[Senate Hearing 110-655]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-655
 
CLOSING THE JUSTICE GAP: PROVIDING CIVIL LEGAL ASSISTANCE TO LOW-INCOME 
                               AMERICANS

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

                                HEARING

                               before the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 22, 2008

                               __________

                          Serial No. J-110-95

                               __________

         Printed for the use of the Committee on the Judiciary


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                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
EDWARD M. KENNEDY, Massachusetts     ARLEN SPECTER, Pennsylvania
JOSEPH R. BIDEN, Jr., Delaware       ORRIN G. HATCH, Utah
HERB KOHL, Wisconsin                 CHARLES E. GRASSLEY, Iowa
DIANNE FEINSTEIN, California         JON KYL, Arizona
RUSSELL D. FEINGOLD, Wisconsin       JEFF SESSIONS, Alabama
CHARLES E. SCHUMER, New York         LINDSEY O. GRAHAM, South Carolina
RICHARD J. DURBIN, Illinois          JOHN CORNYN, Texas
BENJAMIN L. CARDIN, Maryland         SAM BROWNBACK, Kansas
SHELDON WHITEHOUSE, Rhode Island     TOM COBURN, Oklahoma
            Bruce A. Cohen, Chief Counsel and Staff Director
           Stephanie A. Middleton, Republican Staff Director
              Nicholas A. Rossi, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Cardin, Benjamin L., a U.S. Senator from the State of Maryland...     1
    prepared statement...........................................   143
Feingold, Hon. Russell D., a U.S. Senator from the State of 
  Wisconsin, prepared statement..................................   154
Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa, 
  prepared statement.............................................   175
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont, 
  prepared statement.............................................   197

                               WITNESSES

Barnett, Helaine M., President, Legal Services Corporation, 
  Washington, D.C.; accompanied by Jonann C. Chiles, Member, 
  Board of Directors, Legal Services Corporation, Little Rock, 
  Arkansas.......................................................     4
Boehm, Kenneth F., Chairman, National Legal and Policy Center, 
  Falls Church, Virginia.........................................    21
Diller, Rebekah, Deputy Director, Justice Program, Brennan Center 
  for Justice, New York University Law School, New York, New York    27
Franzel, Jeanette M., Director, Financial Management and 
  Assurance, U.S. Government Accountability Office, Washington, 
  D.C............................................................    24
Joseph, Wilhelm H., Jr., Executive Director, Maryland Legal Aid 
  Bureau, Inc., Baltimore, Maryland..............................    19
Livingston, Lora J., Judge, 261st District Court (Texas), Austin, 
  Texas, and Member, Standing Committee on Legal Aid and Indigent 
  Defendants, American Bar Association...........................    15
Wallace, Jo-Ann, President and Chief Executive Officer, National 
  Legal Aid and Defender Association, Washington, D.C............    17

                         QUESTIONS AND ANSWERS

Responses of Helaine M. Barnett to questions submitted by 
  Senators Sessions and Grassley.................................    35
Responses of Jonann C. Chiles to questions submitted by Senator 
  Sessions.......................................................   103
Responses of Jeanette M. Franzel to questions submitted by 
  Senator Sessions...............................................   106

                       SUBMISSIONS FOR THE RECORD

American Bar Association, Thomas M. Susman, Washington, D.C., 
  letter and attachments.........................................   108
Associated Press:
    August 15, 2006, article.....................................   116
    January 18, 2008, article....................................   120
Barnett, Helaine M., President, Legal Services Corporation, 
  Washington, D.C.; accompanied by Jonann C. Chiles, Member, 
  Board of Directors, Legal Services Corporation, Little Rock, 
  Arkansas, statement............................................   123
Boehm, Kenneth F., Chairman, National Legal and Policy Center, 
  Falls Church, Virginia, statement..............................   134
Boozer, F. Vernon, Chair, Maryland Legal Services Corporation, 
  Baltimore, Maryland, statement.................................   139
Diller, Rebekah, Deputy Director, Justice Program, Brennan Center 
  for Justice, New York University Law School, New York, New 
  York, statement................................................   146
Franzel, Jeanette M., Director, Financial Management and 
  Assurance, U.S. Government Accountability Office, Washington, 
  D.C., statement................................................   156
Goldsmith, Sharon E., Esq., Executive Director, Pro Bono Resource 
  Center of Maryland, Baltimore, Maryland, statement.............   169
Joseph, Wilhelm H., Jr., Executive Director, Maryland Legal Aid 
  Bureau, Inc., Baltimore, Maryland, statement and attachments...   177
Kepplinger, Gary L., General Counsel, General Accountability 
  Office, Washington, D.C., statement............................   189
Livingston, Lora J., Judge, 261st District Court (Texas), Austin, 
  Texas, and Member, Standing Committee on Legal Aid and Indigent 
  Defendants, American Bar Association, Washington, D.C., 
  statement......................................................   199
National Conference of Bar Presidents, Chicago, Illinois, letter.   212
National Organization of Legal Services Workers, Local 2320, 
  International Union, United Automobile, Aerospace & 
  Agricultural Workers of America (UAW), Detroit, Michigan, 
  statement......................................................   215
U.S. Senators in support of an increase in Legal Services 
  Corporation funding, Washington, D.C., joint letter............   225
Wallace, Jo-Ann, President and Chief Executive Officer, National 
  Legal Aid and Defender Association, Washington, D.C............   230
West, Kirt, former Inspector General, Legal Services Corporation, 
  Washington, D.C., statement....................................   245


CLOSING THE JUSTICE GAP: PROVIDING CIVIL LEGAL ASSISTANCE TO LOW-INCOME 
                               AMERICANS

                              ----------                              


                         THURSDAY, MAY 22, 2008

                                       U.S. Senate,
                                Committee on the Judiciary,
                                                   Washington, D.C.
    The Committee met, Pursuant to notice, at 2:15 p.m., in 
room SD-226, Dirksen Senate Office Building, Hon. Ben Cardin, 
presiding.
    Present: Senator Cardin.

 OPENING STATEMENT OF HON. BEN CARDIN, A U.S. SENATOR FROM THE 
                       STATE OF MARYLAND

    Senator Cardin. The Committee will come to order.
    First, let me thank Senator Leahy for allowing me to chair 
today's hearing on ``Closing the Justice Gap: Providing Civil 
Legal Assistance to Low-Income Americans.''
    Let me first apologize for being a few minutes late. The 
Senate is voting on the farm bill, the veto override, and that 
is going to be the last vote of the week. So I appreciate your 
patience in the starting of this hearing.
    I also from the beginning want to thank particularly 
Senator Kennedy. We all, of course, hold Senator Kennedy in our 
prayers. The discovery this week about his illness has been a 
blow to all of us here on both sides of the aisle, and there 
has been a tremendous outpouring of support. We know that he 
will continue to fight, but we miss him.
    In planning this hearing, I talked to Senator Kennedy, who 
gave me a lot of good advice as to what we should be doing. He 
is an ardent supporter of bridging the justice gap in America 
and wants to do everything he can to provide additional help to 
those today that do not have adequate access to our legal 
system, and I thank Senator Kennedy for that. He, of course, 
chairs the Committee that has primary jurisdiction over the 
Legal Services Corporation, and obviously his leadership in 
this area is indispensable. I also want to acknowledge the work 
that is being done on the Appropriations Committee that has 
been involved in many of these issues.
    As I pointed out, the purpose of today's hearing is to 
establish a record in the Judiciary Committee on a matter that 
is very important to the work of our Committee, and that is, 
how well are we meeting the needs of those people who are 
otherwise unable to get adequate legal representation in 
dealing with access to our justice system? And I would hope 
that today's hearing would focus on that so that we would have 
a good chance to make an assessment of where we are and where 
we need to go.
    The LSC Board completed a report that documented the 
justice gap in America. That report is titled, ``The Current 
Unmet Civil Legal Needs of Low-Income Americans.'' It was a 
reflection of what they discovered in 2005, and what that 
report pointed out--and I must tell you, I was a little bit 
surprised because I did not think the circumstances were as 
positive as that report pointed out, which was not very 
positive--is that one out of every two eligible individuals who 
seek legal assistance are denied services because of budgetary 
reasons. That means that we have a large gap in meeting our 
responsibilities.
    That report was done in 2005. It pointed out pretty clearly 
that that is those who seek help, and a large number of 
individuals do not even bother to try to get help to deal with 
their legal needs. So the gap is much larger than 50- percent 
failure in meeting needs.
    And then when one understands that the eligibility--the 
number of people who are eligible for legal services has 
increased since 2005, we have had major disasters since that 
time that add to the need for people having access to our legal 
system, including, of course, Katrina. We are suffering through 
a difficult economic time. The number of foreclosures are at an 
all-time high. That adds again to the circumstances of need, 
taking us well beyond where we were in 2005. And since 2005, 
the resources made available for civil legal needs have 
certainly not been keeping up with those additional challenges.
    As has been pointed out in the reports that have been made 
available to our Committee, there have been several States that 
have done an assessment as to where we are in meeting the needs 
of low-income families, and those reports show that the gap 
could be as high as 80 percent--in other words, one out of five 
people who need help who are eligible for services are getting 
those services. I think that is a shocking number, and we need 
to do something about it.
    We have a responsibility, and I must tell you, I have gone 
through this a great deal with the different interest groups, 
and it is clear to me that the legal profession has a 
responsibility. The legal profession is charged with the access 
to justice, and the legal community must do more.
    It is clear to me that State and local governments must do 
more. They have direct responsibility for the welfare of their 
citizens, have certain standards that must be met, and State 
and local governments must do more.
    But it is clear to me that the Federal Government must do a 
lot more in order to meet these needs. We have a 
responsibility, as the senior partner in administering the 
institutions of Government, to make sure that the legal system 
is available to all of our citizens. That responsibility, in my 
view, has not been met.
    In 1981, the Legal Services Corporation statute was passed, 
and that statute authorized $321 million of Federal funds to 
meet the needs of civil legal services for the poor. 
Presumptuously, that would be what we thought the needs were in 
1981. The staff has prepared a chart that I will ask them just 
to show which will tell us where we have been since 1981. In 
fiscal year 2007, the amount went to $348 million. But as you 
can see the blue lines on that chart, the amount of funds that 
the Federal Government has provided has not kept up with the 
inflation, and the red line is the inflationary number.
    If we just adjusted the amount of moneys that were provided 
in 1981 to provide the same level of service adjusted for 
inflation using 1981 dollars, we should be at $678 million to 
the Legal Services Corporation. So we need to do much better at 
the national level than we are doing today.
    My own experiences on how we should deal with this are 
really learned from what happened in Maryland during the 1980s. 
During the 1980s, I was asked to chair a commission to study 
where we were in Maryland and what we could do to try to 
improve the situation. All the stakeholders sat on the 
commission, and we studied the circumstances in Maryland and 
found that there was a shocking gap between needs and services, 
where only one out of four were really being met with their 
needs.
    So we set out to do something about it, and we asked all of 
the players to do more. We had many recommendations which have 
been enacted into law. One of those was to have our two law 
schools that are located in Maryland start clinical programs 
and have experiences available for every law student to 
understand their responsibility for poverty law.
    I remember talking to Governor Schaefer at the time, and 
Governor Schaefer agreed to put a substantial amount of money 
in the State budget in order to implement that recommendation. 
He did that based upon the commitment that the bar would do 
more and lawyers would do more and the private sector would do 
more in order to close the gap. And today we have robust 
clinical programs in both of our law schools, which are 
providing direct services to the vulnerable population as well 
as training the lawyers of the future to be more sensitive to 
their responsibilities.
    We attempted to have lawyers do more, and we succeeded. The 
Maryland pro bono program is much more robust than it was in 
the 1980s. I see Herb Garten, who is in the audience, a member 
of the Board. It is a pleasure to have Herb here. He was 
instrumental at the Bar Association in Maryland in stepping up 
and carrying out their responsibilities. We asked the private 
sector to do more. We asked lawyers through their IOLTA program 
to do more. And we made a major difference.
    So I think we can do a much better job both through the 
direct services that are provided through the Federal 
Government through grants as well as by the major stakeholders 
assuming a greater responsibility, including the lawyers.
    So today's hearing, the purpose of which is to establish a 
record, a record for this Congress, I hope, to use to develop a 
game plan to address the gap that exists today, develop a 
strategy to close that gap so that our justice system that we 
showcase around the world is truly available to all of our 
citizens.
    [The prepared statement of Senator Cardin appears as a 
submission for the record.]
    With that, I will turn to our first panel of witnesses. As 
is the custom of the Judiciary Committee, I am going to ask the 
two panelists if they would stand in order to take the oath. 
Please raise your right hands. Do you affirm that the testimony 
you are about to give before the Committee will be the truth, 
the whole truth, and nothing but the truth, so help you God?
    Ms. Barnett. I do.
    Ms. Chiles. I do.
    Senator Cardin. Thank you, and let the record show 
affirmative response.
    Our first of two witnesses, is Helaine Barnett, who is the 
President of Legal Services Corporation, comes out of an 
experience in legal aid work which we are very proud of, and 
she is accompanied by Jonann Chiles, who is a member of the 
Board of Directors and recently appointed from Little Rock, 
Arkansas.
    We will start with President Barnett.

  STATEMENT OF HELAINE M. BARNETT, PRESIDENT, LEGAL SERVICES 
CORPORATION, WASHINGTON, D.C.; ACCOMPANIED BY JONANN C. CHILES, 
MEMBER, BOARD OF DIRECTORS, LEGAL SERVICES CORPORATION, LITTLE 
                         ROCK, ARKANSAS

    Ms. Barnett. Thank you and good afternoon, Senator Cardin.
    First of all, Senator Cardin, we want to thank you for 
holding this hearing today and for giving us an opportunity to 
talk about LSC's ground-breaking report on the justice gap in 
America and the work that LSC-funded programs are doing to 
serve the civil legal needs of the poor. Your long-standing 
public support and hard work for civil legal aid in Maryland, 
your chairmanship of the Maryland Legal Services Corporation, 
and your association and friendship with Herb Garten, whom you 
recognized today, are well known. Now we are able to thank you 
for your national leadership on this important issue.
    I am honored to be the first career legal aid attorney to 
hold the position of President of the corporation in its 34-
year history. I know first-hand what our work means to the 
lives of our clients and have a deep personal commitment to 
providing high-quality civil legal services to eligible low-
income Americans.
    Fifty million Americans are eligible to receive civil legal 
aid from LSC-funded programs, including more than 13 million 
children. The stark reality today is that the need for civil 
legal aid to protect basic human needs is much greater than the 
resources available.
    As you noted, in September of 2004, the Legal Services 
Corporation Board of Directors asked LSC staff to document the 
extent to which civil legal needs of low-income Americans were 
not being met. LSC conducted a year-long study culminating in 
the 2005 report ``Documenting the Justice Gap in America: The 
Current Unmet Civil Legal Needs of Low-Income Americans.''
    The study established that for every client who received 
service, one eligible applicant was turned away for lack of 
adequate program resources. All those committed to a civil 
society know that turning away half of the people who seek 
legal assistance is not acceptable. Equal justice under law is 
a bedrock principle and these numbers do not reflect equal 
justice.
    LSC's ``unable to serve'' study documented only those who 
actually sought assistance from an LSC-funded program, but as 
you know, Chairman Cardin, the need is much greater. Many 
eligible people do not contact the program either because they 
are unaware they have a legal problem, they do not know that 
the program can help them, or they do not know that they are 
eligible for free civil legal assistance.
    And while our study is now more than 2-1/2 years old, there 
have been nine additional statewide legal needs studies and 
reports published since our study, and they have all confirmed 
that the justice gap findings are a reality and, if anything, 
are understated.
    Furthermore, the number of people sliding into poverty who 
need legal assistance is doubtlessly increasing as a result of 
the subprime mortgage foreclosure crisis, the recent rash of 
natural disasters across the country, and the general economic 
downturn and rising costs of such essentials as energy, gas, 
and food.
    Whether someone has lost their home to foreclosure or 
flooding, or whether their monthly income can no longer provide 
for life's necessities, more and more Americans will soon be 
turning to legal services programs for help in getting back on 
their feet.
    So what is the strategy to close the justice gap in 
America? The Corporation is developing long-term strategies 
involving strengthening local, State, and national 
partnerships. Our grantees work hard every day to ensure 
efficient use of the funding that is available, and they will 
continue to do so.
    Technology is a vitally important tool to help expand 
access to justice and provide self-help options for those that 
we are unable to directly serve. Technology improvements allow 
LSC grantees to deliver more assistance and is part of the 
strategy.
    Private attorney involvement is another important element 
of the strategy. The LSC Board has taken a leadership role and 
is using LSC's national voice to encourage a culture of 
expanded private attorney involvement as an effective tool for 
providing legal services to more persons in need. Last year, 
private attorneys handled more than 97,000 cases for LSC-funded 
programs, and we are working in partnership with the ABA on 
ways to expand private attorney involvement.
    While these are important elements of the strategy, 
technology and private attorneys alone cannot close the justice 
gap.
    Our Justice Gap Report concluded that just to serve those 
who actually sought help and were eligible to receive it, LSC's 
funding from the Federal Government would have to more than 
double, as would State, local, and private funding. Recognizing 
the political and fiscal realities at the time, the Board 
elected to request from Congress that the Federal increase be 
spread over 5 years.
    Nationwide, LSC encourages its grantees to leverage their 
Federal dollars, working with their partners in State equal 
justice communities, and this has resulted in significant 
increases of State, local, and private funds between 2005 and 
2007.
    However, while State, local, and IOLTA funds have expanded, 
State budget deficits and the drop in interest rates are 
placing some of those increases at serious risk.
    Mr. Chairman, as we have discussed, LSC is improving both 
our governance and our oversight. As you know, the Government 
Accountability Office issued two reports, one in September 2007 
on the Corporation's governance and accountability, and another 
in January 2008 on our grants management and oversight. We 
appreciated both of these reviews of our policies and practices 
and cooperated fully with GAO throughout the audits. Further, 
we accepted all of the recommendations and have made it a top 
priority to address the recommendations of both reports and 
have implemented or gone beyond nearly all the recommendations. 
We welcome the opportunity it has presented to help us do our 
job even better. In my written statement, I have provided a 
full accounting of our progress to date.
    In conclusion, the Justice Gap Report is as compelling 
today as it was when it was released in September of 2005. 
While the statistics are daunting, numbers alone do not tell 
the whole story of the impact that the lack of resources for 
providing high-quality legal assistance has on the lives of 
low-income individuals and families.
    For those millions of low-income Americans who are trying 
to keep a roof over their heads, who are trying to escape an 
abusive or life-threatening relationship, who are trying to 
keep their families together and safe, civil legal assistance 
is not just an abstract concept but a service that helps save 
lives and provides safety, security, and a path to self-
sufficiency. It all flows from our founding principle of equal 
access to justice established in the Preamble to our 
Constitution and reiterated in our Pledge of Allegiance.
    As U.S. Supreme Court Justice Lewis Powell said, ```Equal 
Justice under Law' is not merely a caption on the facade of the 
Supreme Court building. It is perhaps the most inspiring ideal 
of our society...it is fundamental that justice should be the 
same, in substance and availability, without regard to economic 
status.''
    That is the mission that LSC and our grantees across the 
country try every single day to fulfill.
    Thank you.
    [The prepared statement of Ms. Barnett appears as a 
submission for the record.]
    Senator Cardin. Thank you very much for your testimony.
    Ms. Chiles, do you want to make a statement or do you just 
want to respond to questions?
    Ms. Chiles. Senator, I will be happy to respond to 
questions. I do not have a prepared statement. However, I would 
like to echo Ms. Barnett's thanks to you for convening this 
hearing.
    Senator Cardin. Take as much time as you want on that.
    [Laughter.]
    Ms. Chiles. We appreciate your recognition of the justice 
gap and your dedication to working to closing the justice gap. 
I am here to assure you on behalf of the Board that we are 
dedicated to closing the gap through the efficient and 
effective use of the resources that are available to us.
    Senator Cardin. Thank you very much, and I am going to have 
a couple questions for you.
    Let me first start with the 2005 report. It indicated that 
one out of every two eligible individuals who seek services are 
unable to receive those services, and I want to put a face on 
it. Can you tell us what happens to those individuals? Do you 
have any idea where they go or what type of cases we are 
talking about, what type of people we are talking about that 
are turned down for services?
    Ms. Barnett. The individuals who sought assistance sought 
in the areas of our program's priorities. When our programs are 
unable to assist them, perhaps there can be a referral to a bar 
association or pro bono panel; perhaps they go pro se to the 
courts on their own. But in large measure, we all know that 
when we are not able to assist them, they have nowhere else to 
go.
    Senator Cardin. There is not a huge safety net out there 
beyond your grantees. What type of cases are we talking about?
    Ms. Barnett. We are talking about the core matters that our 
grantees represent nationwide, whether they are family law 
cases, keeping families intact; whether they are keeping safe 
and habitable housing; whether they are preventing foreclosure; 
whether they are assisting with needed medical care; whether 
they are providing benefits to disabled persons.
    Senator Cardin. Senator Kennedy, as I have indicated, is 
taking a lead effort on these issues, including trying to get 
the appropriations level at a higher amount, along with Senator 
Harkin. If you were to receive extra funding--and staff has 
made--I was asking for a copy of the letter. The letter was 
dated May 21st and actually is signed by a good number of 
members--by a majority of the Members of the Senate asking for 
additional funds.
    Where are your priorities? Where would these additional 
funds be used if you got additional funding beyond the current 
level?
    Ms. Barnett. Well, as you, I am sure, are aware, we have 
asked for $471 million for fiscal year 2009, and 95 percent of 
that would go to the local programs based on the statutory 
formula of the poor person population in their geographic area.
    The additional money would go for technology initiatives 
since we believe that is an important strategy with regard to 
help closing the justice gap. We also have asked for additional 
money to continue our loan repayment assistance program, which 
we think is critically important to attract young lawyers to 
legal aid programs and to retain high-quality staff. In 
addition, we have less than 4 percent going to grants 
management and administrative oversight. We feel we do need 
additional oversight staff, particularly to implement those 
changes and recommendations we have adopted from the GAO 
report.
    Senator Cardin. Could you just tell us how much of your 
budget goes for administrative purposes?
    Ms. Barnett. Less than 4 percent.
    Senator Cardin. But that also includes the oversight that 
you are required to do with the grantees?
    Ms. Barnett. It is. In fact, ``administration'' is a term 
that we hope we can change. It really has to do with grants 
oversight and management. And, yes, that goes--less than 4 
percent, and that does cover the staff that we need to provide 
both the oversight for compliance and program quality to ensure 
it.
    Senator Cardin. Well, just to make an observation, that is 
certainly a relatively small percentage of the funds, and I 
applaud you on that. Clearly, as the GAO report pointed out, 
but as this Committee has said, we want to make sure that there 
is proper supervision to make sure the funds go for their 
intended purpose. So you need to have an adequate staff in 
order to do that, so it is difficult with the amount of funds 
that have been made available.
    Let me just read you one of the demographic information 
that has been made available to us, that for low-income persons 
there is one attorney for every 6,800 in civil legal needs. In 
the general population, it is one out of every 525. So just 
looking at the number of lawyers that are prepared to handle 
the civil legal needs of low-income families versus the number 
of lawyers available to the general public, there is a huge 
difference, 13 times more attorneys for the general public than 
for low-income families.
    Do we really have equal justice with that type of a 
disparity on those attorneys that are handling these matters?
    Ms. Barnett. Well, we don't believe we do have equal access 
to justice right now with the current level of funding. That is 
part of the reason we are asking for additional funding where 
the great bulk of it goes to the program, to hire staff, to 
deal with their salary needs, to get more staff. We do believe 
that private attorney involvement can be expanded and enhanced. 
We do believe that through technology we can make available 
more pro se initiatives. We do believe that we encourage our 
programs to leverage their Federal dollars and work in State 
access-to-justice communities to increase both the local, 
State, and private funding as well.
    So, without at least a doubling of the Federal commitment 
and a doubling of the local, State, and private sources, there 
will not be enough attorneys to represent those who desperately 
need it.
    Senator Cardin. So that brings me to your request. Your 
request you said was four hundred and?
    Ms. Barnett. Seventy-one.
    Senator Cardin. Four hundred and seventy-one million. Does 
that represent a minimum access dollar amount, or is that the 
pragmatic number that you would hope could be made available?
    Ms. Barnett. When we made our report to the board of 
directors, they said, recognizing political reality and fiscal 
constraints, that it would be prudent to ask for the doubling 
of the Federal commitment over 5 years. So the original idea 
was to ask for a 20- percent increase each year. Of course, we 
have not gotten 20 percent, and we recognize it is going to be 
a much longer process than 5 years.
    But the $471 million request is based on 20 percent of the 
Senate's allocation in their bill last year for basic field, so 
it has a rationale behind it.
    Senator Cardin. So to double the budget in 5 years was 
the--
    Ms. Barnett. Was the original concept, and obviously we 
well recognize it is going to take quite a bit longer than that 
to accomplish.
    Senator Cardin. Ms. Chiles, let me, if I might, ask you to 
comment on the GAO report as to how well it was received by the 
board, what the board has done in response to it, whether you 
accept their recommendations that should be made, and whether 
you are taking steps to implement those changes.
    Ms. Chiles. Yes, the board has accepted the GAO report, 
embraced the GAO report, and worked diligently over the course 
of the past 6 or 7 months to address the concerns raised in the 
GAO report. I can, if you would like, go through briefly each 
of the recommendations that the GAO made to the board and to 
management, and I can tell you what has been done to date.
    Senator Cardin. If you could do that briefly, that would be 
helpful.
    Ms. Chiles. Feel free to interrupt me if I am not brief.
    In August of 2007, the GAO issued a report entitled ``LSC 
Governance and Accountability Practices Need to be Modernized 
and Strengthened.'' There were four recommendations made to 
management. There were eight recommendations made to the board. 
The first recommendation--
    Senator Cardin. I think we have the recommendations in our 
file, so if you could just perhaps tell us how you have 
responded to it, it might be more helpful to us.
    Ms. Chiles. OK, very well. We have enacted a Code of 
Conduct, which applies to the board, officers and employees. We 
have instituted training on that Code of Conduct.
    LSC has instituted a Continuity of Operations Plan. That 
plan will be tested in July.
    The LSC examined whether the Government Accounting 
Standards Board should be adopted as a financial standard for 
LSC, determined that that was appropriate, and have continued 
to operate under those standards.
    Fourth, the GAO recommended that LSC management conduct and 
document a risk assessment program and implement--well, I 
should say conduct and document a risk assessment and 
thereafter implement an appropriate program to deal with risk 
assessment. And to date, management has researched risk 
management programs and best practices, identified the risk 
environment for the Corporation, and begun an office-by-office 
risk assessment.
    When this assessment is finished, an appropriate policy 
will be enacted and followed at the Corporation. The 
institution of a risk assessment and management program will do 
much to address the concerns that have been raised by the GAO 
in both the first report and the second report.
    The GAO made eight recommendations to the board in the 
first report. They recommended that we establish an Audit 
Committee or an Audit Committee function. That has been done, 
and I believe that that is going to be a very useful tool 
within the Legal Services Corporation for addressing, again, 
the risk issues identified by the GAO. I think it is also going 
to be a very helpful tool for communication between the Board, 
management, and the Inspector General's office.
    Also in response to the GAO report, the board has adopted 
charters for three of its subcommittees. The board is currently 
looking at creating a charter for its Operations and 
Regulations Committee and its Governance and Performance Review 
Committee. We are working to take--we are working to determine 
what the appropriate allocation of responsibilities is between 
those two committees, and that is why we don't have those two 
charters finished yet. We do expect to have those in place in 
August, our next meeting.
    The GAO recommended that the board develop and implement a 
procedure to evaluate key management processes, including 
processes for risk assessment, mitigation of risk, internal 
controls, and financial reporting. And this recommendation is 
going to be taken care of largely, I believe, by the creation 
and operation of the Audit Committee.
    We have established a shorter timeframe for issuing LSC-
audited financial statements, and still pending is the 
establishment of an orientation program for new members, 
training for new members, the creation of a Compensation 
Committee function, and the evaluation of the performance of 
the board, each board committee, and each board member. And, 
again, the reason those last three to four recommendations have 
not been accomplished yet is because the board is still 
discussing the proper allocation of those responsibilities 
within the board, with Operations and Regulations or 
Performance Review.
    Senator Cardin. Can you give us just a timeline as to 
when--I take it you are going to act on those recommendations, 
you intend to do that?
    Ms. Chiles. Yes, sir. We intend to act as quickly as 
possible. In fact, we intended to act on those recommendations 
in our August meeting. Questions arose about the right way to 
go about dealing with these last recommendations; hence, the 
addition of these items to our next agenda, our next board 
meeting agenda.
    Senator Cardin. Do you anticipate at the next board you 
will be able to act on those issues?
    Ms. Chiles. Yes, sir. Yes, sir.
    Senator Cardin. Thank you.
    Ms. Chiles. And I would be happy to report back to you 
about what we do.
    Senator Cardin. If you would, we would appreciate that. 
Keep us informed on that. It would be helpful to us.
    Ms. Chiles. That covers the first GAO report.
    The second GAO report was issued in December 2007. It was 
entitled ``LSC Improved Internal Controls Are Needed in Grants 
Management and Oversight.'' Four recommendations were made to 
management, one recommendation was made to the board.
    The first recommendation to management is that it followup 
on each instance of improper use of Federal moneys. That has 
been done and is still being done by the office--well, by Legal 
Services management working together with the Inspector 
General's office. And when we receive--when the board receives 
a report on the examination of those grantees who are 
identified specifically in the GAO report, we plan to conduct a 
case study using those instances to determine how those 
situations could have been addressed and can be addressed in 
the future should they arise.
    The second request, the second full request from GAO to LSC 
is that the management develop and implement policies and 
procedures for information sharing amongst the Office of 
Inspector General, the Office of Program Performance, and the 
Office of Compliance and Enforcement, and that they coordinate 
their visits to grantees. That is being done. As we speak 
today, that is being done, and it will continue to be done. It 
is being done in practice, and it has been taken care of 
through the drafting of updated policies and procedures within 
the Corporation.
    The third of four recommendations to management was that 
LSC management develop and implement an approach for selecting 
grantees for internal controls and compliance reviews based on 
risk-based criteria; and also that that approach use 
information results from oversight and audit activities 
consistently. Again, this gets back to the issue of 
coordination and communication within LSC and with the 
Inspector General's office. And I can represent to you as a 
member of the ad hoc committee which was formed by the board to 
address some of these issues--well, to address in particular 
the issues of communication and coordination that we have made 
great strides in the past 6 to 7 months in the areas of 
communication and coordination. And the Legal Services 
Corporation is stronger because of it.
    The last recommendation to the Corporation from the GAO is 
that LSC develop and implement procedures to improve the 
effectiveness of the current LSC fiscal compliance reviews by 
revising its guidelines, and those guidelines have been 
updated. And if you have questions about specific changes to 
the guidelines, management would, I am sure, be more than happy 
to give you that information.
    The last recommendation, which was addressed to the board, 
was that the board develop and implement policies that 
delineate organizational roles and responsibilities for grantee 
oversight and monitoring, including grantee internal controls 
and compliance. And that has been done and is continuing to be 
done. That was accomplished primarily through the creation of 
an ad hoc committee on the board, a three-member committee made 
up of Mr. Garten, Sarah Singleton from New Mexico, and myself. 
Sarah was the designated liaison to management. The ad hoc 
committee had several briefings from the OIG and from OPP and 
OCE. We have had one public meeting. We gave a report to the 
entire board at our last board meeting in April.
    In response to that report, the board, the entire board of 
the Legal Services Corporation, adopted a very clear and 
detailed statement of the roles and responsibilities of each of 
the oversight entities at the Legal Services Corporation. And I 
am pleased to report that that document was the result of very 
hard work on the part of LSC management, the Office of--excuse 
me, OPP, OCE, and the Office of Inspector General. We have a 
new Inspector General, Jeffrey Schanz, who is a pleasure to 
work with.
    Senator Cardin. Well, thank you for that pretty thorough 
reply.
    Ms. Barnett. Mr. Chairman, would it be possible for me just 
to elaborate on one or two of the management recommendations 
and the action that was taken?
    Senator Cardin. Sure.
    Ms. Barnett. With regard to the followup of the nine 
instances that GAO identified during their program visits, I 
did refer eight of them to the Office of the Inspector General, 
and the Office of Inspector General has completed the field 
work at all eight of them and has reported to us that for the 
eight sites reviewed and based on the OIG's preliminary 
analysis, management of the grantees have adequately addressed 
the GAO recommendations and are implementing additional 
controls to prevent those issues from reoccurring.
    I also sent an advisory in March to all LSC-funded programs 
reminding them of the need for accurate documentation and the 
regulations regarding unallowable costs, specifically stressing 
the prohibition on the use of LSC funds for alcohol and 
lobbying, the need for written policies governing salary 
advances, and a reminder of the regulation governing derivative 
income.
    We kept one of the programs that was identified by GAO 
because we had already begun an Office of Compliance and 
Enforcement review. And I can report to you that LSC is taking 
action to terminate the current grant and replace it with 
month-to-month funding, with strict special conditions that 
require monthly action and reporting to LSC. And should the 
program not be able to meet those special conditions, LSC will 
terminate the month-to-month funding and seek a different 
provider through new competition.
    And, finally, I would just point out that with regard to 
our revised fiscal component, we now, as part of our expanded 
Office of Compliance and Enforcement onsite fiscal reviews, are 
specifically looking for specific documentation, contract 
service arrangements, employee interest-free loans or salary 
advances, lobbying fees, late fees or penalties due to lack of 
good financial management, derivative income, and alcohol 
purchases. So we have improved, based on the GAO 
recommendations and what they have reported to us, our fiscal 
review. And we have finally gone beyond the recommendations and 
addressed the timeliness of our reports. All reports for 2007 
have been provided to all grantees in either draft or final 
form. We have set in our new manuals new timelines. Within 60 
days after a program visit, they will get a draft report, for 
the most part, and 90 days thereafter.
    So we have even gone beyond, I believe, the recommendations 
to improve our oversight.
    Senator Cardin. Well, thank you. I appreciate that. And if 
you will keep us informed as to the further actions taken, we 
would appreciate it.
    I want to return to the capacity within the legal system. 
When I chaired the Maryland Legal Services Corporation, one of 
the most glaring problems we identified was the gap on salaries 
for those that are in Legal Services versus private practice 
and other fields of public interest law. And I really do admire 
those lawyers who go into public interest law at any level, 
whether it is in the criminal justice system or whether it is 
in the civil side.
    We had legislation before this Committee last year that 
dealt with loan forgiveness, and I know that we looked at the 
disparities within public interest then, and it was the legal 
aid lawyers who were at the bottom. Although the salary levels 
for public defenders and prosecutors should be higher, they 
were higher than those that are in the legal aid bureaus.
    When I was at the Maryland Legal Services Corporation, 1 
year we made that our priority. We decided we were not going to 
expand any new opportunities until we could adjust the salary 
levels of those attorneys that were providing the services in 
order to try to keep experienced lawyers helping meet these 
needs.
    I am interested as to whether you have looked at that issue 
with the different grantees as to whether there is a commitment 
to try to deal with the salary disparity for those that are in 
the civil legal field in public interest law.
    Ms. Barnett. The Legal Services Corporation, Mr. Chairman, 
has a 3-year pilot program for a loan repayment assistance 
program, and we have a total of 82 participants in 24 programs 
initially getting $5,000 a year for 3 years, and this past year 
we got a $500,000 appropriation, and we are raising it to 
$5,600 for 3 years.
    Our evaluation of the first year of the program definitely 
demonstrated what I think is no surprise to anyone in this 
room, that loan repayment assistance programs definitely helped 
young people go to legal service programs and remain there, as 
well as permitting the programs to help recruit and retain 
high-quality staff.
    You have so rightly pointed out that legal aid attorneys 
are the lowest paid of any public sector attorneys, with an 
average starting salary of $37,000, graduating with an average 
debt load of more than $80,000.
    When I mentioned that 95 percent of the increased 
appropriation would go to the LSC programs, it is our 
assumption that some programs would use some of that money for 
salary adjustments as well as other infrastructure needs.
    Senator Cardin. I am certain that happens. One of my 
suggestions might be that there actually be a strategy, if 
there is again a commitment--if Congress were to make a 
commitment to double the funds going to LSC, it seems to me 
that one of the priorities should also be certain 
understandings as to how that money is going to get to improve 
the career opportunities for legal aid attorneys. I think that 
would be a beneficial part of a tangible accomplishment. It is 
not just providing a wider variety of services, which we need 
to do, or taking in more numbers. It is also retaining quality 
attorneys to meet these needs.
    Ms. Barnett. We are having in June a conference of all our 
executive directors, and salary is one of the workshop issues 
in our recruitment and retention session that we will be 
focusing on. We will have all 137 LSC-funded programs 
represented, and this will be a good forum to have that 
discussion.
    Senator Cardin. I have one last question, which is--the 
critics of LSC often point out that you have a model that in 
litigation both sides should have attorneys. Now, I happen to 
think that makes common sense to have lawyers on both sides of 
an issue. But my question is: Have you been able to demonstrate 
that when you have proper legal representation in matters that 
could be in litigation, there is a stronger possibility that 
these cases or probability that these cases can be resolved 
absent a lengthy trial; whereas, when you don't have adequate 
representation, sometimes you have unnecessary litigation?
    Ms. Barnett. Our statistics nationwide show that only about 
10 percent of the cases handled by all LSC-funded programs 
actually go to trial; that, in fact, a lot of what we do is 
preventative, a lot of what we do is being able to settle and 
negotiate a correct resolution for our clients without the 
necessity of a lengthy trial. And Jonann Chiles and I were 
discussing this in the taxi coming over here. Perhaps you will 
share the story of the Tennessee client.
    Ms. Chiles. I thought this was a good example of how our 
grantees educate their clients to become effective advocates 
for themselves. We were told about an incident from Tennessee 
where a client went into a grantee's office to set up a meeting 
with a lawyer for the purpose of talking about how to deal with 
an eviction notice from her landlord. The women went home--she 
made her appointment. She went home carrying a flyer in her 
hand from the grantee, and in that flyer was a list of her 
rights and duties as a tenant and the obligations of a landlord 
under Tennessee law.
    When the woman got home, her landlord was there with the 
police waiting to evict her. She held up her pamphlet and told 
the landlord, ``Well, you haven't met A, B, C, and D, and until 
you do those things, my lawyer says that you can't evict me.'' 
Well, the landlord looked at the pamphlet, and the police 
officer looked at the pamphlet, and everyone agreed that she 
had not had her due process and she could not be evicted yet.
    I thought that was a good example of a client being 
educated and empowered to represent themselves effectively.
    Senator Cardin. Well, thank you for sharing that with us. 
Again, I thank both of you for being here, and I thank you for 
your testimony.
    Ms. Barnett. Thank you so much.
    Ms. Chiles. Thank you.
    Senator Cardin. The second panel, let me introduce the 
second panel. Then I will ask you all to remain standing to 
take the oath.
    The second panel will consist of the Honorable Lora 
Livingston, a judge from the 261st District Court in Texas, and 
a member of the Standing Committee on Legal Aid and Indigent 
Defendants, American Bar Association; Jo-Ann Wallace, the 
President and CEO of the National Legal Aid and Defender 
Association, from Washington, D.C.; Wilhelm Joseph, the 
Executive Director of the Maryland's Legal Aid Bureau, 
Baltimore, Maryland, the person who we are very proud to have 
here, who I have had the honor to work with on legal service 
issues over the years and who does an outstanding job for the 
people of our State; Kenneth Boehm, Chairman of National Legal 
and Policy Center from Falls Church, Virginia; Jeanette 
Franzel, the Director of the Financial Management and Assurance 
Team, U.S. Government Accountability Office--that is GAO--
Washington, D.C.; and Rebekah Diller, Deputy Director of 
Justice Program, Brennan Center for Justice, New York 
University Law School in New York.
    Would you all please raise your hands? Do you affirm that 
the testimony you are about to give before the Committee will 
be the truth, the whole truth, and nothing but the truth, so 
help you God?
    Judge Livingston. I do.
    Ms. Wallace. I do.
    Mr. Joseph. I do.
    Mr. Boehm. I do.
    Ms. Franzel. I do.
    Ms. Diller. I do.
    Senator Cardin. Thank you. The record will reflect that 
there was an affirmative reply to the oath, and we will start 
with the Honorable Lora Livingston.

 STATEMENT OF LORA J. LIVINGSTON, JUDGE, 261ST DISTRICT COURT 
(TEXAS), AUSTIN, TEXAS, AND MEMBER, STANDING COMMITTEE ON LEGAL 
     AID AND INDIGENT DEFENDANTS, AMERICAN BAR ASSOCIATION

    Judge Livingston. Thank you very much, Senator Cardin, for 
letting me visit with you this afternoon about this very 
important issue. I will just briefly for the record continue 
with my introduction.
    My name is Lora Livingston. I am a State court judge. I 
live in Austin, Texas. I am a general jurisdiction trial court 
judge there, but I am submitting this testimony at the request 
of the President of the American Bar Association, William 
Neukom of Seattle, Washington--he could not be here today--to 
voice the association's views with respect to closing the 
justice gap that you so eloquently talked about earlier at the 
beginning of this hearing. It is the association's goal to 
ensure justice for all and to ensure, most importantly, access 
to justice for all Americans, not just those who can afford a 
lawyer. The ABA strongly believes that this objective can be 
and must be largely achieved by strengthening the Legal 
Services Corporation because it is the entity in our system of 
justice that really is the linchpin to ensuring access to the 
legal system for all Americans.
    The ABA is the world's largest voluntary professional 
organization with more than 413,000 members. It is the national 
representative of the legal profession, and it serves the 
public and the profession by promoting justice, professional 
excellence, and respect for the law. We are an association that 
is firmly rooted in the rule of law and believe in its 
precepts.
    I started my career as a legal aid lawyer. I was what we 
call a ``Reggie.'' I was part of the Reginald Heber Smith 
Community Lawyer Fellowship program, and my assignment was in 
Austin, Texas. That is how I got to Texas from California, 
where I am from.
    I spent about 6 years in the legal aid office in Austin, 
Texas, doing basic poverty law work, and I then went into 
private practice and then later became a judge.
    I am here on behalf of President Neukom and the ABA and 
also on behalf of the Standing Committee on Legal Aid and 
Indigent Defendants. We call that committee within the ABA 
``SCLAID'' for short. SCLAID is chaired by former Texas Supreme 
Court Justice Deborah Hankinson. She could not be here today 
and so asked me to provide this testimony on her behalf.
    We have five judges on SCLAID, and I think that that should 
demonstrate to you and signal just how important SCLAID is 
within the ABA and the importance of this work, ensuring access 
to justice for all, because it includes so many members of the 
judiciary on the committee.
    The ABA has a long history of involvement in access-to- 
justice initiatives. Ms. Barnett talked about Supreme Court 
Justice Lewis Powell and his work serving the ABA when he was 
President and calling back in 1964 for a major expansion of the 
Nation's legal services work for the poor, and that ultimately 
led to the creation of the LSC program.
    The ABA strongly opposed past efforts to eliminate the 
efforts to reduce access to legal services for the poor and 
since then has been very involved in securing bipartisan 
support for not only LSC but for access-to-justice initiatives 
in general. You referred earlier to the Senate letter, dated 
yesterday, that is signed by, I believe, 55 Senators, and we 
are still working on getting more signatures on that letter. 
But in addition to that letter, you should also--
    Senator Cardin. Let us know when you have 60, please.
    Judge Livingston. Great. Even better. See, your information 
is more up-to-date than--
    Senator Cardin. No, no. I said let us know when you get to 
60.
    Judge Livingston. Oh, let you know. OK. All right.
    Senator Cardin. That is a key number around here.
    [Laughter.]
    Judge Livingston. That is the number we are shooting for. 
That is our goal, and we will definitely let you know when we 
achieve that milestone.
    In addition to that important letter, though, I should also 
tell you that there is a letter signed by all 50 State bar 
presidents, the State bar presidents of the District of 
Columbia Bar, as well as the bars in the Virgin Islands and 
Puerto Rico. This is an important issue to every State bar 
association in this country and some of its territories. I 
cannot underscore more significantly than that the widespread 
both partisan, bipartisan, and nonpartisan support for legal 
services to the poor in America.
    LSC, I want to tell you, is the essential linchpin in our 
comprehensive system of delivery of legal services to the poor 
in this country. It is the most significant entity that we have 
in the administration of justice in this country, and it is the 
one, probably perhaps most important part of the overall system 
of justice. It is the one that funds most of the work that is 
done out in the field, and certainly there are partners--you 
have talked about IOLTA programs. There are certainly 
partnerships on the State and local level. There are grant 
funds that are nongovernmental funds that support legal 
services throughout the country, but LSC funds really are the 
linchpin to this comprehensive system of justice in our 
country, and that is why strengthening its work and providing 
additional funding for the work that it does is so important.
    The Preamble to the U.S. Constitution states among the 
first enumerated functions of government that we are to 
establish justice. It is first. It is part of our fabric in 
this country, and we have to, it seems to me, at all levels of 
Government, certainly within the judiciary, certainly as the 
Senate, support it as best we can.
    You have heard some stories, and you talked earlier about 
putting a face on legal services. I have got lots of stories, 
but I know that we are short on time, and I will not tell you 
all of them. But I want to tell you about one from Texas just 
briefly, if I might, and that involves--you know about the 
Katrina disaster and so forth, but since 2005, LSC programs 
have closed more than 10,000 hurricane- related cases through 
the end of 2007. That is phenomenal work in light of a major 
disaster, and it just begins to tip the iceberg of the very 
hard work that field programs have been conducting not just in 
response to a disaster, but that is the kind of hard work you 
get from every field program in this country. Without that 
work, people will go hungry, people will be evicted, people 
will not get the benefits that they need that they are entitled 
to, that the Government provides for them and guarantees to 
each one of them. And that is why LSC needs the support, as 
much of it as you can give them, as much of it as we can give 
them on the State level, as much as we can do locally, as much 
as we can do in each individual community where poor people 
reside. And it is our responsibility as a government to do so. 
It is our responsibility as a legal profession to do. And we 
look forward to the partnership with the Senate in making that 
a reality.
    Thank you very much for your time this afternoon.
    [The prepared statement of Judge Livingston appears as a 
submission for the record.]
    Senator Cardin. Thank you for your testimony.
    Jo-Ann Wallace?

  STATEMENT OF JO-ANN WALLACE, PRESIDENT AND CHIEF EXECUTIVE 
     OFFICER, NATIONAL LEGAL AID AND DEFENDER ASSOCIATION, 
                        WASHINGTON, D.C.

    Ms. Wallace. Good afternoon, Senator, members of the staff. 
Good afternoon and thank you for the opportunity to speak to 
you today about the justice gap in America.
    NLADA, the National Legal Aid and Defender Association, is 
a national organization committed to equal access through the 
delivery of excellence and civil and defender legal services. 
Our members are civil and defender advocates who provide legal 
assistance to people who otherwise could not cannot afford 
attorneys, corporations, and others who care about equal 
justice.
    As has been stated, the Constitution recognizes that the 
establishment of justice is essential to the very creation of 
our Government. In passing the Legal Services Corporation Act, 
Congress recognized that there cannot be justice in America if 
a person's ability to access it depends on how much he can 
afford.
    The delivery system that was instituted more than three 
decades ago established the Legal Services Corporation as the 
linchpin of a national system. That model, which remains true 
today, is fundamentally sound. But as you have now heard 
repeatedly, by any measure it is woefully underfunded. Federal 
funding for LSC in effect has been reduced by over 53 percent 
from its 1980 level. State-based studies put the unmet need 
anywhere, as you noted, from 70 to 90 percent. At a minimum, 
one out of two people who need legal assistance must be turned 
away by LSC providers.
    While the dollars to support legal services have steadily 
decreased, the legal need, as you have heard, is increasing. 
Veterans returning, the mortgage lending crisis, the storms, 
the skyrocketing cost of life essentials are but some of the 
factors that are driving the need for services upward. In 
short, we are in a growth industry when it comes to demand and 
a recession when it comes to resources.
    But while running the numbers is alarming, the picture is 
even more sobering when we remember that every one of the two 
that gets turned away represents a person with a face and a 
name and a right to expect justice in our democracy.
    ``Collette'' was one of the lucky ones. When Hurricane 
Katrina struck New Orleans in August 2005, Collette lost her 
house and moved with her son, ``James,'' to stay with friends 
in Missouri. When that arrangement fell apart and Collette 
became homeless, the State took James and placed him in 
Missouri's foster care program.
    Determined to regain custody of her son, Collette moved to 
New Orleans, the only place she could call home. She 
successfully applied for a HUD grant, but the money, the grant 
money, was delayed for months. All the while Collette was 
traveling back and forth to St. Louis to attend custody 
hearings and to spend a few hours with her son, James. At each 
hearing Collette was asked, ``What progress have you made to 
rebuild your home?''
    So Collette began rebuilding her home herself, paying for 
materials gradually with wages that she earned from part-time 
jobs. When staff from Legal Services of Eastern Missouri 
learned of Collette's plight, they put her in contact with a 
State-based organization whose volunteers helped Collette to 
renovate and refurnish her home. They connected her with mental 
health services for trauma survivors. And, finally, they 
convinced the court that James belonged with his mother.
    Elsie Williams is another one of the lucky ones. Ms. 
Williams is a 70-year-old retired factor worker who lived on 
the $530 a month that she got from Social Security. So when the 
sofa bed that she had could not support her anymore, she did 
not have the money to replace it, and she could not afford the 
prosthetics that she needed as a cancer survivor. So for the 
first time in her life, Ms. Williams took out a loan.
    Ms. Williams could not read the fine print of the contract 
that she signed. She did not know that she had agreed to sign 
over her monthly checks to the loan company or to let them 
charge her a 95-percent interest rate on that loan and to tack 
on numerous other legal and illegal charges. And so she did not 
understand why, when she went to the bank in the next few 
months, her Social Security money was not there.
    But Ms. Williams found a young woman who had been willing 
to give up a job making more than $100,000 a year as a real 
estate attorney. She wanted to follow her dream to help people 
as an attorney with an Atlanta legal aid program. With the 
attorney's assistance, Ms. Williams got her Social Security 
checks back.
    As these stories illustrate, the efforts of legal aid 
lawyers support better life outcomes for millions of people, 
and as the last example also illustrates, those efforts often 
come with significant personal sacrifice. I cannot tell you the 
exact starting salary of that young attorney in Atlanta. What I 
can tell you is that she took a substantial pay cut to go work 
for legal aid.
    As a means of stretching scarce dollars to meet the ever 
growing demand for assistance, LSC programs have historically 
paid salaries that are the lowest of any sector of attorneys. 
Legal aid programs across the board this is true of. According 
to a 2006 report, the median salary for entry-level civil legal 
aid attorneys is a little more than $36,000. The lawyers making 
that entry-level salary usually face law school debt of between 
$80,000 and $120,000. The convergence of these factors has 
extracted a significant price over time due to costs of 
turnover and difficulty filling vacant position.
    NLADA is most appreciative of recent Federal legislation 
that attempts to address this problem, but that additional 
investment in the attorney work force must also be supported 
with increased Federal support for LSC if you want to ensure 
the availability of the next generation of lawyers dedicated to 
serving the public interest and also if you want to maximize 
the availability of funding for direct services.
    The final point I would like to make also goes to the issue 
of cost-effectiveness. Equal access to justice cannot be 
administered efficiently when Legal Services are not able to 
use the same tools and strategies that other lawyers use to 
serve their clients. Congress should remove those restrictions 
on legal aid attorneys that are inconsistent with the purposes 
of the LSC Act, starting with the restrictions upon the LSC 
programs, what they can do with State, local, and private funds 
available to them.
    In closing, I would like to thank the Committee again for 
shedding light on this important issue. We would urge Congress 
to recommit to equal access for justice by embarking on a 
course to expand funding and eliminate the restrictions that 
hamper the effectiveness of the public- private partnerships 
that are necessary to eliminate the justice gap.
    Thank you.
    [The prepared statement of Ms. Wallace appears as a 
submission for the record.]
    Senator Cardin. Thank you for your testimony.
    Mr. Wilhelm Joseph?

   STATEMENT OF WILHELM H. JOSEPH, JR., EXECUTIVE DIRECTOR, 
      MARYLAND LEGAL AID BUREAU, INC., BALTIMORE, MARYLAND

    Mr. Joseph. Good afternoon, Senator Cardin and staff 
gathered here, and thank you, Senator, for hosting the hearing, 
and thank you for your outstanding record of leadership on this 
issue in Maryland and now on the national level. And please 
allow me to convey, through you, my best wishes for the 
recovery and good will of Senator Kennedy. It is a particular 
honor for me to have been given this opportunity to appear 
before you.
    I am humbled to be presenting before this august body, to 
address you on a subject that is very personal for me. In 1965, 
I was a young man with a solid high school education and a 
burning desire to pursue a higher education. At that time I was 
living in Port of Spain, Trinidad, the place of my birth. I was 
a member of a very poor but proud family with a strong work 
ethic and without the funds to support furthering my education. 
Today I am here as a testament to the generosity and support of 
many individuals and institutions in this great country who 
extended a helping hand to me. For this I am deeply grateful. 
Starting with a track scholarship and other assistance later, I 
have earned an undergraduate degree from a historically black 
university, a law degree from a reputable university law 
school, and a graduate degree from one of this country's 
leading institutions. For this and many other blessings I am 
very grateful.
    Currently, I am most fortunate to be a member of a 
partnership in Maryland, the Legal Aid Bureau, whose mission is 
to provide the best civil legal assistance possible to low-
income persons. That partnership comprises the judiciary at all 
levels--the private bar, individuals and firms; the Maryland 
State Bar Association; governing bodies at the State, county, 
and city level; various funding sources including our IOLTA 
program, represented here today by Herb Garten and Susan 
Erlichman; the Maryland Legal Services Corporation; 
foundations; and, of course, the federally funded Legal 
Services Corporation.
    In Maryland, this partnership approach to addressing the 
civil needs of the State's low-income is encompassed in three 
letters of the alphabet: S for sensible, E for enlightened, and 
C for compassionate. Our work is motivated by a shared 
intolerance for injustice and a willingness to help others pick 
themselves up by their own bootstraps. In Maryland, we face the 
same challenges that have been already outlined here today and 
that have been clearly set forth in my written submission. That 
is the challenge of addressing overwhelming needs with too few 
resources. This is a national crisis. In my opinion, it 
requires a national response.
    In Maryland, we do leverage our LSC resources. We receive 
about $3.9 million from LSC. When I arrived in Maryland in 
1996, our total funding was $9 million, and the funding then 
from LSC was around the same three-point-something million. 
Today, in Maryland, our budget will be $22 million, a testament 
to that partnership I referred to earlier.
    Maryland Legal Aid Bureau represents the helping hand that 
catches thousands of vulnerable, unfortunate people before they 
fall off the precipice and through the trapdoors of 
circumstances that otherwise would cause them to fall into the 
quicksand of poverty and crisis, and go deeper and deeper.
    Our clients are people who have recently suffered setbacks, 
such as loss of a job, unexpected illness, disability. They are 
vulnerable children, victims of abuse and neglect, elderly 
citizens, victims of domestic and family fractures, and low-
wage workers.
    Allow me to offer one illustration. Let's take a look at a 
fairly common legal aid family, and I ask the staff, get a pen 
and a piece of paper. I want to take you through a very short 
exercise.
    Consider a family of three--two young children with one 
parent with a job that pays just above minimum wage, say $7 per 
hour. At that rate of pay, gross wages on 40 hours a week, 32 
weeks a year, would bring them $14,560--way below the LSC 
eligibility guideline for a family of three, which is at 
$22,000. After the compulsory deductions for Social Security, 
et cetera, that wage earner's take-home pay is closer to 
$13,000.
    Now, here is where the rubber hits the road. A quick look 
at a sample budget for that family will reveal the following: 
Rent, approximately $800 a month; food, $400 a month; child 
care, $400 a month; transportation, maybe $400, maybe a whole 
lot more with the gas prices; utilities, $150 per month; 
clothing, household repairs, et cetera, $150 per month. A very 
modest budget. Without health care being mentioned, those total 
expenses come to $2,300 per month, annually $27,600. Even with 
available subsidies for housing, food stamps, and utilities, 
this family will be in a crisis. Meeting $27,000 in expenses on 
a $13,000 budget is impossible. These people will try to 
survive by periodically failing to pay this particular bill or 
another--rent, utilities, et cetera.
    These choices have consequences that bring them to the door 
of legal services for help. These circumstances also create an 
environment that is more conducive to domestic violence, abuse, 
and even criminal behavior, in order to make ends meet. In 
Maryland alone, there are over 500,000 such persons trying to 
subsist below this level of poverty. In 2007, with the 
coalition and partnerships, the Legal Aid Bureau helped some 
53,000 of them. Combined with the efforts of other providers 
including over million pro bono hours rendered by private 
attorneys, we helped only a total of 101,000 persons with their 
civil legal needs statewide.
    Senator Cardin, we need a fundamental change at the 
national level with regard to this question, this crisis of 
justice in America. This crisis on a daily basis contributes to 
suffering, despair, hopelessness, and robs our community of the 
full potential of all the members who now subsist at 
intolerable and embarrassing levels. We need a substantial 
increase in financial resources to meet new regularly, steadily 
increasing costs of doing business, recruiting, training, 
retaining qualified staff, paying for rents, utilities, 
supplies, communication, equipment, furniture, et cetera. Help 
us to help others pick themselves up by the bootstraps. Help us 
to help those without boots.
    Thank you.
    [The prepared statement of Mr. Joseph appears as a 
submission for the record.]
    Senator Cardin. Thank you very much for your testimony and 
for your service.
    Mr. Kenneth Boehm?

  STATEMENT OF KENNETH F. BOEHM, CHAIRMAN, NATIONAL LEGAL AND 
             POLICY CENTER, FALLS CHURCH, VIRGINIA

    Mr. Boehm. Thank you. Good afternoon, Senator Cardin. My 
name is Ken Boehm, and I serve am the Chairman of the National 
Legal and Policy Center. From 1991 to 1994 I was Assistant to 
the President and Counsel to the Board of the Legal Services 
and prior to that headed the Department of Policy Development 
at Legal Services Corporation. It is an honor to appear before 
you today to share some of my views, which will be distinctly 
different than many of the other views you are hearing, but for 
that reason I especially want to present them.
    For today's topic, I would like to focus on two 
observations.
    First, we really are interested in closing the justice gap, 
and that is what we have to focus on, and closing that gap 
should involve a much broader approach than simply increasing 
the appropriation to a troubled Federal program by five-fold. 
As has been pointed out, page 19 of ``Documenting the Justice 
Gap in America,'' the 2005 legal needs study done by LSC, they 
recommended an increase to $1.6 billion, which is a fivefold 
increase.
    My second observation, which I will also get into a little 
bit, is that the Legal Services Corporation model has been 
plagued with many problems from the beginning, and if we are 
truly interested in solving this problem and not doing these 
incremental Band-aid approaches, we should think far beyond 
just giving extra money to the Legal Services Corporation.
    As I am sure you know, the Legal Services Corporation has 
not been authorized since 1980. That is when its first 
reauthorization expired. That is 28 years through Republican 
and Democrat Congresses, Republicans and Democrats in the White 
house, without reauthorization. That is almost unique for 
Federal programs to go that long without any kind of consensus 
for reauthorization, and there is a reason for that.
    Turning to ``Documenting the Justice Gap in America,'' the 
study, there are some limitations to it. It was done by LSC and 
the programs, and the conclusion was give us five times our 
budget and that will be a good start toward solving the 
problems. That is not unusual in Washington for programs that 
want more money to simply ask for more money and give a study 
that is tailor-made to show that would solve the problem. But I 
think we have to think far beyond that. We have to look at 
alternatives that, in fact, may be more cost-effective, 
alternatives that are already being done by market and other 
forces, alternatives to deliver justice not just to poor people 
but middle-class people who can't afford the growing costs of 
being involved in a civil lawsuit.
    It has been said here numerous times that LSC is the 
linchpin of providing legal assistance to the poor. It 
shouldn't be overlooked, the fact that for every 1 hour of 
service by a Legal Services Corporation-funded lawyer, there 
are 5 hours of pro bono, five private attorneys in private 
practice doing their responsibility, as they are supposed to be 
if they are in private practice. And so there are many other 
ways, of course, that legal services are given to the poor.
    Outside of contingency fee funds in cases of personal 
injury, we have a growing trend--that has actually happened 
over the last 20 years--for an increase in the jurisdictional 
dollar amount of cases in small claims court. As I said, it has 
already been happening, these cases. I am sure as anyone here 
who has spent any time in small claims court can say, they are 
fact-based. There is no lawyer generally needed.
    We also have seen a vastly greater increase in mediation, 
including mediation without lawyers, even though the American 
Bar Association feels that you should have lawyers in these 
mediation types of cases. And this is very, very helpful. 
People who study mediation say you get a faster result, it is 
more cost-effective. And sometimes the parties actually have a 
meeting of the minds--that is what mediation is all about--and 
you actually have a much better result on all fronts than if 
costly litigation is needed.
    Another area that needs to be looked at is increased use of 
ombudsmen. As somebody who has followed Legal Services' 
policies for the last 15 years, this is happening at the State 
level, at the local level, through the Older Americans Act. 
There is Federal funding for volunteer ombudsmen for long-term 
care. Many, many different examples. In European countries, 
developing countries, Japan, Australia, Canada, ombudsmen are 
widely used to develop justice. We should ask ourselves--we 
know we are the most over-lawyered country in the world with 
something approaching a million lawyers out there. How does the 
rest of developing world solve their legal problems if they do 
not have as many lawyers per capita as we do? Well, the way 
they solve them is they make many of these less serious legal 
problems, problems that can be solved in some way other than 
litigation and expensive lawyers, and we should look at those 
models.
    The key question is: Is our goal increased access to 
justice? Or is it just increased federally funded lawyers and 
lawsuits? The alternatives generally are faster. They are more 
cost-effective. And all too often the burden really falls--the 
burden of some of this litigation falls on other people who 
cannot afford it. I will give you a very brief example.
    A 70-year-old Ohio vegetable farmer named Russell Garber 
was sued by LSC-funded lawyers under a Federal law did not 
apply to small family farmers. As a matter of principle, he 
hired a lawyer to defend him. He couldn't afford a lawyer. He 
had to borrow and go into hock at age 70 to do it. The case was 
dismissed by a Federal judge in a strongly worded decision very 
critical of the Legal Services lawyers for bringing a case that 
did not apply in his instance. Instead of accepting their 
defeat, the lawyers from the Texas Rural Legal Assistance 
instead appealed to a three-judge panel. The three-judge panel 
affirmed the dismissal, and Mr. Garber won. His legal bill: 
$107,000.
    Now, I talked to Mr. Garber this morning just to see how he 
was doing 4 years after that. He was up at 5. He was doing his 
chores. He is not retiring. He has a $107,000 legal debt.
    My question is: Is that justice? We are supposed to be 
promoting justice, not just funding for a Federal program.
    There are better approaches. They are outside what was in 
this study. They are outside generally what the bar looks like, 
because a lot of them don't involve funding with lawyers. They 
involve other ways of justice, as I listed.
    The LSC model is deeply flawed. Not just have we had two 
fairly critical GAO reports just in the last year, there were 
two other back-to-back critical GAO reports in 1999 when GAO 
said they had widespread and significant problems with their 
case reporting. They were reporting to Congress. LSC disputed 
that and said, Oh, we have solved it, we have taken care of 
it--much as you have heard they have solved these GAO problems. 
GAO then did a second study in 1999 and found that they had not 
solved the problem, and their case numbers finally went way 
down because they were counting in one case, one program, 
10,000 phone calls by non-lawyers as ``legal cases.''
    Well, that is not fair to the taxpayer. It is not fair to 
poor people. And it is just not the way our Government should 
run.
    If you look at just the last 2 years--and we have 
documented hundreds of abuses over the years. But if you look 
at just the last 2 years, you have the back-to-back GAO 
investigations; you have a strained relationship with the LSC 
IG, and Congress. There have been three full-time LSC IGs prior 
to the current one. All three left after severe feuds with the 
LSC Board. The last one, Kirt West, was about to be fired 
before three Members of Congress--two Senators and a 
Congressman--wrote a letter to the LSC Board saying, ``Don't 
fire the IG while he is investigating you.'' That is a very, 
very--I do not know of any other Federal program that has had 
three consecutive IGs go out of business. They have had 
negative publicity based on use of limos, overpriced hotels. 
This was the Associated Press and CBS Evening News. These were 
not conservative critics. And, in fact, program lawyers, the 
ones that we have heard who operate on very, very low salaries 
and are really giving their all to the program, were appalled 
to see that Legal Services had limos for their board members 
and were paying for first-class air travel and all sorts of 
other thrills that really do not belong in a Federal anti-
poverty program.
    My only thought is as you look at ways to meet the legal 
needs of the poor, think beyond just let's pour more money on 
this program. Think to are there some structural changes that 
could be done that help all people, not just the poor--the 
middle class who can't afford lawyers, the Russell Garbers of 
the world who can't afford lawyers--help all people get access 
to justice.
    When the Framers said access to justice, they were not 
referring to Legal Services Corporation. That did not come 
until the 1970s. They wanted access to justice. I think what 
the Framers had in mind and what the saying on the Supreme 
Court facade means is we need to have a society with laws and 
institutions that allow people access to justice. And if that 
does not necessarily suit the needs of the American Bar or the 
Legal Services Corporation, well, I think we really should be 
after justice and not that.
    And as I say, if I could make one recommendation, it would 
be this: that there be a real study, perhaps an independent 
study, by leading thinkers, and there are some good books that 
have been published. Just recently, there is one out by a 
Stanford law professor that looks to these alternatives out 
there, and let's see if that isn't a more cost-effective way to 
deliver access to justice.
    Thank you very much.
    [The prepared statement of Mr. Boehm appears as a 
submission for the record.]
    Senator Cardin. Thank you very much for your testimony.
    Ms. Jeanette Franzel?

 STATEMENT OF JEANETTE FRANZEL, DIRECTOR, FINANCIAL MANAGEMENT 
 AND ASSURANCE, GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, 
                              D.C.

    Ms. Franzel. Good afternoon, Senator Cardin. I would like 
to ask that my written statement be submitted for the record.
    Senator Cardin. Without objection, all the written 
statements will be included in the record.
    Ms. Franzel. Thank you. I am very pleased to be here to 
discuss our recent GAO reviews that have been mentioned 
throughout this hearing on Legal Services Corporation's 
governance, accountability, and grants management practices.
    The Legal Services Corporation, or LSC, has the important 
mission of making Federal funding available to provide legal 
assistance in civil matters to low-income people throughout the 
United States. Today I will discuss LSC's organizational 
framework and funding and highlight the key findings from our 
August 2007 report on LSC's governance and accountability and 
our December 2007 report on LSC's grants management and 
oversight.
    The sum of these two reports represent a comprehensive, 
top-to-bottom review of the LSC structures and processes that 
are needed to increase assurance that LSC programs are carried 
out effectively and that funds are used in accordance with 
intended purposes.
    First, regarding LSC's framework and funding, LSC is a very 
unique organization. It was established by a Federal charter in 
1974 as a federally funded, private, nonprofit corporation. 
Despite its status as a private corporation, the vast majority 
of LSC's funding is from Federal appropriations. LSC uses its 
funding to provide grants to legal service providers, or 
grantees, who serve the low- income members of the community 
who need services. LSC received about $350 million in 
appropriations for fiscal year 2008 and has 137 different 
grantees.
    LSC distributes its funding to grantees based on the number 
of low-income persons living within a service area, so grantees 
are the entities actually spending the funds and providing 
legal services to clients. LSC management is responsible for 
ensuring that these grant funds are used for their intended 
purposes. Thus, LSC is responsible for its own activities and 
internal controls and for providing oversight and monitoring of 
grantees and their internal controls, their use of grant funds, 
and compliance with laws and regulations throughout their 
operations.
    LSC's Board of Directors plays a significant role in LSC's 
governance and is responsible for providing leadership and 
direction to LSC's management and overseeing LSC's operations. 
Since 1988, LSC has been under the oversight of an Office of 
Inspector General which has statutory authority to carry out 
audits and investigations of LSC programs, and LSC now has a 
new IG, as we have heard.
    In the areas of governance and accountability, we found 
that LSC's practices had not kept up with evolving reforms that 
have impacted other types of organizations. I do want to 
emphasize that LSC's board members did show active involvement 
in LSC oversight through their regular board meeting attendance 
and participation. Also, in our discussions with individual 
board members, we found them to be highly committed to their 
responsibilities and very receptive to the suggestions that we 
were making and the improvements that need to be made in 
governance.
    We made recommendations in the following areas to help 
strengthen LSC governance: establishing basic charters and 
responsibilities for the board and its key committees and 
putting those in writing; employing orientation, training, and 
performance assessment processes for the board and for its 
members; adding functions normally handled by boards of 
directors, such as audit committees, ethics committees, and 
compensation committees, to help oversee those areas impacting 
LSC's accountability and codes of ethics; and finally, very 
importantly, periodically evaluating key LSC management 
processes, such as risk assessment and mitigation, internal 
control, grantee oversight, and financial reporting.
    We also found that LSC management practices had not kept up 
with recent developments for other types of organizations. LSC 
management itself had not implemented a systematic or formal 
risk assessment process and had not established comprehensive 
policies or procedures regarding conflicts of interest and 
ethics. In addition, LSC had not established a continuity of 
operations program.
    In the area of grants management and oversight, which is 
really the heart of where LSC funding is applied in LSC 
operations, we found weaknesses that left grant funds 
vulnerable to misuse. Specifically, we found that the scope of 
LSC's monitoring of grantees' fiscal compliance was limited. In 
addition, LSC did not use a structured or systematic approach 
for assessing risk across its 137 different grantees in order 
to guide the timing and scope of grantee visits and oversight 
activities.
    We also found that oversight feedback to grantees was often 
slow. As of September 2007, LSC had not yet issued reports to 
10 of the 53 grantees that it had visited during 2006. Without 
such communication, grantee managers do not have information 
that they need about deficiencies and corrective actions that 
are needed to help protect their activities in their own 
program.
    We also found poor fiscal practices and improper 
expenditures at 9 out of the 14 grantees that we visited, and I 
would like to stress that these were very limited reviews that 
we did. During our limited reviews, we identified issues that 
LSC could have identified with more effective oversight. We 
found systemic issues involving payments that were made without 
sufficient supporting documentation, and in those cases, it was 
impossible for us to determine whether the expenditures were 
accurate, allowable, or appropriate.
    We also found improper expenditures and potentially 
improper expenditures at grantees using grant funds, including 
travel expenses, loans to employees, alcohol purchases, 
lobbying fees, questionable contractor payments, and improper 
use of LSC funds resulting from a real estate transaction.
    As a result of our review, we made a total of nine 
recommendations to LSC's board and eight recommendations to LSC 
management. Both LSC's board and management expressed a 
commitment to taking corrective action to implement our 
recommendations. LSC's most recent progress report indicates 
that it is starting to take action on many of our 
recommendations and is planning action on the rest. LSC plans 
to provide us with a final update by September 1, 2008, and we 
look forward to receiving that report and reviewing LSC's 
progress.
    I want to emphasize, however, that some of these corrective 
actions will take time to fully and properly implement, and 
many of these actions will need to be continually evaluated 
through an LSC ongoing risk assessment and monitoring process, 
which we are recommending also be put in place.
    In conclusion, LSC serves a key mission, which is being 
highlighted during the current period of economic hardship for 
many workers and their families who need legal services they 
could not otherwise afford. Effective governance, internal 
controls grantee oversight, and diligent and proper performance 
by grantees are all critical to LSC's mission, the effective 
use of its appropriated funding, and its ability to serve the 
legal needs of low-income people. Maintaining sound internal 
controls and governance will be key to maintaining trust and 
credibility of LSC's mission and operations going forward.
    That concludes my statement, and I would be happy to answer 
any questions that you have.
    [The prepared statement of Ms. Franzel appears as a 
submission for the record.]
    Senator Cardin. Thank you very much.
    Ms. Rebekah Diller?

STATEMENT OF REBEKAH DILLER, DEPUTY DIRECTOR, JUSTICE PROGRAM, 
BRENNAN CENTER FOR JUSTICE, NEW YORK UNIVERSITY LAW SCHOOL, NEW 
                         YORK, NEW YORK

    Ms. Diller. Thank you, Senator Cardin. On behalf of the 
Brennan Center for Justice, I would like to thank you for 
holding this hearing today and permitting me to testify. The 
Brennan Center for Justice is a nonpartisan think tank and 
advocacy organization, and for the last 10 years, we have been 
deeply involved through litigation, research, and advocacy in 
promoting equal access to the courts.
    I am going to depart from my written testimony a bit and 
just speak about some of the issues that have come up during 
this panel.
    First, I would just like to say that I agree with Mr. Boehm 
that certainly we can look at other models for closing the 
justice gap and for improving access to courts in this country. 
I think expanding small claims court jurisdiction and things 
like that are very useful. But I think we have to be very 
honest that that is just not going to close the justice gap.
    When you look at the types of cases that legal services 
programs handle, primarily housing court cases, family court 
cases, those are cases where the other side has a lawyer, and 
in order for there to be any type of fairness in the 
proceeding, the legal services client needs to have a lawyer as 
well. So we can talk about these other matters that may 
complement efforts here to close the justice gap, but they are 
simply not going to fix the fact that when you have one side 
represented, if the other side is not represented, you have a 
very unfair proceeding.
    One study that I cite in my testimony found that when a 
side is represented by a lawyer, they are five times more 
likely to prevail in litigation than when they are 
unrepresented, so that gives you a sense of the real difference 
that a lawyer makes.
    The other thing I will just address is the fact that the 
justice gap study, while it was produced by the Legal Services 
Corporation, is consistent with every other study and in some 
ways understates the problem that every other study has found 
about the legal needs of low-income people going unmet. So it 
is not just LSC studies. It is the study of every access-to-
justice commission that looks at the issue.
    The Brennan Center itself I can tell you did a study on a 
local level where we looked at New York City housing court and 
we looked at how many tenants were represented, and we found 
that 76 percent were unrepresented, and that is in contrast to 
the landlord side of the proceedings where most observers 
estimate that about 90 percent have a lawyer. So the fact that 
low-income people go unrepresented is pretty irrefutable.
    The other thing I will just note is that when you look at 
how the U.S. compares to other developed countries, it is very 
interesting, because while I am not really able to speak to the 
number of lawyers or lawsuits, what I can tell you is that we 
fall way behind in terms of funding for civil legal aid. 
England spends about 11 times as much per capita on legal 
services as we do; Germany and France spend about as 2 times as 
much. So while there may be fewer lawsuits or lawyers, 
certainly when low-income people have legal needs there, they 
are much more likely to be represented.
    The other thing I will just say is that to the extent that 
there is an assumption that, you know, somehow there is a self-
interested effort here by lawyers to generate more business for 
lawyers, I think the salary quotes that we have heard from 
several witnesses really underscore the fact that no one is 
going into the legal services business for the money. So if we 
were really here for an effort to generate business for lawyers 
and provide funding for more and more lawyers just for that 
sake itself, we would not be talking about legal services. 
People go into legal services because they want to do good 
work, and they often do so at great financial sacrifice.
    The other thing I will address here today is one step that 
the Congress could take which would not cost a penny, but I 
think would go pretty far toward helping improve the justice 
gap problem that we have talked about, and that is to eliminate 
the restriction on State, local, and private funds that is 
attached to the LSC appropriation every year. We have talked a 
lot about the involvement of State and local governments as 
partners, of IOLTA programs as partners, of private donors as 
partners. But what the Federal Government has done is it has 
said to local nonprofit organizations, if you take one penny of 
our money, we are going to restrict how all your other funds 
are spent.
    This is way out of line with how every other Federal 
grantee is treated. The normal course is to certainly restrict 
how Federal funds are spent, but not to tell grantees and 
others, like State governments, how they can spend their funds.
    What is happening as a result of this restriction is that 
the Federal Government is actually deterring partners from 
getting involved in the civil legal aid delivery system, 
deterring private funders from giving to legal aid programs 
because their funds will be restricted. It is deterring State 
governments and State actors from contributing to LSC-funded 
grantees. And it is also creating waste in the system. I will 
give you an example from Oregon.
    Oregon State justice planners did not want their State 
funds to be restricted by the Federal Government, so they set 
up two systems of legal aid delivery that run parallel to each 
other. That means two sets of rent payments ever month, two 
sets of computer networks, copy machines. All the overhead that 
one office has now has to be borne by two offices. And the 
programs there calculated that if they did not have to operate 
separately due to the restriction on State, local, and private 
funds, they would save about $300,000 a year. That same 
$300,000 a year could go toward opening a new office in an 
underserved rural area of the State and serving more clients in 
their bread and butter legal services needs.
    We have seen the impact of this restriction in particular 
in the subprime crisis and in efforts to defend homeowners 
against predatory lenders. One of the things it does is it 
tells legal services attorneys that they can't seek attorneys' 
fee awards even when such awards have been authorized by 
consumer fraud statutes. And this means that their bargaining 
power is reduced when litigating in these cases. Wrongdoers do 
not have to pay fees that have been authorized by statute. And 
they are also depriving programs of potentially another source 
of revenue that could go to serve yet more homeowners in need 
of help.
    I will stop there and take any questions.
    [The prepared statement of Ms. Diller appears as a 
submission for the record.]
    Senator Cardin. Thank you for your testimony, and I thank 
all six of you for your testimony. It certainly helped complete 
our record here. Both Ms. Diller and Ms. Wallace spoke about 
the restrictions in the LSC law, which I am glad you both 
mentioned. It just seems to me that there are easier ways for 
priorities to be determined than putting legal restrictions in 
the statute itself.
    You went through, Ms. Diller, a list of the restrictions 
and mentioned them. Did you mention them in priority order? Do 
you believe that outside funding is the most problematic 
restriction that LSC has? Or just there is no rhyme or reason 
to the list?
    Ms. Diller. Well, I would say the restriction on other 
funds is the most problematic because of the way that it ties 
up the money that comes from other sources, the way it distorts 
the planning that local communities can do about how they 
construct civil legal aid delivery systems. It deters other 
funds from coming into the system. So I do think that is the 
most problematic, and I would just point out that to the extent 
Congress has concerns about how its money is spent, it can 
certainly regulate that. But this is really outside the norm 
with the way that any other nonprofit grantee type of 
organizations are treated.
    Senator Cardin. Ms. Wallace, you mentioned that same 
restriction. I do not believe you mentioned other restrictions. 
Is that the area that you think is the most important for 
Congress to take a look at?
    Ms. Wallace. We agree that the restrictions generally 
present problems, but certainly agree that that particular 
restriction is one of the most problematic, and it is one of 
the ones that should be prioritized for a number of reasons. If 
we really are going to close the justice gap, we need to make 
the partnerships that are going to be required to do that as 
effective as possible. And that restriction really does hamper 
our ability to do that and hampers programs' abilities to do 
that. Not only that, but as was pointed out, we think that it 
is a pretty easy fix. So that is a good place to start.
    Senator Cardin. Mr. Boehm, you talked a little bit, 
particularly in your statement, about the advantages of pro 
bono. Do you favor a requirement that all lawyers participate 
in pro bono?
    Mr. Boehm. I would think there would be constitutional, if 
not ethical, problems with requiring it. It is a duty of the 
profession, and the profession--I think you have to look at a 
profession as a regulated monopoly, and people who are able to 
practice law privately have a responsibility. It comes with the 
very notion of a profession. And I think this should be every 
kind of suasion short of absolute requirement to the degree 
they should be publicly shamed if they do not, if they are in 
private practice and offering that. And I think also, by the 
way, lawyers who work for the Federal and State governments, 
lawyers who now have problems doing that sort of thing, should 
be allowed to do it. And I think there ought to be a waiver for 
certain types of legal services when attorneys who are in 
different States from which they were admitted to the bar would 
like to do some volunteer work. Right now, you have to be 
admitted to the bar, which can be a problem in some cases.
    Senator Cardin. You raise some very legitimate points, but 
if we could work out the issues that you have referred to, 
would you favor a legal, enforceable obligation for attorneys 
to participate in pro bono, with the caveats that you have 
already mentioned, and others?
    Mr. Boehm. Yes, the main one is that if you force somebody 
to do that, it almost gets to--I have seen this debated. This 
has been debated by leading people on both sides. The 
Federalist Society had a series of debates. Mr. Alex Forger, 
who is the former LSC president, took the position it should be 
legally enforceable.
    I think there are a lot of steps you can take right up to 
that line that go very, very close to requiring it, and a 
number of States have done it. I will give you some very quick 
examples. There is increased reporting requirements. In some 
States you have to go into great detail. Certain firms have 
made it firm policy. There is any number of things you can do, 
and there are some proposals, there are policy proposals out 
there for certain types of tax credits in a very limited way to 
further increase pro bono.
    There is no shortage of lawyers per se. There is a shortage 
of pro bono.
    Senator Cardin. Judge Livingston, why hasn't the bar 
association taken a more affirmative view on the requirements 
for pro bono?
    Judge Livingston. I think they have, in fact. I think that 
there are a number--
    Senator Cardin. To make it mandatory. They have not taken 
steps to try to make it mandatory.
    Judge Livingston. They have not taken steps to make it 
mandatory for some of the reasons that Mr. Boehm has pointed 
out and more practical ones, perhaps, about lawyers not 
feeling--feeling an obligation, certainly, to the profession 
and to the community to participate in pro bono, but I don't 
know that involuntary servitude is really the way to go. At 
least, that has been the argument framed by some in this 
debate. I disagree with that. I think that we could certainly 
do--
    Senator Cardin. When I got out of law school--
    Judge Livingston.--more than we are doing.
    Senator Cardin. When I got out of law school and walked 
past a courtroom, a judge grabbed me and said I would handle 
this case. I guess I could have told the judge no if I never 
wanted to go before his court again. But I handled the case. Is 
that--
    Judge Livingston. Let me suggest--
    Senator Cardin.--involuntary servitude?
    Judge Livingston. I don't think it is. I mean, I am in 
favor of mandatory pro bono personally. But I will tell you 
that as a representative of the profession, it is not a popular 
notion.
    I will also tell you, though, that the profession has 
certainly stepped up. I bet when you went to law school that 
law firms, big law firms that are paying these top- dollar 
salaries that are elusive to legal aid lawyers, those law firms 
traditionally have not allowed billable hour credit for pro 
bono work. Now that is a reality. So that is one very simple 
way that law firms have been responsive and have been out front 
encouraging the associates in their firms to participate in pro 
bono.
    There are a number of initiatives in every State and local 
bar association that I am familiar with that not only 
encourages pro bono, but actively recruits pro bono lawyers, 
they participate in the pro bono organized activities of the 
bar. They have--we just left Minneapolis at the Equal Justice 
Conference, which used to be called the ``pro bono 
conference,'' where there were a number of strategies discussed 
about ways that you can increase the interest among lawyers in 
doing pro bono, in actually helping them in carrying out their 
pro bono responsibilities as members of the profession. And 
there are just untold and millions and millions of examples of 
the profession stepping up to the plate to take this 
responsibility, not just in doing it but in reporting it and 
encouraging young lawyers in their firms to do so as well. It 
is an effort that we take seriously.
    Senator Cardin. The results are inconsistent among the 
States.
    Judge Livingston. I am sorry?
    Senator Cardin. It is inconsistent among the States.
    Judge Livingston. It is definitely inconsistent. It is 
inconsistent in communities within a State.
    Senator Cardin. That is true also. There have been more 
aggressive steps taken in some State over other States. I am 
not aware, though--maybe I am wrong about this--that the 
American Bar Association has taken a firm position that there 
is an obligation for attorneys to handle pro bono, that there 
should be reporting requirements in every State, that there 
should be specific programs in law schools to sensitize lawyers 
to enter pro bono programs. There is a whole list of things 
that they have done. I am not aware that the ABA has actually 
come out and said that every State should adopt these or try to 
make this a standard practice within the canons of ethics of 
attorneys.
    Judge Livingston. Well, the canons of ethics that our 
association recommends do include taking the responsibility 
seriously and certainly encourages it. The Center for Pro Bono 
is one example of that. There is information in my written 
remarks about a website reference that you can go to to find 
out about all the initiatives going on at the Center for Pro 
Bono.
    So there are a number of efforts, and I would say--I never 
want to disagree with a Senator, but I would certainly want to 
say that the association is on record absolutely encouraging 
States, encouraging State bar associations, encouraging local 
bar associations, and encouraging every single lawyer that is a 
member of the profession, certainly a member of the 
association, to engage in pro bono activities and to report 
that.
    Senator Cardin. Well, there is a big difference between 
encouraging and taking it to the line, and I would suggest 
beyond the line that Mr. Boehm is suggesting, in which you have 
the information in front of you about every attorney in your 
State as to what they are doing. And that is what we do in 
Maryland. Every lawyer must report their pro bono activities. 
If you want to practice law in Maryland, you have got to do 
that.
    Judge Livingston. Fabulous.
    Senator Cardin. Well, why doesn't the bar association work 
to require that in every State?
    Judge Livingston. Well, I think that--
    Senator Cardin. My point is this. My point is this. The 
request is being made for the Federal Government through the 
taxpayer support to provide a greater level of activity to meet 
this gap. I support that. But the bar association also must 
take this to the next level. This is a partnership.
    Judge Livingston. I agree.
    Senator Cardin. I will not forget the lesson I learned from 
Governor Schaefer when I went to him and asked him for more 
State money. The first question he asked me: ``What are the 
lawyers doing?'' I think that is a legitimate question.
    Judge Livingston. I agree.
    Senator Cardin. And I happen to agree with the point that 
pro bono is a very, very valuable part of filling this gap.
    Judge Livingston. I totally agree.
    Senator Cardin. We need to do a lot more.
    Judge Livingston. I totally agree. I don't disagree with 
anything you said about how lawyers have to step up. What I am 
telling you, Senator, is that lawyers have stepped up. That 
does not mean we can't step up further. It does not mean we 
can't take a more active role. It does not mean we can't be 
more aggressive. The American Bar Association is totally 100 
percent committed to all of the efforts that you have outlined, 
all of the suggestions that have been made here today, and this 
is not the only forum that we have heard them, certainly. And 
we will certainly look at all of those. We have been looking at 
them. That is what the Center for Pro Bono does. That is what 
the Pro Bono Committee does. That is a very important committee 
of the association. We recognize at annual awards ceremonies 
the work of pro bono lawyers throughout the country in local 
bars, in State bars, that are doing just enormous--giving an 
enormous effort of their time and energy and staff time and 
money toward this effort. And so lawyers do take this 
responsibility seriously, the association takes this 
responsibility seriously.
    And while I agree that certainly more could be done, I want 
you to understand and appreciate the fact that the association 
is doing quite a bit to promote pro bono and to encourage pro 
bono among all of the members of the profession.
    To the extent that we can do more, we will take that 
challenge and continue to work on it with your recommendations 
in mind.
    Senator Cardin. Thank you. I appreciate that response. I 
really do.
    Our commission came out with a recommendation for mandatory 
pro bono, and I thought it was an ethical commission, Mr. 
Boehm. I did not think we were trying anything that was 
unconstitutional or unethical.
    Ms. Franzel, is there anything more that you would like to 
see from the Legal Services Board in regards to how they are 
reacting--I know you want to see the final products, but is 
there anything that is of concern to you as to how they are 
currently responding to your request? I know that you have not 
completed the information, but are they on track to responding 
to the suggestions that you have made?
    Ms. Franzel. Yes. I am very encouraged by the response. I 
do want to caution that many of the really difficult 
initiatives are in the planning stages or the initial stages, 
and so it will be really important to take a look at things 
like risk assessments and grantee oversight--those are the big-
ticket items--and take a look at them over the next year or so.
    Some of the other structural issues can be taken care of 
very quickly, such as restructuring the board and its 
responsibilities, and I am very pleased to see that those are 
already in process. And, of course, we will want to see how all 
of this is implemented.
    Senator Cardin. Thank you.
    Mr. Joseph, on the salary levels, I haven't check the legal 
service--the Legal Aid Bureau as to their salaries recently. 
Are you having trouble in retaining attorneys? Is there a major 
gap in Maryland on the payment to legal aid attorneys versus 
other areas of public interest law? I know we are not competing 
with the large law firms, but in other areas of public interest 
law.
    Mr. Joseph. All of the above. Generally in Maryland we are 
very aggressive about that. In 1996, our starting salary for 
lawyers was $25,000 a year, and it had been frozen for 7 
straight years. A lawyer who worked there for 7 years--and we 
had many--had not gotten a single penny increase. This year, we 
are starting lawyers at $45,200. But even that puts us between 
$9,000 and $10,000 behind the State attorney--I know because my 
daughter works there--behind the Attorney General, behind 
public defenders. And what happens is that we are aggressive 
about recruiting the most committed and the most competent. And 
as soon as they show their wares in the public, they get 
recruited and folks try to snatch them, and they go.
    So it is a difficulty. We do things to try to compensate 
for that. We have a nice liberal vacation schedule. We try to 
give leave for child care, different innovative ways to compete 
in the marketplace.
    I think Mr. Boehm doesn't really understand what it is to 
run a legal aid program. It is a business. We have 300 
employees, 140 lawyers, 13 physical locations around Maryland. 
We can't rely on $3.9 million from the Legal Services 
Corporation, so we have hundreds of individual contributors. We 
have to have a program observing that. We have lawyers who form 
a separate Equal Justice Council, lawyers from all the big law 
firms and small law firms. All they do is raise money for legal 
aid. We have pro bono hours being donated. Yet we touch a 
little piece of the need out there.
    I think I demonstrated that when you live on a budget of 
poverty, every single day, every year, you will have the need 
for advice, for counsel, and sometimes representation. Mr. 
Boehm waved his hand at numbers, about somebody who got a small 
piece of information on the phone. Let me tell you, sometimes a 
piece of information that lasts 1 minute can give you the peace 
of mind that makes a difference in your life. Rich clients know 
it, too. They call their lawyers to get one piece of advice, 
and poor folks do it, too.
    I support all the GAO ideas of efficiency and improvement. 
I support all the ideas of alternatives. We have mediation, we 
have everything. We still don't meet it. This is a serious 
crisis. The magnitude in numbers of people living in poverty is 
overwhelming. The frequency of the need for legal services is 
overwhelming. The complexity of the issues. I don't want a 
patent lawyer handling a complex housing issue. I don't want an 
entertainment lawyer trying to navigate complex Medicaid rules. 
No. It is going to be a very difficult time matching skills and 
need in a time-specific situation.
    Senator Cardin. Thank you for that response. By the way, I 
want you to engage the private community in the funding of 
legal aid. I want the law firms involved in the funding of 
legal aid. I think that is a healthy situation. And I think it 
is a lot easier to get the law firms and the private sector 
involved when the Government is a partner and the Government is 
a meaningful partner. And when you see the erosion of the 
Government support, it, I think, makes it more difficult to get 
the other partners to contribute and to provide the pro bono 
services that are necessary in order to meet the access-to-
justice issues. So I want to see all the players, and that is 
why I do believe the bar must figure out new ways to energize 
lawyers to help fill this gap, because lawyers do have a 
special responsibility here. I do believe it is an ethical 
issue for attorneys to be involved in pro bono activities, and 
the failure to do so to me is an ethical violation of the oath 
of an attorney.
    Let me again thank you all for your help on this panel. I 
can assure you there is tremendous interest on this Committee. 
I have talked to most of the members of the Committee, and they 
are very much interested in getting involved as we try to 
develop strategies to meet this gap. There is not a uniform 
position here. There are different views. But I think there is 
a genuine desire to close this gap. And we certainly will be 
working very closely with the Health and Education Committee 
and with the House Committees to try to develop a strategy.
    Clearly, this needs more legislative attention, and I am 
hopeful that as Congress goes through the remainder of this 
year and next year, we will look toward ways that we can 
elevate the effectiveness of the Federal participation in these 
programs, obviously through additional resources, but we think 
there may be other ways that we can be helpful.
    The record will remain open for 1 week for additional 
materials. I ask the witnesses to respond to members' questions 
in a timely manner if they are submitted by the members of this 
Committee, and without objection, statements from Senators 
Leahy and Feingold will be included in the record.
    The Committee will stand adjourned. Thank you.
    [Whereupon, at 4:15 p.m., the Committee was adjourned.]
    [Questions and answers and submissions for the record 
follow.]
    [Additional material is being retained in the Committee 
files.]

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