about an
    IG report. They have their senior executives telling them we
    have been through this, we understand what's going on. And it's
    okay. LSC doesn't have any kind of continuity like that. There
    are only two senior officers of the corporation who have been--
    remained around from the early days and with some of the
    information that has been submitted to you, as a result of your
    investigation, you may notice that both of those officers were
    instructed by the LSC President not to directly be in contact
    with the Board. So the Board didn't even have the advice of
    their counsel.
        And the report I submitted to you yesterday, the controller
    who was trying to enforce the travel contract that LSC has with
    the General Services Administration was not permitted to
    discuss the issue with the Chairman. So the Chairman did not
    receive information from the person who had the history and
    that kind of information.
        So there is a definite problem with the Board getting the
    kinds of information they need.
        Mr. Cannon. My time has expired.
        Mr. Watt, the gentleman is recognized for 5 minutes.
        Mr. Watt. I guess I am having a little trouble
    understanding how this bill would address that last point you
    made there, Mr. West.
        You are saying there was lack of communication between who
    and the Board?
        Mr. West. The senior officers, the general counsel.
        Mr. Watt. Why was there lack of communication?
        Mr. West. Because the President of the corporation issued
    directions that nobody was--neither the treasurer nor the
    general counsel were to be in--directly in contact with the
    Board, that all communications with the Board had to go through
    her, notwithstanding the fact that they are officers of the
    corporation.
        Mr. Watt. And when the Board found out about that, would
    they have the authority to tell the Director that that is--that
    was something that they did not want or want?
        Mr. West. That has eventually changed in the last few
    months, but it went on for some period of time and there was an
    indication----
        Mr. Watt. And we are here in legislation stating about
    something that has changed that the bill wouldn't have any
    impact anyway? Is that--I don't--Mr. Chairman, I am feeling
    very frustrated here because I actually think we are doing a
    disservice to Mr. West and Mr. Strickland and the Legal
    Services Corporation by making what--making something that is
    delicate already worse. Mr. West being here appears to me to
    be, and I am sure it is not his fault, very self-serving. The
    Board being here to testify about this bill seems to me to be
    very self-serving. And so nobody wins here. We are not getting
    any independent evaluation of whether this is a good bill or
    not from independent sources.
        I appreciate Mr. Williams being here. You may be the only
    independent person in here on this, but we can't make public
    policy because of some personal personality dispute between an
    IG and a corporation.
        And I think, I mean, I have been about at this point for a
    long time behind the scenes, but I think now we are at this
    point in front of the public view that this has just
    deteriorated into a petty squabble that probably nobody is
    completely right in or completely wrong in.
        Mr. Cannon. Would the gentleman yield?
        Mr. Watt. Not to mention the staffs of our Committees,
    which is what is beginning to irritate me substantially. You
    know, we sit in a room and talk about this stuff and we think
    we have it worked out and then everything that we think we have
    worked out gets undermined by some staff person who's got their
    own personal agenda at work. And now we are out playing it out
    in public as if we are the knights in shining armor to go and
    save this institution from itself.
        These people were appointed by the President of the United
    States. They have responsibilities. They are all lawyers. They
    know how to distinguish between talking to Mr. West and making
    an evaluation of his performance, and the criteria that he is
    supposed to perform on and interfering in inappropriately with
    the work that he is doing. We make those judgements every day
    as Members of the Congress. Otherwise, I couldn't ever go up to
    the Intelligence Committee. I am a Member of Congress. I am
    communicating with my constituents every day and there are some
    things I can't tell him because I read it up in the
    Intelligence Committee.
        I can make those distinctions, and I think this Board can
    make those distinctions, and we are doing this corporation and
    Mr. West and everybody a disservice, I think, having a hearing
    that relegates this into some petty dispute and makes us all
    look bad, in my opinion.
        Now I am happy to yield to the Chairman.
        Mr. Cannon. The gentleman's time has expired.
        Mr. Watt. I ask unanimous consent for 1 minute and I will
    yield it to the Chairman so he can say what he wanted to say
    when he tried to interrupt me and when I got up on my soap box.
        Mr. Cannon. If I knew you were getting on your soap box and
    going on a roll, I wouldn't have asked for time. Thank you for
    the 1 minute.
        Let's go to a second round if that is okay. And so I'll
    recognize myself for 5 minutes.
        Oh, I am sorry. We do have Mr. Franks here. And that means
    I probably need to accept your motion or your unanimous
    consent. And so I have 1 minute to respond.
        There are a couple of things that are disconcerting to me
    that you talked about, the first being that this is a Board
    that is being run by people who are professionals. Having
    served on a Board and watched what has happened with Boards and
    the fall out that we have had at major corporations, recently
    including Hewlett Packard, odd problems subject to the mind
    that members of the Board should be saying to themselves I have
    a fiduciary position and I need some help. In fact, I might
    just ask Mr. Strickland, is it true that Ms. Barnett told the
    treasurer or the general counsel not to talk to members of the
    Board?
        Mr. Strickland. The way Ms. Barnett has organized the
    operation, we have a chief administrative officer. And the
    treasurer reports to the chief administrative officer. When
    they make presentations to the Board, when they, the chief
    administrative officer and the treasurer make presentations to
    the Board, they do so jointly. So the Board has access to the
    treasurer.
        Mr. Cannon. Has she said to any officers at LSC that they
    shouldn't talk to Board members?
        Mr. Strickland. I don't know.
        Mr. Cannon. Well, then we will leave it at that. But let me
    say that is appalling to me. I don't know how anybody could be
    on a Board who doesn't feel like he had the opportunity to walk
    into any employee's office, anybody's office and----
        Mr. Watt. Can I reclaim my time? It might be appalling to
    you, Mr. Chairman, but that is a level of micromanagement that
    I think is not befitting this institution, the Board or this
    Congress and, you know, if we start micromanaging at this
    level, it is appalling to me.
        Mr. Cannon. I think the gentleman is correct that any Board
    member who goes in to a secretary and looked over his shoulder
    while he is typing is probably an idiot. Unless there is
    something for that.
        Mr. Watt. That is not what I am talking about. I am talking
    about us looking over the shoulder of the Board of--you know,
    hey, I wouldn't any more condone the Board going in and looking
    over the shoulder of a secretary than I would condone the
    Members of Congress going in and looking over the shoulder of
    the Board.
        This Board has responsibilities. It has not violated those
    responsibilities that has been able to decipher. It has not
    violated those responsibilities even so near as the reports
    that Mr. West has submitted to us. And yet because we don't
    like lawyers or we don't like the Legal Services Corporation,
    we are out there micromanaging the business of this Board in a
    way that I think is inappropriate.
        Mr. Cannon. Will the gentleman yield?
        Mr. Watt. Yes, I will, and I will ask for another minute so
    you can respond to that.
        Mr. Cannon. The point the gentleman is making is very, very
    important. The point is that we should not be micromanaging
    Legal Services Corporation and no Board member should go look
    over the secretary's shoulder. That said, if a Board member
    doesn't have the ability to look over a secretary's shoulder,
    if he doesn't have the ability to get to books, if he doesn't
    have the ability to look at whatever information he feels is
    important so that his corporation or in this case this Legal
    Services Corporation can operate in a reasonable fashion; that
    is, if he can't take on the responsibility that he actually
    holds to effectively perform his duties, then he is not going
    to work very well.
        We don't have shareholders of LSC. We have taxpayers and
    our role is to make sure the Board is performing its function.
    We have had very serious discussions about what we are going to
    do with the building that you have purchased or worked with
    Friends of Legal Services to purchase. We have some fundamental
    problems here where I think there is a true breakdown of
    understanding by Board members, and I think this was the deal
    you were talking about, Mr. Watt. There are some--I believe
    that what I see here are members of the Board who are getting
    the perks of an operation who are being directed by staff but
    who are not using the Inspector General for the purpose that he
    exists, which is to protect the Board from allegations of
    impropriety or for overseeing an operation that there is
    impropriety going on.
        That is what I think this hearing is about. It is oversight
    of those things, and the issue about the reports that the
    Inspector General, Mr. West, has issued are not so much on
    point. It is the reaction of the Board to those reports that I
    think is significant here.
        Mr. Watt. Mr. Chairman, I yield back the balance of think
    time if I have any.
        Mr. Cannon. The gentlemen yields back. I doubt he has any.
    But the Chair appreciates his indulgence and the Chair
    recognizes the gentleman from Arizona for 5 minutes.
        Mr. Franks. Mr. Chairman, I am learning a great deal here.
    Could you entertain--could I yield additional time to you, sir?
        Mr. Cannon. I have a number of other questions if you don't
    have any.
        Mr. Franks. I would be glad to yield.
        Mr. Cannon. I'll take your time and probably my time again.
        We have distracted somewhat Mr. West.
        Mr. Williams, you have heard the discussions between the
    Ranking Member and me. Do you have comments on the issue?
        Mr. Williams. Broadly speaking, the job of the Inspector
    General is a difficult one. I've investigated the heads of most
    of the departments and agencies that I have been a member of.
    With regard to Boards, they are normally evenly split. And it
    isn't unusual to vote along partisan lines. So a super majority
    is something that I take comfort in. And many times in the
    investigations that I conduct, members of the commission and
    now the Board are a party in interest and sometimes they are
    even the subject of the investigation.
        I think people have a natural tendency to want to tell the
    truth, but they ought not to have to choose between telling the
    truth and feeding their families.
        What seems to have occurred here, the timing between the
    investigation and discussions regarding firing Mr. West are
    very instructive and very damning and very serious. And I
    consider this a very serious matter, and I think that any
    provision that will provide levels of security for Mr. West and
    speaking the truth to powerful figures is welcome and is
    needed.
        Mr. Cannon. So what you are saying as opposed to what Mr.
    Watt is saying is that this is an important investigation and
    needs--or this bill and what we are doing here is not
    micromanaging but creating a context that makes sense?
        Mr. Williams. I think if you don't protect people speaking
    the truth, there are going to be a lot of people that won't
    tell you the truth. This was done at your request, I
    understand. It is the duty of the Committee to join in an
    effort to make sure that retaliation doesn't occur. In the case
    of TVA and HUD and other instances where this sort of thing
    occurred, legislation followed and strong Congressional action
    followed, and I think it is appropriate in this instance as
    well if this is what it looks like.
        Mr. Cannon. Mr. West.
        Mr. West. Well, I would like to follow up with one example
    of, I think, sort of what is going on and again, as I said, I
    am trying to keep this off any kind of, you know, personal
    dispute or whatever. But back a year and a half ago your
    Subcommittee asked me to look into the lease and I issued a
    report, as you noted in your comments, Mr. Chairman, that the--
    my lease report was rejected subsequently to that. Your
    Subcommittee held an independent hearing, arrived at basically
    the same conclusions that I did regarding the building in the
    House appropriations.
        Mr. Cannon. In fairness, there was no testimony that
    contradicted your position. The amazing thing was that having
    said that, it all turned on whether or not there was a conflict
    of interest. Someone I believe on the Board of LSC resigned
    because of the obvious conflict of interest. Others wanted to
    pretend the conflict didn't exist. We bent over backwards to
    try to construct a context where that would be straightened
    out, and I think we are of one mind on that issue. And yet we
    are here without that fundamental conflict having been resolved
    and we created I think the--I think we bent over backward to
    create a context where we could solve that problem about using
    those and others.
        Mr. West. I had the privilege of, you know, or happened to
    look and be able to read some closed transcripts of the Board's
    performance review of me which, by the way, I am entitled to
    under the law. So it--I got them in the course of investigation
    by--I am also entitled to them on a case involving the firing
    of the first LSC IG back in 1991, I believe.
        And what I found was that there is still disagreement over
    my issuing this report on the lease, notwithstanding the fact
    that the House, in the House report on appropriations, which
    was adopted by the conference report in which the conferees
    told the LSC that they needed to negotiate a more reasonable
    rent rate and try to lessen the amount of space they need.
        So I'm sort of in a situation where I provided a report to
    the Congress. I believe I did, on my professional standards
    using independent outside appraisers who were referred to me by
    the General Services Administration and the facilities
    department Postal Service, I issued the report. Congress agreed
    with me. And I hear from the Board that my performance is bad
    because they disagree with how this lease report was issued.
        I then find that I have been criticized because I didn't
    respond to why a particular appraisal--lender's appraisal--was
    included as part of my lease report. I hadn't seen it. I was
    told you didn't respond to our concerns, and I issued two
    reports regarding why I didn't consider it relevant.
        And I don't know what to say when I am being criticized for
    things that I in fact have done, that I have been told that I
    haven't done, and I have done it. I have done things that
    Congress has agreed with and the Board tends to still disagree
    with my findings as well as Congress' findings.
        Mr. Cannon. The time of the gentleman from Arizona has
    expired.
        The gentleman recognizes himself for 5 minutes. Maybe this
    is a good time to shift to Mr. Strickland. You have heard the
    discussion here about whether this is relevant or important or
    micromanaging. And yet you are the chairman. You are concerned
    about your reputation. I know this is a matter of great
    importance to you. We have talked about the difficulties that
    the building represents.
        Do you recognize the problem of a Board that rejects a
    general counsel--an inspector general, instead of using that
    inspector general to help protect the Board, its chairman and
    members and their reputations?
        Mr. Strickland. It is correct that the Board disagreed with
    the findings in that report. By way of follow-up to that, Mr.
    Chairman, we have taken two approaches to resolve that problem.
    One is----
        Mr. Cannon. Mr. Strickland, would you mind focusing on the
    question, which is, as the chairman of the Board, aren't you
    concerned that you have someone who really is independent on
    the outside, who acts as an agent to protect you and your
    reputation and the reputation of the Board?
        Mr. Strickland. We appreciate the role of the inspector
    general and we are working very hard to gain a better
    understanding of the proper role of an IG. As I said a moment
    ago in my opening statement, none of us came to the Board with
    any experience with the inspector generals. It is a foreign
    concept to us.
        Mr. Cannon. Have you served on boards of corporations?
        Mr. Strickland. No publicly traded corporations, no, sir.
    Nonprofits.
        Mr. Cannon. Have any of your members that you know of
    served on boards of publicly traded corporations?
        Mr. Strickland. Not to my knowledge.
        Mr. Cannon. Well, I certainly hope to the degree you have
    input, and we certainly will take the initiative to bring
    people on the Board--actually, I do know Tom Fuentes is on the
    board of at least one--a publishing company.
        Mr. Strickland. That is correct. I don't know that that is
    public, but he is on that board.
        Mr. Cannon. That is not a public corporation, I don't
    think. Mr. Strickland, what I think we need here is a
    recognition of the role of a Board member in the context of the
    terrific legal responsibilities and burdens that come with
    being on a Board. Now, that is a little different when you are
    on a public board with funding--taxpayer funding. But I think
    that makes our role overseeing it a little more poignant than
    perhaps other activities. But you know, do you have lawyers on
    the Board who are corporate lawyers?
        Mr. Strickland. Yes.
        Mr. Cannon. And who serve as general counsels for public or
    nonpublic----
        Mr. Strickland. I presume they do provide general counsel
    advice, yes. And I do myself for some clients.
        Mr. Cannon. I apologize. I interrupted you and you had
    something else to say.
        Mr. Strickland. I was going to say with respect to the
    lease, it is true we had a disagreement with the lease report.
    It is also true, I think, that I don't know anyone in the room
    would say inspectors general are infallible. So I think it is
    our responsibility to speak up if we have a disagreement, and
    we have done that.
        Most of our disagreements with Mr. West have had to do with
    style rather than substance, and omissions of things that we
    thought were material to his reports. With respect to the
    lease, we attempted through the appropriations process to get
    some language that would help us on the ultimate ownership of
    the building. That process did not work. I wrote you a letter a
    few months ago suggesting another alternative for protecting
    LSC's ultimate ownership in the building, and I would like to
    explore that with you on another occasion, rather than in
    detail. But we have had not had a chance to discuss that letter
    since it was sent.
        But it was a proposal that would provide for a
    supermajority vote to Friends of LSC, who is our landlord, and
    would also add some representatives of LSC to the Friends
    board, and impose the supermajority requirement before that
    board could take any action that would be detrimental to LSC.
    We thought that was the only safety valve we could think of
    that would have additional protection to the LSC's ultimate
    ownership of the building.
        Mr. Cannon. My time is about to expire. But let me just
    ask, I have been personally involved in the issue of the
    building, and I talked to the Chairman of the Subcommittee, Mr.
    Wolf, who has a long association with LSC. And I thought we
    were making progress there. What happened between you and the
    Chairman of the Subcommittee that I'm not aware of that
    derailed ownership of the building by LSC?
        Mr. Strickland. I am not sufficiently conversant on
    appropriations language to give you an intelligent answer to
    that.
        Mr. Cannon. Were you involved in those discussions or was
    it someone else on your staff?
        Mr. Strickland. Someone else on the staff. And the advice
    given to me was----
        Mr. Cannon. Mr. Polgar raised his hand.
        Mr. Strickland. Yes, I believe he is the one who had those
    discussions, and I can't give you an intelligent answer to
    that, other than my understanding is that we were not able to
    work out any appropriations language that would help us in that
    regard, although we made the effort.
        Mr. Cannon. Thank you. I see my time has expired Mr. Watt,
    are you interested in another round?
        Mr. Watt. Mr. Chairman, I think I will pass.
        Mr. Cannon. Mr. Franks.
        Mr. Franks. Mr. Chairman, do you need any additional time?
        Mr. Cannon. I do.
        Mr. Franks. Mr. Chairman, I would be glad to give it to
    you, sir.
        Mr. Cannon. I thank the gentleman for yielding.
        Mr. Watt. If I had known you need additional time, I would
    have been happy to yield to you also. I just want the record to
    show that.
        Mr. Cannon. I apologize for keeping the gentleman here
    longer, but I would really like to work through some of these
    questions.
        Mr. West, I have heard from Mr. Strickland that the
    situation at LSC is no different from the situation at other
    entities with inspectors general appointed by the head of the
    agency. Do you agree with that?
        Mr. West. I do not completely agree with that. I'll give
    you an example. At the Postal Service--and it is actually
    something I have mentioned to Mr. Strickland some time ago--but
    the Postal Service, the part-time governors have their own
    employee that works directly for the governors, who is not part
    of the management and does a lot of the day-to-day work. That
    is different than LSC where the Board relies on management to
    provide responses to it. Management prepared much of its
    response in the lease report. Management provides responses for
    its response to my reports and the semiannual reports to
    Congress and other things. So there is a tremendous reliance
    that the Board has on the very management that I am auditing
    and investigating to prepare information, provide information
    for it.
        That is very different from the Postal Service--Mr.
    Williams could explain in greater detail--how the governors
    have their own employee whose only obligation is to be--to work
    for the governors. These employees then deal with both the
    inspector general and the postmaster general. And they're able
    to synthesize the important issues that need to go up to the
    governors. So it is a very different model.
        Mr. Cannon. Mr. Strickland has suggested that the
    differences between you and the Board are differences of style.
    Is it a matter of style? Is it a matter of personality? Or is
    there something institutional here that is difficult?
        Mr. West. It must be institutional, because the style that
    he is referring to--the IG reports that I issue are no
    different than the IG reports I issued and was involved in
    issuing when I was at Department of Labor, at the CIA, and the
    Postal Service. They are no more, quote, inflammatory, unquote,
    and no more prosecutorial.
        So I think I am doing the job that Congress put me in to do
    that the IG Act says I should do. I am doing the same job that
    IGs are doing throughout Government. So I don't think that the
    problem is with the IG.
        And looking at Mr. Quatrevaux's notes from the past, it was
    the same thing. I think there is a--there is something within
    the history--the way that the LSC is created, its culture or
    something, that is creating an aversion to having an
    independent IG who can report directly to Congress. And I think
    it is just different. I have not done a full analysis of it but
    that is my conclusion.
        Mr. Cannon. Thank you.
        Mr. Williams, based on your considerable experience in the
    inspector general community and your understanding of what is
    happening at LSC, do you believe that H.R. 6101 is an
    appropriate measure? And do you have any other recommendations?
        Mr. Williams. As I said, the provision in the Postal
    Reorganization Act is one that I find comforting. It does--the
    provision would assure that the decision to dismiss the
    inspector general be taken very seriously and not be taken in
    the heat of the moment and that it not be a partisan decision.
        And I think that in a job such as the inspector general,
    where you do speak frankly and you do conduct investigations
    that can be embarrassing or that can even involve criminal
    matters concerning the Board in this case, that that kind of--
    that kind of considered judgment--it becomes very important.
        Mr. Cannon. And do you think this bill--two questions since
    my time is about to expire--this bill will help in that regard?
    And, secondly, it is apparent the LSC is having difficulty
    recognizing the appropriate role of the IG. I understand you
    addressed the Board on this topic. Did you give the Board any
    advice at that time and is it still relevant today? Do you have
    any advice to the Board in coming to terms with the concept?
        Mr. Williams. Actually, before Mr. West, Mr. Quatrevaux did
    ask me to come and speak to that Board as well. And it was the
    same issue. And on both occasions with both boards, I attempted
    to explain the importance of independence and being able to
    speak honestly about the things that you found, and that the
    purpose of the inspector general was to investigate waste and
    fraud and abuse and assure integrity within the workforce of
    the department.
        I am not sure about the culture. I'm not close enough to
    it. But it is very unusual for me to have been asked to speak
    to both boards. Something--something inside that apparatus is
    causing a level of disrespect to be directed toward the fact-
    finders that can't be healthy.
        Mr. Cannon. I have been asking Mr. Strickland about this.
    There does seem to be something missing. Is that just perhaps a
    lack of experience with the responsibility that the Board has
    in the case of LSC to taxpayers? Or is something else----
        Mr. Watt. Chairman, I reclaim my time and yield you my 5
    minutes.
        Mr. Cannon. The time has expired. I thank the gentleman.
    The gentleman is recognized for 5 minutes and yields to the
    Chair. Thank you.
        Mr. Williams. It could be that it is very difficult for
    people that have a very brief, part-time presence in the city
    to grasp the principle of this kind of hard-hitting reporting
    that was required of the inspector general. But it came about
    as a result of abuse within the Government and it was intended
    to be a very strong tool. And it could be that there is a
    difficult learning curve. And as Mr. West said, apparently
    there is not a permanent staff there to help the Board with the
    learning curve.
        Mr. Cannon. Thank you, Mr. Williams.
        Mr. Strickland, I know Mr. Watt needs to leave, but I have
    many questions, although we have made some serious progress, I
    believe, here.
        In the Associated Press this morning, Mr. Polgar, who is
    the LSC Director of Government Relations and Public Affairs
    said: The board of directors never threatened to fire him and
    had no plans to take action in April when the lawmakers'
    warning letter arrived.
        However, at your Board meeting in January, Board members
    said various things. Do you recall that discussion of Mr.
    West's activity in that Board meeting? It would have been, I
    think, in January.
        Mr. Strickland. I do recall that.
        Mr. Cannon. Is what Mr. Polgar said consistent, do you
    believe, with what happened at that meeting?
        Mr. Strickland. It's important to note, Mr. Chairman, that
    the discussion in January 2006 pertained to Mr. West's
    performance during 2005, and has nothing whatsoever to do with
    the current investigation, which he undertook in March or April
    of 2006. It was past history that was being discussed. And a
    number of Board members at that meeting indicated
    dissatisfaction with Mr. West's report--reports--and found his
    work product shoddy, to quote one Board member.
        Mr. Cannon. And what was that work product? Was that the
    Georgetown building?
        Mr. Strickland. It was one of his reports; I don't remember
    which one.
        Mr. Cannon. You don't recall a discussion about the
    Georgetown building in particular?
        Mr. Strickland. I can't connect that description to a
    particular report. But the point I'm making is, it was a
    discussion of his previous work history and not having anything
    to do with the investigation that he has been doing this year.
        Mr. Cannon. Mr. Polgar referenced April. That is this last
    April, the letter that we sent. And I believe that the meeting
    that we are talking about is the meeting in January of this
    year.
        Mr. Strickland. Right. The meeting in January----
        Mr. Cannon. And that may have been past material, because
    we had had the Georgetown material already done. But things
    were said like he doesn't belong as inspector general of this
    organization. This could be interpreted as retaliation or an
    effort to undermine congressional restrictions. He has got to
    shape up or we will ship him out. I think he should be given
    notice; the only problem I have is how do we go about it.
        Don't those things suggest that the Board was actually
    going to fire Mr. West? And that was prior to the April letter
    that Mr. Polgar referred to?
        Mr. Strickland. I can't quote from the transcript. I don't
    have it in front of me. But there was certainly some discussion
    at that meeting. There was no vote taken and no vote taken
    since.
        Mr. Cannon. That is true. No vote was taken because you
    were anticipating an appropriations cycle.
        Mr. Watt. Mr. Chairman, since this is my time, let me
    reclaim long enough to suggest that all of those things you
    read there suggest responsible inquiries that Board members
    would be making about any employee of theirs.
        Mr. Cannon. Will the gentleman yield? These were not
    inquiries. These were conclusions. And they are conclusions----
        Mr. Watt. You say that they are conclusions, but no action
    was taken by the Board. So they couldn't have been conclusions
    that resulted in Mr. West's termination. Mr. West is still
    sitting here today.
        So you know, the fact that issues get raised in a Board
    meeting, that's what boards are supposed to do. They have an
    obligation, according to a legal opinion which Mr. Strickland
    has referred to, to evaluate this man's performance.
        Now, I agree that they ought not be retaliating against
    him. They ought not be undermining the purposes for which an
    inspector general is employed. But it certainly wasn't related
    to an investigation that took place in 2006, if the
    conversation was taking place in January of 2006. So we are off
    on a far--far-out fishing expedition.
        Mr. Cannon. The gentleman's time has expired.
        Mr. Watt. I ask for one additional minute and yield it to
    the Chairman. That's what I took from him and I give it back.
        Mr. Cannon. I thank the gentleman. If the gentleman would
    like to continue for a minute, that is appropriate. I thank the
    gentleman.
        Mr. Strickland, I think we've just miss mixed up a fact
    here, if you could get that straight for us. This is January of
    2006. We sent the letter in April, but the Board meeting of
    January 2006 was not about vague stuff that happened in the
    past. It is all the stuff that related to the Georgetown office
    and other criticisms that Mr. West directed to the Board for
    the Board's consideration. And it was in response to that, that
    I believe these conclusory statements were made at your Board
    meeting.
        Do you recall those statements? Am I correct about the
    timing, first of all?
        Mr. Strickland. Yes, I believe the discussion was in
    January 2006, and Professor BeVier, who chairs our performance
    reviews committee, reminded me that we believe that discussion
    occurred during a meeting of the performance reviews committee.
    And it was a discussion about what are our alternatives here.
    Can we or should we review the inspector general's performance
    and so on?
        So, ended up really putting that on a shelf and not
    delivering any feedback as such to Mr. West until much later in
    the year. And in the interim, of course, as he said in his
    testimony, he exercised his authority to obtain a copy of the
    closed-session transcript at which his performance was
    discussed.
        Mr. Cannon. You are saying that is the closed-session
    transcript of the performance evaluation subcommittee of the
    Board?
        Mr. Strickland. Correct.
        Mr. Cannon. Mr. West, you obtained a transcript. Were you
    thinking that was actually a Board meeting? Do you know?
        Mr. West. It was a performance review committee meeting.
        Mr. Cannon. Okay.
        Mr. Strickland. Mr. Chairman, may I make one other point? I
    don't want to have the record close today without making these
    points. That----
        Mr. Cannon. The Chair recognizes himself for 5 minutes and
    we will go another round of questioning.
        Mr. Watt. Mr. Chairman, if I can just interrupt you here
    briefly. I have another commitment that I must go to because
    I'm presiding over the meeting. So it is not--I don't want to
    be disrespectful. I want the Chairman to go as long as he wants
    to with as many rounds as the Chairman wants to, but I can't be
    here.
        Mr. Cannon. We shall operate with decorum.
        Mr. Watt. And since I think we are micromanaging, neither
    do I need to be here. I don't want to micromanage, Mr.
    Chairman. That is very sure.
        Mr. Cannon. I thank the gentleman. I am sorry?
        Mr. Watt. Could I interrupt long enough to ask unanimous
    consent to put the letter from--the memorandum to the board of
    directors from Covington and Burling in the record.
        Mr. Cannon. Without objection, so ordered.
        [The information referred to is available in the Appendix.]
        Mr. Cannon. If we could just take one more moment, Mr.
    Watt, I'd like to make the following motion: The unfinished
    business before the Subcommittee is the adjournment of the
    Subcommittee's June 28, 2005 hearing, which was recessed
    subject to the call of the Chair. Without objection, the
    aforementioned hearing is so adjourned. Without objection, so
    ordered. We left it open.
        I thank the gentleman for his indulgence and apologize for
    the time it has taken. I think that was adjourning the hearing
    we had before, so that record closes it out.
        Mr. Strickland, you were about to make a point. I apologize
    for that interruption.
        Mr. Strickland. Thank you, Mr. Chairman. I wanted to
    emphasize to the Committee that we have been working for months
    to improve the relationship between the agency and inspector
    general. We think we have made considerable progress in that
    regard. And the fact that we take this matter seriously, I
    think, is indicated by the presence of two of our Board members
    today, one of whom has traveled from Seattle to be present. I
    have worked on this on a personal level. I said in my opening
    statement that Professor BeVier and I have made at least two
    trips to Washington to meet directly with the inspector general
    and his staff, and then with management, with Mrs. Barnett and
    her staff, and then jointly with the entire group. And we
    thought those were productive meetings and we continue to--we
    plan to continue those efforts in the future.
        And I would point out also that as recently as last Friday
    in the preparation of the draft of the congressional
    investigation report which has now been released, we had a
    telephone conference discussion about some of the things that
    were in the report, and a good exchange between management and
    the inspector general and involvement of the Board relative to
    some of the factual assertions in the report that needed some
    revision. And the Inspector General's Office accepted those
    recommendations in large measure, and I think the report that
    was released is an improved product as a result of that.
        So I say all of that to emphasize that we have made a
    considerable investment in time and effort to work on that
    relationship and I am pleased to report, from my perspective,
    considerable progress in that regard.
        Mr. Cannon. We were talking with some particularity here
    about Mr. Polgar's statement to the press that the board of
    directors never threatened to fire him and had no plans to take
    action in April when the lawmakers' warning letter arrived. And
    you have made the distinction between the performance review
    and also--and the board of directors. But at the board of
    directors meeting, it appears that it was Ms. BeVier who is
    speaking and she speaks at some length, but the point of that
    is letting Mr. West go. She had reporting back, but she is very
    clear about letting him go and getting counsel to look at it
    and things like that.
        Is that not contrary to what Mr. Polgar had said to the
    press?
        Mr. Strickland. I need to ask you to put that in context. I
    have been talking about the January 2006 Board meeting and I
    don't understand whether you are talking about another----
        Mr. Cannon. You had a performance review meeting and then
    you had a Board meeting.
        Mr. Strickland. Yes.
        Mr. Cannon. And apparently Ms. BeVier reported to the Board
    about the review meeting, the performance review meeting. And
    in that report, she was very clear that she was suggesting that
    this Board fire Mr. West; and that that would be, it seems to
    me, clearly contradictory to what Mr. Polgar told the press.
        Mr. Strickland. I can't give you a good answer to that, Mr.
    Chairman. The context is confusing. The way you posited the
    question, I simply can't deal with it.
        Mr. Cannon. I mean, is the question confusing--in which
    case I will recast it. Or is the history confusing?
        Mr. Strickland. Perhaps a little of both. I don't know
    whether you are talking about Professor BeVier's presentation
    to the January 2006 Board meeting, and then we all of a sudden
    jump to April when we had another Board meeting.
        Mr. Cannon. You had a letter from us and that is the April
    date.
        Mr. Strickland. Yes, I don't recall any action. I have not
    reviewed the transcripts. I don't recall any action at the
    April Board meeting to--with regard----
        Mr. Cannon. Well, you had two meetings in January: the
    meeting of the performance review board and a meeting of the
    full Board.
        Mr. Strickland. Correct.
        Mr. Cannon. In the performance review board these quotes
    that I gave you were apparently made, or something like that.
    In the full Board we had a conclusory presentation, by Ms.
    BeVier it appears, where she was saying that the Board needed
    to fire Mr. West. That is clearly in contradiction to what Mr.
    Polgar told the press if that is the case, unless I am missing
    something.
        Mr. Strickland. Ms. BeVier is here. She may clear the
    record on that.
        Mr. Cannon. Perhaps she can explain to you and we will go
    to Mr. West and just ask if you were aware of these things, did
    you find that intimidating?
        Mr. West. Mr. Chairman, I was not aware of that at the time
    because it was a closed Board transcript, I had not seen it. I
    had been--you know, I heard sort of rumors. I had nothing
    specific in information because I didn't see the closed Board
    transcripts until sometime--I think it was probably June.
        I would like to clear up one other thing in terms of what
    is different about the Legal Services IG and other IGs who
    serve on boards. And that is something I addressed earlier,
    which is I am an ``at will'' employee. I can be fired without
    cause, without a hearing. And that is true of any LSC IG. That
    is different than most of all the other Federal IGs who are
    hired by their agencies. They have Merit System Protection
    Board rights and they have the rights of Federal employees. I
    don't have any of those rights, so it puts the IG at Legal
    Services Corporation in a much more tenuous position.
        And another thing I would like to make clear--I said this
    in my larger statement--this is somewhat uncomfortable to
    support a bill like this because, as Mr. Watt said, it could
    appear to be self-serving. But I am doing this for the
    institution of the Office of Inspector General, not for myself.
    I don't know how much longer I will be in the job but I am
    concerned about the long-term prospects, that if I leave, the
    next IG is going to go through the same thing that I went
    through and Mr. Quatrevaux went through.
        Mr. Cannon. That is the IG at LSC, and this bill actually
    would tend to have a tendency to solve that problem, would it
    not?
        Mr. West. That's correct Mr. Chairman.
        Mr. Cannon. Has a performance review ever been completed by
    the Board or by its subgroup?
        Mr. West. As far as I know, there is--it has been told to
    me that they are still discussing it. It is a little
    disconcerting about this Covington and Burling memo, because I
    was told that I had an opportunity to respond to the memo
    before it was going to be considered; yet I have been told it
    is a dispositive memo.
        I would also like to point out, Mr. Chairman, that I think
    the memo itself is flawed. There is--and I am really surprised
    that a law firm such as Covington and Burling would do this--
    they make an assertion in one of the footnotes that the
    Sarbanes-Oxley Act does not apply to nonprofits, and they make
    a point of trying to ridicule my seasoned attorney who put this
    together. However, if you go to the ABA Web site and you read
    the Sarbanes-Oxley Act, you realize there are two provisions of
    the Sarbanes-Oxley Act that do in fact apply to nonprofit
    corporations. So I would suggest that the corporation didn't
    get the value of the money they paid for this opinion, if it is
    flawed.
        Mr. Cannon. I understand it is like $22,000?
        Mr. West. I have heard it is somewhere in that ballpark.
        Mr. Cannon. Mr. Strickland, have you clarified the timing
    here?
        Mr. Strickland. I did have a chance to speak to Professor
    BeVier, and her recollection is that in January, both in the
    performance review committee and at the Board meeting, in
    summary form, we were considering alternatives, we were
    considering fairness, and we were deciding, I think, to seek
    advice from outside counsel in terms of whether or not the
    Board should even do a performance review of the inspector
    general going forward. It is still an open question. There is a
    raging debate about it.
        Mr. Cannon. My question to you is did Mr. Polgar tell the
    truth when he said that the Board had no plans to take action
    in April? Had no--prior to April. In other words had the Board
    threatened Mr. West or not?
        Mr. Strickland. I don't think the Board had threatened Mr.
    West. I take exception to that characterization.
        Mr. Cannon. What would you call it?
        Mr. Strickland. I would call it a discussion of
    alternatives.
        Mr. Cannon. This kind of discussion, It is very long and
    unfortunately I don't think we can read it all. We talk about
    conflicts of interest, breach of fiduciary responsibilities.
    These are conclusions about Mr. West: ``So that to have that
    undermined by allegations that are deemed--that we regard as
    unwarranted, and that are at least, presented in an
    inflammatory way, . . . seems to be not in the Corporation's
    best interest. . . .
        ``We plan to have outside counsel review that with an eye
    to the possibility, and I stress that, I really stress that we
    are only sort of thinking about the possible worst-case
    scenario, which would be possibly deciding that we had to let
    Kirt go, and we reduce that to writing, give it to counsel.''
        And so you are going to counsel to talk whether or not--
    there is a lot of equivocating language in there, but you are
    talking about firing the guy and getting counsel to cover you
    when you fire him; have the counsels look at it so as to make
    sure that what we have done is careful enough. So we have a
    conclusion. We are just looking to counsel to ratify it.
        In the context of that, wasn't Mr. Polgar's statement to
    the press misleading?
        Mr. Strickland. I can't comment on Mr. Polgar's statement.
    I didn't make it and I don't care to comment on that, and I
    think the transcript speaks for itself as to what it says.
        Mr. Cannon. I understand the Board has not completed a
    performance review of the IG, yet you told Subcommittee staff
    last week that a review had been completed last year. Did the
    Board conduct a review? Is it complete?
        Mr. Strickland. I would say it is in some stage of
    completion. The continuing debate about whether or not it is
    appropriate for the Board of LSC to review the inspector
    general is ongoing. We went through a process in the fall of
    2005. We reduced that to writing. We elected not to present
    that writing to Mr. West. And that's my best recollection of
    it.
        Mr. Cannon. So when you say then that it was reduced to
    writing, that means that what you told staff the other day--
    that you completed it--means that you completed it, and now you
    are saying it is not completed in the sense that you haven't
    given it to Mr. West?
        Mr. Strickland. Perhaps that is more accurate.
        Mr. Cannon. What is the conclusion of that review?
        Mr. Strickland. I don't recall the specifics of it. Ms.
    BeVier wrote it and I don't think it is published anywhere. I
    think it is in her own notes. I don't have those notes.
        Mr. Cannon. Are you aware of any instance in LSC history
    when the LSC president has refused to attend a hearing when her
    presence was requested?
        Mr. Strickland. Don't have the history on that, Mr.
    Chairman.
        Mr. Cannon. And during a recent bipartisan briefing
    including House and Senate staff, I understand you emphasized
    that you are chairman of a part-time board, unfamiliar with the
    IG concept. Moreover, when speaking about your relations
    between the IG and the LSC, you said emphatically: ``All I know
    is what I am told.''
        Given this admission, why do you think it is inappropriate
    for President Barnett to be here today, given the fact that you
    lacked understanding and that she is the one who apparently
    tells you what you're told?
        Mr. Strickland. I don't understand that question, Mr.
    Chairman, I'm sorry.
        Mr. Cannon. Ms. Barnett is not here today, in part because
    you counseled her that her appearance is not appropriate. You
    said in the past that the only thing you know about is what she
    tells you essentially, because you only know what you are told.
        Why is it that she is not here to answer some of these
    questions that you are vague on?
        Mr. Strickland. My understanding of her reason for not
    being here today is a level of discomfort relative to the fact
    that on its face the report released by the inspector general
    states that certain matters relative to Ms. Barnett are still
    open matters under investigation. And she--and, again, my
    understanding--felt that it would be inappropriate for her to
    testify while an investigation regarding her conduct is still
    ongoing.
        Mr. Cannon. Have members of the Board had a discussion
    about the strategy of dealing with this Committee or firing Mr.
    West or dealing with Congress or appropriations generally in
    the context of the November elections?
        Mr. Strickland. No.
        Mr. Cannon. The Board has never discussed the possibility
    of a change in the control of the House of Representatives as
    it relates to your strategy at LSC?
        Mr. Strickland. Not that I recall. If the Chairman is
    referring to something specific, I'll be glad to try to comment
    on it, but that is my best recollection.
        Mr. Cannon. I see my time has expired. Mr. Gohmert, do you
    seek recognition?
        Mr. Gohmert. Thank you, Mr. Chairman. I appreciate the
    opportunity to be part of the hearing. And it breaks my heart
    that anybody would have a level of discomfort if they were to
    come here to this hearing.
        But, Mr. Strickland, when you were having trouble
    understanding the Chairman's question, as a former judge and
    chief justice, let me explain my perspective on why it would
    have been nice to have the president here. I mean, you're the
    chairman of the board. I mean, somebody might make an analogy
    to the Board being a little like the grand jury, and you have
    the president that actually works there full time, comes and
    makes presentations. You have got to rely on them. You're
    counting on what they have to say. You don't get necessarily
    first person or direct evidence, you get hearsay through the
    president.
        And so since the president appears to gather evidence, and
    we like to hear evidence here, we would prefer to have second-
    hand hearsay from the president rather than third or fourth
    hearsay from people that the president tells stuff and then
    sends out as a barrier between him or her and this hearing.
        So it is just nice to have direct evidence or as close to
    direct as we can get. And I hope people here understand our
    concerns. My understanding is we spend about $330 million from
    Congress each year on the LSC. And having known people who
    tried to assist the poor, the oppressed, the downtrodden, often
    pro bono, working for basically free but being subsidized
    somewhat by the LSC to keep them out there in the field,
    helping the downtrodden and oppressed and the poor, it is kind
    of tough when you read that the Board of the LSC, I guess,
    spent over $8,700 for hotel food at its January 2006 Board
    hearing. And, see, it would be nice to know if any of the poor,
    the downtrodden, the oppressed were invited to enjoy that food
    with the Board of the LSC, or was that so that they could fully
    appreciate the plight of the poor, the downtrodden, and the
    oppressed?
        LSC apparently, according to the report, spent over
    $100,000 since August of 2000 on coffee, holiday parties,
    picnics, working lunches, and business entertainment, and even
    thought the LSC doesn't have to follow the Federal spending
    practices. It is kind of nice for a group that is trying to
    help the poor, the oppressed, and the downtrodden if they don't
    look overly extravagant or twice as extravagant as other
    Federal agencies.
        But to spend over a million in the last 10 years on
    settlement agreements with 27 departing employees tells me that
    there was a great deal of concern about maybe the mistreating
    of the employees who were assisting the poor and the
    downtrodden and the oppressed.
        So I have concerns, again, when I read these kind of
    reports and then I see that the chairman of the board, rather
    than the one with closer evidence, closer to being direct and
    one step removed in the hearsay process, has to come and stand
    as a shield. And I'm sure you may disagree with that
    terminology, but if I put my judge hat back on, that is sure
    the way it looks from here. You got sent out as a shield from
    somebody who has been running things.
        And it does cause me great concern when the inspector
    general is in a situation of, on the one hand, rendering a
    report about problems within any group or agency or something
    like the LSC, and then, on the other hand, can be fired if he
    reports things that are unpleasant to the Board. Boy, you talk
    about a catch-22.
        Mr. West, you are not in a very enviable position. I don't
    know a lot of people that would want to be in your shoes,
    having to report sometimes negatively on the people that are
    out there and have the right to fire you without cause. Is that
    right; without cause?
        Mr. West. I am an ``at will'' employee so it can be without
    cause.
        Mr. Gohmert. Obviously, if you go issuing reports talking
    about how much they overspend at their meetings and then when
    the president says, well they need to do these meetings at a
    hotel because their conference room is too small. And then, as
    I understand it, you issue a statement saying that actually the
    headquarters meeting room is slightly larger than the rooms
    used at the upscale hotel, that may give them cause to want you
    fired. You're not being very helpful to them.
        So anyway I appreciate the opportunity to have this
    hearing, to hear from the folks. I have not been out here the
    entire time. I have been listening from the back room for much
    of the hearing. And it has been quite informative, but not
    informative enough.
        And you know, I also see analogies to the boards of
    directors of banks back in the eighties back in Texas, who were
    only told what they needed to know by the president. And while
    the ship was sinking, they had no idea. They had no idea. They
    were just given information that everything is rosy, and have a
    good Board meeting. And never really got to the basics.
        So Mr. West, let me just ask you, what do you think would
    give an inspector general over the LSC a comfort level to do
    the job very effectively without worrying about more arrows
    coming from behind than from the front?
        Mr. West. I think the strongest protection that could be
    given is not something that Mr. Cannon has proposed, and that
    is to make the IG a presidential appointee, because then it
    would require a political process to remove the IG, which
    happens with those who are presidentially appointed. And I'll
    give you an example.
        Mr. Gohmert. Of course, you understand that making it a
    political process is not the prettiest picture.
        Mr. West. I understand, but let me give you an example. I
    am friends with the IG at the Department of Agriculture. Last
    year----
        Mr. Gohmert. So you do still have some friends.
        Mr. West. And Mr. Williams is my friend, too. She issued a
    report regarding the Department of Agriculture missing catching
    mad cow disease. When the Secretary of Agriculture wanted that
    issue dealt with, he was furious because, you know, she issued
    a report, they missed mad cow disease. That is a big concern to
    the American public. He went out and said he wanted her fired.
    But he couldn't fire her. He said it was outrageous what she
    did, and it was embarrassing to the Department of Agriculture,
    et cetera. It would have required the White House to do that.
    And I can tell you in Washington, that would not have flown.
    There is no way the President is going to fire an IG for
    reporting something about mad cow disease.
        That is what I meant by the political process. It gets in
    there and it is not just within the agency but it goes beyond
    that. Mr. Cannon's bill doesn't go that far. It requires a
    supermajority, not unlike the supermajority that Mr. Strickland
    was proposing for the arrangement with Friends of Legal
    Services with respect to the interests regarding the LSC lease.
    So I think it is a compromise. It is not as strong as the
    Postal Service bill that Mr. Williams has, because that also
    not only has a supermajority but it has a ``for cause''
    provision as well. But I think this would give more than
    adequate security.
        It is my position that given the makeup of the Board, if 9
    out of the 11 would so make that decision, then the IG probably
    needs to go. But there would be some built-in protections, much
    more than there are now.
        Mr. Gohmert. If I could finish by saying this: I know the
    LSC has done great things for people who could not get help any
    other place. And I appreciate those who have spent the time and
    their own resources to try to help people who desperately
    needed it. So don't misunderstand my feelings. I just hate to
    see somebody that is supposed to be helping the poor and the
    oppressed actually taking that money and it not getting to the
    poor and the oppressed or those actually doing the direct help.
    Thank you, Mr. Chairman.
        Mr. Cannon. The gentleman yields back. I ask unanimous
    consent to make the January transcripts of the Minutes of the
    Board and the Performance Review Committee part of today's
    record. And hearing no objection, so ordered.
        [The information referred to is available in the Appendix.]
        Mr. Cannon. Mr. Strickland, your vice chairman publicly
    indicated in a recent interview that the Board had not decided
    whether to fire the IG, along the lines of what Mr. Polgar
    said. That looks like an attempt to communicate something
    outside that is probably inconsistent with the truth.
        Have there been discussions about trying to look in public
    like you are not going to fire Mr. West?
        Mr. Strickland. Not that I recall.
        Mr. Cannon. Could there have been those kinds of
    discussions?
        Mr. Strickland. Beyond what I just said, I don't think I
    can comment further.
        Mr. Cannon. Board members are quoted as saying things like
    the IG should shape up or we will ship him out. As you know,
    Mr. Strickland, the Subcommittee generally accepted the IG's
    findings regarding the LSC lease and held a hearing last year
    on the matter. After that, the IG found more examples of
    profligate spending at the LSC. The IG has just concluded two
    investigations, requested by this Subcommittee, into spending
    practices at LSC and violations of the law by a California
    grantee. Reports on these matters have just been issued.
        In what way did the Board want the IG to shape up?
        Mr. Strickland. Mr. Chairman, I think there is a disconnect
    there between those comments which were made in January 2006
    and today. That was months ago those statements were made. And
    only in the past day or two has--or actually yesterday, I
    guess, the IG report was released in final form. And only a
    matter of a few days before that, the report on CRLA was
    released. So we are in the midst of dealing with those things
    on a current basis. So there is a total disconnect between
    remarks made in January 2006 and what we have to do----
        Mr. Cannon. Does the Board like Mr. West today?
        Mr. Strickland. Like Mr. West?
        Mr. Cannon. And his work?
        Mr. Strickland. I have no personal problems with Mr. West,
    other than some style issues, as I said a moment ago, and an
    occasional substance issue.
        Mr. Cannon. But those are past now? You are referring to
    issues that are now long since past, I take it?
        Mr. Strickland. Yes. And Mr. West and I have had some frank
    discussions on those disagreements.
        Mr. Cannon. Have you resolved those disagreements?
        Mr. Strickland. As I said a moment ago in a statement that
    you allowed me to make, I have invested a considerable amount
    of personal time in improving the working relationship between
    the Board, the management, and the IG. And I hope Mr. West
    would agree that we have had productive discussions. And I
    would commit on my own behalf, and I hope on behalf of the full
    Board, to continue that effort.
        Mr. Cannon. Does that mean we can expect to you argue
    strongly in favor of retaining Mr. West in a Board meeting if
    the issue of his being fired comes up?
        Mr. Strickland. Well, it is a hypothetical question, and I
    can't speak for the whole Board.
        Mr. Cannon. I'm just asking you about you arguing in behalf
    of Mr. West and against firing him.
        Mr. Strickland. I would argue that Mr. West needs to be
    treated fairly and in accordance with the law.
        Mr. Cannon. If there is no further problem that gives you
    reason, so in fairness--I'm not sure where fairness comes in.
    He is ``at will'' as he pointed out. But if this bill doesn't
    pass and the Board wants to consider his removal, unless
    something new happens, will you argue strongly in his support?
        Mr. Strickland. I think that what I said a moment ago is an
    accurate portrayal of how the Board ought to function. The
    Board has the legal responsibility, according to the advice we
    have been given by counsel, that we are supposed to review his
    performance and treat him fairly. I would commit to you that I
    think our Board will do that. I certainly am not going to
    advocate firing Mr. West. That is not high on my agenda.
        Mr. Cannon. But will you advocate to not fire him?
        Mr. Strickland. Under certain circumstances, I might, yes.
        Mr. Cannon. I'm sorry; you might advocate to fire him, or
    not?
        Mr. Strickland. I might advocate not to fire him under
    certain circumstances, yes.
        Mr. Cannon. We have a lot of water under the bridge here.
    And Mr. West has done, I think, a remarkably good job in
    meeting the interests of this Committee. Given that context,
    I'd like to know whether you want to see him fired or whether
    you will advocate to not fire him in the future. And I haven't
    had an answer to that.
        Mr. Strickland. I don't know what circumstances might
    confront us in the future, Mr. Chairman.
        Mr. Cannon. Well, you have--let's move on it.
        Apparently the LSC board does not support H.R. 6101,
    finding it unwise. Other than simply treating LSC differently,
    please describe what you think would be the consequence of
    passing this bill so as to make passage unwise or ill-advised.
    Are you aware of particulars?
        Mr. Strickland. Similar to what I said in my opening
    statement, that during my tenure on the Board for 3\1/2\ years,
    I don't know that we have ever had a full Board of 11 members.
    If we did it was only for a short period of time. We have 10 at
    the moment. The bill would require a vote of 9 out of 10.
        Mr. Cannon. In your testimony you criticize us for not
    offering a rationale for H.R. 6101 which offers protection to
    the LSC IG. I find this more than a bit disingenuous in light
    of the actions by the LSC board to date with respect to the IG.
    We have all seen what the Board discussed. They discussed the
    firing of the IG. They did this at a time when the IG was
    conducting an investigation requested by me and two Senate
    Chairmen into the activities of the LSC and the LSC president.
    How can you not discern the rationale for this legislation?
        Mr. Strickland. I think I need to take exception to part of
    your question in that, unless I have gotten confused on the
    context. The discussion that was contained in the meeting
    transcripts, as I have said several times, was in January 2006,
    before the committees referred this investigation to Mr. West.
    We have not been engaged in discussions about--to my
    knowledge--we have not been engaged in discussions about firing
    Mr. West since this investigation commenced.
        Mr. Cannon. But what we're talking about is my rationale in
    introducing this bill, and your discussion of firing him
    certainly goes to my rationale. You recognize that there is
    reason behind this bill?
        Mr. Strickland. If your rationale dates back to January
    2006, and you're saying it was not proper for us to have a
    discussion about the possibility, then perhaps that is some
    rationale.
        Mr. Cannon. Thank you.
        One final question. Do you perceive a difference between
    the general supervision authorized by the IG Act and the direct
    supervision that is the norm for employer and employee
    relationships? That is, how does the Board's supervision of the
    president, over whom the Board has direct supervision, differ
    from the Board's supervision of the IG, over whom you have
    general supervision? Given this important distinction I am sure
    the Board's processes for evaluating performance differed
    between the two. Would you please describe the approach that
    the Board took?
        Mr. Strickland. Your statement is correct that the Board
    has direct supervision over the president and can set her
    agenda. The Board has dual responsibility, if you will, with
    the Congress in terms of to whom the inspector general reports.
    We cannot set the inspector general's agenda, and we have not
    set his agenda and have no intention of doing so.
        We do have--we believe, as we understand the law and we
    have been advised on the law--that we have an obligation and a
    duty to review his performance as a part of our general
    supervision. But in no way have we set his agenda, nor do we
    intend to do so.
        Mr. Cannon. But my question went to what are the
    differences in how you evaluate his performance as opposed to
    how you evaluate the performance of the president of LSC?
        Mr. Strickland. What we did with respect to that in
    connection with our 2005 review was present to Mr. West a
    series of guidelines that the agency had used historically for
    the review of the inspector--performance review of the
    inspector general, and ask for his input on those guidelines.
    And as I recall it, after receiving his input we used his
    guidelines, which are not the same as we used for the
    president.
        Mr. Cannon. Thank you. We appreciate you all being here.
    This is, I believe, an important issue: how we operate, what
    role the Congress plays. We have fewer investigators now than
    we have historically had, and I personally think we ought to
    have more. But in the absence of that, having an aggressive and
    effective IG I think is very important.
        As I have said in the past to you, Mr. Strickland, and the
    Board, all should understand that I view the role of the
    inspector general as a bulwark of protection for you and your
    reputations.
        Without objection, the witnesses will have 5 days--or the
    panel will have 5 days to make further questions in writing
    available to the panel. And with that, this hearing will be
    adjourned.
        Mr. Strickland. Thank you, Mr. Chairman.
        [Whereupon, at 3:58 p.m., the Subcommittee was adjourned.]

                                A P P E N D I X

                                  ----------

                   Material Submitted for the Hearing Record

      Letter from Edouard R. Quatrevaux to the Honorable Chris Cannon, a
       Representative in Congress from the State of Utah, and Chairman,
               Subcommittee on Commercial and Administrative Law

    Memorandum to Board of Directors of the Legal Services Corporation from
                           Covington & Burling L.L.P.

      January Transcripts of the Minutes of the Board and the Performance
               Review Committee of the Legal Services Corporation