[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                  CIVIL ACCESS TO JUSTICE ACT OF 2009

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   COMMERCIAL AND ADMINISTRATIVE LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                                   ON

                               H.R. 3764

                               __________

                             APRIL 27, 2010

                               __________

                           Serial No. 111-87

                               __________

         Printed for the use of the Committee on the Judiciary


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




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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. ``BOBBY'' SCOTT, Virginia  HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            DANIEL E. LUNGREN, California
MAXINE WATERS, California            DARRELL E. ISSA, California
WILLIAM D. DELAHUNT, Massachusetts   J. RANDY FORBES, Virginia
STEVE COHEN, Tennessee               STEVE KING, Iowa
HENRY C. ``HANK'' JOHNSON, Jr.,      TRENT FRANKS, Arizona
  Georgia                            LOUIE GOHMERT, Texas
PEDRO PIERLUISI, Puerto Rico         JIM JORDAN, Ohio
MIKE QUIGLEY, Illinois               TED POE, Texas
JUDY CHU, California                 JASON CHAFFETZ, Utah
LUIS V. GUTIERREZ, Illinois          TOM ROONEY, Florida
TAMMY BALDWIN, Wisconsin             GREGG HARPER, Mississippi
CHARLES A. GONZALEZ, Texas
ANTHONY D. WEINER, New York
ADAM B. SCHIFF, California
LINDA T. SANCHEZ, California
DEBBIE WASSERMAN SCHULTZ, Florida
DANIEL MAFFEI, New York
[Vacant]

       Perry Apelbaum, Majority Staff Director and Chief Counsel
      Sean McLaughlin, Minority Chief of Staff and General Counsel
                                 ------                                

           Subcommittee on Commercial and Administrative Law

                    STEVE COHEN, Tennessee, Chairman

WILLIAM D. DELAHUNT, Massachusetts   TRENT FRANKS, Arizona
MELVIN L. WATT, North Carolina       JIM JORDAN, Ohio
DANIEL MAFFEI, New York              HOWARD COBLE, North Carolina
ZOE LOFGREN, California              DARRELL E. ISSA, California
HENRY C. ``HANK'' JOHNSON, Jr.,      J. RANDY FORBES, Virginia
  Georgia                            STEVE KING, Iowa
ROBERT C. ``BOBBY'' SCOTT, Virginia
JOHN CONYERS, Jr., Michigan
JUDY CHU, California

                     Michone Johnson, Chief Counsel

                    Daniel Flores, Minority Counsel


                            C O N T E N T S

                              ----------                              

                             APRIL 27, 2010

                                                                   Page

                                THE BILL

H.R. 3764, the ``Civil Access to Justice Act of 2009''...........     3

                           OPENING STATEMENTS

The Honorable Steve Cohen, a Representative in Congress from the 
  State of Tennessee, and Chairman, Subcommittee on Commercial 
  and Administrative Law.........................................     1
The Honorable Trent Franks, a Representative in Congress from the 
  State of Arizona, and Ranking Member, Subcommittee on 
  Commercial and Administrative Law..............................    28
The Honorable John Conyers, Jr., a Representative in Congress 
  from the State of Michigan, Chairman, Committee on the 
  Judiciary, and Member, Subcommittee on Commercial and 
  Administrative Law.............................................    29
The Honorable Melvin L. Watt, a Representative in Congress from 
  the State of North Carolina, and Member, Subcommittee on 
  Commercial and Administrative Law..............................    30

                               WITNESSES

The Honorable Robert C. ``Bobby'' Scott, a Representative in 
  Congress from the State of Virginia
  Oral Testimony.................................................    33
  Prepared Statement.............................................    41
The Honorable Tom Harkin, a United States Senator from the State 
  of Iowa
  Oral Testimony.................................................    47
  Prepared Statement.............................................    51
Mr. John G. Levi, Chairman, Board of Directors, Legal Services 
  Corporation
  Oral Testimony.................................................    55
  Prepared Statement.............................................    58
Mr. Jeffrey E. Schanz, Inspector General, Legal Services 
  Corporation
  Oral Testimony.................................................    67
  Prepared Statement.............................................    69
Mr. Kenneth F. Boehm, Chairman, National Legal and Policy Center
  Oral Testimony.................................................    88
  Prepared Statement.............................................    91
Ms. Rebekah Diller, Deputy Director, Justice Program, Brennan 
  Center for Justice at NYU School of Law
  Oral Testimony.................................................   105
  Prepared Statement.............................................   107

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable Henry C. ``Hank'' Johnson, 
  Jr., a Representative in Congress from the State of Georgia, 
  and Member, Subcommittee on Commercial and Administrative Law..    31
Material submitted by the Honorable Robert C. ``Bobby'' Scott, a 
  Representative in Congress from the State of Virginia, and 
  Member, Subcommittee on Commercial and Administrative Law......    35
Material submitted by the Honorable Robert C. ``Bobby'' Scott, a 
  Representative in Congress from the State of Virginia, and 
  Member, Subcommittee on Commercial and Administrative Law......   136
Material submitted by the Honorable Trent Franks, a 
  Representative in Congress from the State of Arizona, Member, 
  Committee on the Judiciary, and Ranking Member, Subcommittee on 
  Commercial and Administrative Law..............................   139

                                APPENDIX
               Material Submitted for the Hearing Record

Response to Post-Hearing Questions from John G. Levi, Chairman, 
  Board of Directors, Legal Services Corporation.................   152
Response to Post-Hearing Questions from Jeffrey E. Schanz, 
  Inspector General, Legal Services Corporation..................   168
Response to Post-Hearing Questions from Kenneth F. Boehm, 
  Chairman, National Legal and Policy Center.....................   201
Response to Post-Hearing Questions from Rebekah Diller, Deputy 
  Director, Justice Program, Brennan Center for Justice at NYU 
  School of Law..................................................   217
Material submitted by the Honorable Trent Franks, a 
  Representative in Congress from the State of Arizona, Member, 
  Committee on the Judiciary, and Ranking Member, Subcommittee on 
  Commercial and Administrative Law..............................   237
Material submitted by the Honorable Steve Cohen, a Representative 
  in Congress from the State of Tennessee, and Chairman, 
  Subcommittee on Commercial and Administrative Law..............   249
Material submitted by Rebekah Diller, Deputy Director, Justice 
  Program, Brennan Center for Justice at NYU School of Law.......   335


                  CIVIL ACCESS TO JUSTICE ACT OF 2009

                              ----------                              


                        TUESDAY, APRIL 27, 2010

              House of Representatives,    
                     Subcommittee on Commercial    
                            and Administrative Law,
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 11:08 a.m., in 
room 2141, Rayburn House Office Building, the Honorable Steve 
Cohen (Chairman of the Subcommittee) presiding.
    Present: Representatives Cohen, Conyers, Watt, Johnson, 
Scott, Chu, Franks, and King.
    Staff present: (Majority) Norberto Salinas, Counsel; Adam 
Russell, Professional Staff Member; and Justin Long, Minority 
Counsel.
    Mr. Cohen. This hearing of the Committee on the Judiciary, 
Subcommittee on Commercial and Administrative Law will now come 
to order.
    Without objection, the Chair will be authorized to declare 
a recess of the hearing. I now recognize myself for a brief 
statement.
    During the last session, October 2009, this Subcommittee 
held a hearing on Legal Services Corporation. Witnesses 
testified about Legal Services Corporation implementing 
recommendations made by the Government Accounting Office to 
improve corporate governance and internal controls within the 
Legal Services Corporation and the need for increased funding 
for Legal Services to help it fulfill its mission.
    Witnesses also briefly discussed H.R. 3764, the ``Civil 
Access to Justice Act,'' which will reauthorize the Legal 
Services Corporation.
    This morning we meet to discuss and have more detailed 
conversations about H.R. 3764 in particular, legislation which 
a majority of the Subcommittee and myself are co-sponsors.
    First, as we learned at the October 2009 hearing, during 
this economic downturn grantee programs have increased 
significantly in the requests that they have received for legal 
services. They have seen more families and individuals hard hit 
in this economy ask for legal assistance to obtain public 
benefits and to fend off home foreclosures.
    Members of the Subcommittee are well aware of the impact 
that foreclosures have on our communities and the national 
economy. Unfortunately, many of legal services' programs have 
not been able to meet the growing urgency.
    According to the 2009 report in support of the anecdotal 
evidence of our witnesses at the October hearing, not all 
eligible potential clients of LSC-funded programs are receiving 
the legal assistance they so desperately need.
    In fact, the former president of LSC, Helaine Barnett, 
testified that for every three people requesting help, LSC only 
funded one, turning two out of three people away. Lack of 
sufficient funding is the reason.
    The Civil Access to Justice Act of 2009 attempts to fill 
that void for these families and for others who need legal 
assistance. It would authorize LSC, which was last authorized--
reauthorize it--over 30 years ago.
    It would authorize a much needed increase in funding to 
$750 million, which would help LSC support more legal service 
attorneys, providing assistance to the growing poor in our 
country, a fact that we see every day as the--and the disparate 
amount of wealth between the rich and the poor grows and grows 
and grows with the awful end of the 110th Congress--President's 
economy.
    The bill makes an additional change, one which may have a 
substantial impact. It would allow LSC-funded programs to 
utilize non-Federal funds more efficiently by removing some of 
the current restrictions limiting legal aid programs. This 
change by itself would infuse legal aid programs with millions 
of additional dollars.
    For example, the Oregon Legal Center has calculated that 
eliminating the restriction on the use of non-Federal funds 
would result in $300,000 of savings, money currently spent on 
unnecessary administrative overhead for separate programs.
    The Civil Access to Justice Act does more than just provide 
legal assistance to our neighbors in need. At the end of the 
October 2009 hearing we were assured that implementing these 
recommendations made by the GAO will prevent the misuse of 
taxpayer funds.
    These recommendations attempt to strengthen Legal Services' 
governance practices, improve oversight within LSC and improve 
management practices. I applaud Legal Services Corporation in 
implementing the recommendations, and to guarantee that these 
recommendations are implemented--the Civil Access to Justice 
Act codifies them.
    Perhaps we can do even more to protect taxpayer funds. In 
his written testimony for today's hearing, the inspector 
general suggests we make several changes. These changes prevent 
and detect waste, fraud, abuse, and improve effectiveness, 
efficiency and economy of Legal Services' programs.
    I look forward to hearing the inspector general's testimony 
and that of the other witnesses to determine what changes they 
believe may be appropriate to the legislation. I thank the 
witnesses for appearing today and I look forward to their 
testimony.
    I now recognize my colleague Mr. Franks, the distinguished 
Ranking Member of the Subcommittee, for his opening remarks.
    [The bill, H.R. 3764, follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

                               __________

    Mr. Franks. Well, thank you, Mr. Chairman.
    Thank you, gentlemen, for being here.
    Mr. Chairman, I thank you for calling this hearing. I 
welcome the opportunity to look closely at H.R. 3764, the Civil 
Rights--Civil Access to Justice Act of 2009.
    And I say this because we know that LSC has a deeply 
troubling history of mishandling Federal funds. This has been 
revealed in news articles, reports from the LSC inspector 
general and reports from the General Accounting Office.
    It is clear, too, that this historical pattern hasn't 
stopped. To the contrary, troubles continue. Last year the 
Washington Times and CBS News reported numerous instances of 
wasted funds, including unnecessary travel expenses and a 
decorative wall costing more than $180,000.
    Also, LSC's inspector general reported problems with the 
organization's consultant contracts last year. And as we speak, 
the GAO is preparing its third report on LSC since 2007. And so 
I am concerned about H.R. 3764 because it would greatly expand 
LSC's funding, at the same time loosen or lift a number of 
restrictions on how LSC uses those funds.
    Additionally, depending on how the bill is interpreted, 
H.R. 3764 might strip LSC's Office of Inspector General of so 
much authority as to prevent that office from fulfilling its 
statutory duty to identify waste, fraud and abuse.
    Before rewarding LSC with more funds and looser uses of 
those funds, we should first have proof that LSC has stopped 
mishandling funds. Some witnesses today may point out that LSC 
has implemented 11 of the 17 recommendations provided by the 
GAO in 2007 studies. But there are still six more of those 
recommendations left, and there are still--there is still a 
third GAO study coming in the near future.
    And despite LSC's efforts to reform itself in 2008 and 
2009, multiple news stories emerged in 2009 with new instances 
of mishandled funds.
    So how, Mr. Chairman, can we trust that the most recent 
fixes at LSC will really work unless it is proved through a 
track record of responsible fund management over the course of 
at least a few years? Should we not first wait and see if LSC 
and its grantees improve their performance before rewarding LSC 
with this bill?
    The 1996 restrictions on funds' use were enacted by 
Congress in response to evidence that Legal Services lawyers 
were systematically using taxpayer money to further 
ideologically motivated lawsuits. The restrictions banned 
represented--the restrictions banned representation of 
undocumented aliens, persons evicted for drug use, suits in 
which attorneys' fees are collected, class action lawsuits, 
prisoner advocacy, and challenges to welfare reform.
    Not only do these--not only do they keep LSC out of the 
partisan area, these restrictions also focus LSC on its true 
mission, ostensibly to provide legal aid to the poor.
    Even with the restrictions, however, Legal Services lawyers 
funded by LSC have apparently attempted to use Federal funds to 
engage in prohibited--in prohibited activism.
    As recently as 2008, for example, LSC's inspector general 
subpoenaed California Rural Legal Assistance to see if it 
violated the restriction on representing undocumented aliens. 
The National Legal and Policy Center reported in 2009 that a 
former CRLA lawyer said the organization had a policy of 
providing aid to illegal aliens.
    Evidence like this misuse of Federal funds should stop 
before we reward LSC with increased funds, Mr. Chairman. 
Congress should not consider giving LSC more money and more 
ways to misuse its money at this point in time.
    Oversight, not increased funding and loosened restrictions, 
is what we need today and in the foreseeable future. Until LSC 
has proven over a sustained period of time that its funds are 
no longer being used for partisan activism and wasted on 
decorative Italian walls, unused casino rooms and lavish travel 
expenses, we should not even consider rewarding LSC with 
increased funds and loosened restrictions.
    With that, Mr. Chairman, I would yield back.
    Mr. Cohen. Thank you, Mr. Franks.
    I am going to recognize Mr. Conyers, the distinguished 
Member of the Subcommittee and Chairman of the Committee. He 
has never failed me when I have recognized him before. But 
before he makes his opening statement, I do want to give notice 
that this young man has a little bit more experience than me, 
so I need to ask him a question that I hope he will respond to.
    I just wonder when the Department of Defense was exposed 
for buying $200 hammers and toilets that cost $18,000 and 
things like that, did we shut down the Department of Defense?
    Mr. Conyers, you are recognized for your statement.
    Mr. Conyers. I reserve the right to answer that question. 
[Laughter.]
    But I want to thank the Chairman and the Ranking Member, 
Mr. Franks of Arizona, who looks at these matters with great 
care and with great scrutiny. And I am glad that we are holding 
the hearing.
    And to have our former colleague Senator Harkin here with 
us and the Chairman of the Subcommittee on Crime in Judiciary, 
Bobby Scott, I think signals that this is an important issue 
that we are charged under our jurisdiction to deal with.
    Now, there is a constitutional basis for everyone being 
able to receive equal justice. As a matter of fact, it is on 
the front of the Supreme Court itself. And as the late Justice 
Powell said, equal justice should be accessible to all, without 
regard to economic means.
    Now, one of our very distinguished witnesses, the chairman 
of the National Legal and Policy Center, suggests that we use 
mediation and more mediation, and to--that premise I agree 
with. But mediation without representation and legal counsel to 
get you to mediation I think would be self-defeating.
    And so I see three issues, and I am going to yield to our 
distinguished senior Member from North Carolina for just a 
moment. But the three things that we want to concern ourselves 
with is what are the resources that are needed to have equal 
justice for those who cannot afford legal counsel.
    The second thing I think we need to do is reexamine the 
restrictions that have been placed on these agencies.
    And third, I think that we ought to make sure, through our 
auditing and oversight and the way we look at the way all 
Federal money is spent out of the Treasury, that we are doing 
absolutely everything that we can to make sure that this meets 
the scrupulous inquiry of the gentleman, the Ranking Member 
from Arizona. I join him in that. We want to be as careful as 
we can about how we use this money.
    And I now yield to Mr. Watt of North Carolina the remainder 
of my time.
    Mr. Watt. Thank you, Mr. Chairman. I don't want to prolong 
this because I am so anxious to hear my colleague Mr. Scott 
testify on the other side of the desk.
    And I am anxious to hear Senator Harkin, too. Although you 
reminded us that he was a former colleague, that must have been 
long before my time, because ever since I have known him he has 
been on the Senate side.
    I did want to correct one error that my colleague Mr. 
Franks made in his--in his opening statement. I think we often 
miss the distinction, at least on the House side--I don't know 
how it works on the Senate side--the distinction that we make 
over here between authorizing Committees and appropriating 
Committees.
    There is nothing in this bill that is going to provide any 
money to anybody, because we don't have the authority to do 
that. Only the appropriators, as I understand it, have that 
authority.
    And we make that mistake quite often and miss the point 
that the role of the authorizing Committee is to--is to set the 
rules under which, if money is available and if the 
appropriators find it in the public interest to fund, they 
will--they will do so.
    Most of these restrictions that have been placed on the 
Legal Services Corporation have never been acted on by any 
authorizing Committee. And this notion that there were 
extensive hearings held by the folks who put these restrictions 
on--on the bill is just not--that is not the case.
    We need to be aware of whatever abuses have been--have 
taken place, if abuses have taken place, and we need to set up 
a structure in the authorizing Committee to try to prevent 
those abuses from taking place in the future.
    But we shouldn't abdicate our responsibility to authorize a 
Legal Services Corporation to do what it needs to do to provide 
justice to the American people, and we should do that not--
without regard to what it costs, really, and let the 
appropriators play their role in this process and try to figure 
out how much money we can afford to devote to it.
    Our responsibility should be to authorize Legal Services at 
a--at a level and with--without the baggage that they have been 
given by the appropriators to do what the Legal Services 
Corporation was set up to do.
    So with that, I appreciate the Chairman yielding, and I am 
looking forward to the testimony of these witnesses and the 
witnesses of the next panel.
    Mr. Cohen. Thank you, Mr. Conyers, Mr. Watt. I thank each 
of you for your statement.
    Without objection, other Members' opening statements will 
be included in the record.
    [The prepared statement of Mr. Johnson follows:]

 Prepared Statement of the Honorable Henry C. ``Hank'' Johnson, Jr., a 
   Representative in Congress from the State of Georgia, and Member, 
           Subcommittee on Commercial and Administrative Law






                               __________
    I am now pleased to introduce our first panel of witnesses 
and hear their testimony. Thank you for participating in 
today's hearing. Without objection, your written statements 
will be placed in the record. We ask you limit your oral 
remarks to 5 minutes and note we have a lighting system. You 
are all familiar with that.
    Our first witness is Congressman Robert C. ``Bobby'' Scott, 
again, serving his ninth term as a Member of Congress in 2009. 
Prior to serving in the House he served in the Virginia house 
of delegates and in the senate in Virginia.
    In November 1992 he was elected to the U.S. House, 
currently serves on the Committee on the Judiciary, where he is 
the Chairman of the Subcommittee on Crime, Terrorism, and 
Homeland Security, distinguishing--distinguished Member of this 
Subcommittee, and also serves on Education and Labor and the 
Committee on the Budget.
    During his 16 years he has become known as a champion of 
the U.S. Constitution and the Bill of Rights in particular, 
fighting to protect the rights and civil liberties of all 
Americans.
    Pleased to have worked with him on this--Legal Services 
Corporation matters, which he anteceded me on. He is a driving 
force and a recognized champion as the author of the H.R. 3764, 
the ``Civil Access to Justice Act.''
    Thank you, Congressman Scott, and if you would begin your 
testimony.

    TESTIMONY OF THE HONORABLE ROBERT C. ``BOBBY'' SCOTT, A 
     REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA

    Mr. Scott. Thank you. Thank you, Chairman Cohen, Ranking 
Member Franks, Chairman Conyers. Thank you, Chairman Cohen, 
Ranking Member Franks, Chairman Conyers and other Members of 
the Committee.
    I thank you for holding the hearing today on H.R. 3764, the 
Civil Access to Justice Act. I am honored to be here to testify 
on behalf of the legislation to reauthorize the Legal Services 
Corporation.
    Also pleased that Senator Harkin could join us to testify 
on behalf of the efforts being made in the Senate to pass 
similar legislation. I look forward to his testimony and the 
testimony of those on the second panel.
    Supreme Court Justice Hugo Black once said in an opinion 
that there can be no equal justice where the kind of trial a 
man gets depends on the amount of money he has. So the Legal 
Services Corporation was established by Congress in 1974 to 
provide legal assistance to people in civil matters who 
otherwise could not afford a lawyer.
    The LSC directs and supervises Federal grants to local 
legal services programs which provide such assistance, and the 
importance of this program has not diminished over time. As 
President Richard Nixon, who was President when the program was 
established, once said, legal assistance to--legal assistance 
to the poor, when properly provided, is one of the most 
constructive ways to help them help themselves.
    I have a special connection, Mr. Chairman, to the LSC. I 
was the original board chairman of the Peninsula Legal Aid 
Center, which is located in Newport News-Hampton, Virginia 
area. And given this experience, I know firsthand the benefit 
and needs of legal aid programs around the country as well as 
the benefit they provide to those they serve.
    H.R. 3764 accomplishes several goals. It increases the 
authorized level of--for LSC to $750 million. This is 
approximately the same amount appropriated in 1981, adjusted 
for inflation. LSC currently is funded at $420 million, which 
is well below the amount needed to meet the recognized need for 
legal services.
    Currently more than 80 percent of individuals who need 
civil legal representation do not have the means to obtain it, 
and nationally 50 percent of the eligible applicants for legal 
assistance from federally funded programs are turned away 
because these programs lack ample funding.
    Moreover, given the state of the economy the number of 
individuals who will qualify for legal representation will 
likely increase. We need to ensure that resources are available 
to provide legal services to those who cannot afford adequate 
legal representation.
    The $750 million authorized in the bill will enable each 
LSC program to begin to address the legal needs of low-income 
residents in their communities.
    The bill also lifts most of restrictions placed on the 
program through appropriations bills over the years, including 
the restriction on collecting attorneys' fees, the prohibition 
on legal aid attorneys bringing class action suits, and the--
and the prohibition on what programs can do with non-Federal 
funds.
    The bill does maintain the prohibition on abortion-related 
litigation and incorporates some of the limits on whom LSC-
funded programs can represent, including prisoners challenging 
prison conditions and people convicted of illegal drug 
possession in public housing eviction proceedings.
    Additionally, the legislation provides for more effective 
administration of LSC. Government Accountability Office reports 
do emphasize the need for better corporate oversight and 
management, so this bill seeks to improve corporate practices 
of LSC.
    I am pleased that we have a companion bill in the Senate. 
Overall, the bills are similar but do have some differences. 
One example is the issue of class action lawsuits. The House 
bill allows class action suits with the approval of the project 
director, which is what the original Legal Services Act 
allowed. The Senate bill permits class actions if the suit 
arises ``under established state or Federal statutory or 
judicial case law.''
    Even with these differences, however, it is my hope that 
both bills can be passed by this Congress, reconciled and sent 
to the President for his signature. And I am not the only one. 
As of this morning, the House bill has 44 co-sponsors, 
including a majority of the Members of the House Judiciary 
Committee.
    The bill also has the support of over 150 national, state 
and local organizations, including the--including the American 
Bar Association, the Brennan Center for Justice New York 
University Law--School of Law, the National Legal Aid and 
Defender Association, and the Virginia State Bar.
    Mr. Chairman, I would like to submit for the record a 
letter signed by all of the groups supporting the bill.
    [The information referred to follows:]

    
    
    
    
    
    
    
    
    
    
                               __________

    Mr. Scott. And the end of the--I would like to end with a 
quote from Justice Lewis Powell during his--who, during his 
tenure as president of the American Bar Association, said, 
``Equal justice under the 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 one of the ends for which 
our entire legal system exists. It is fundamental that justice 
should be the same in substance and availability without regard 
to economic status.'' This is the goal that H.R. 3764 seeks to 
achieve.
    So thank you, Mr. Chairman, for holding the--this hearing 
and giving me the opportunity to speak on behalf of the Civil 
Access to Justice Act. I hope we can mark it up in the near 
future.
    [The prepared statement of Mr. Scott follows:]

  Prepared Statement of the the Honorable Robert C. ``Bobby'' Scott, 
        a Representative in Congress from the State of Virginia














                               __________
    Mr. Cohen. Thank you, Chairman Scott, and appreciate your 
testimony.
    Was Justice Powell from Richmond?
    Mr. Scott. Yes, he was.
    Mr. Cohen. So I think I visited his grave when I was there. 
Yes.
    Our second witness is Senator Tom Harkin. Senator Harkin 
has represented Iowa in the United States Congress for 35 years 
and is the first Iowa Democrat to win a fifth term in the 
United States Senate. First winning election to the House in 
1974, he served 10 years representing the Fifth District, and 
then he challenged an incumbent senator and won.
    He currently Chairs the Senate Health, Education, Labor and 
Pensions Committee and as a senior Member of the Senate 
Appropriations, Agriculture and Small Business Committees. 
Since arriving in Congress he has been a champion of the issues 
that I think touch every American's life in a special way--
health care, education, and equal rights.
    He has worked to transform America into a wellness society 
focused on disease prevention and improving public health and 
is a staunch defender of America's working families. He has 
made Iowa proud and is a great representative of Iowa in the 
great tradition of Henry Wallace and Governor Hughes and other 
great Iowans. He did run for President and would have made a 
great President.
    Senator Harkin is the author of S. 718, the ``Civil Access 
to Justice Act of 2009,'' which is the companion to 
Representative Scott's bill.
    We thank you for taking time out of your schedule and 
coming back to visit us and share your testimony, Senator.

            TESTIMONY OF THE HONORABLE TOM HARKIN, 
         A UNITED STATES SENATOR FROM THE STATE OF IOWA

    Senator Harkin. Well, Chairman Cohen, thank you for the 
honor of coming back to my--to the bosom of the start of my 
political career here in the House of Representatives. It is 
always wonderful to be back here.
    I thank you for your leadership on this issue. I would be 
remiss if I didn't thank my hero, and I say that with all that 
it means, my hero John Conyers.
    When I first got here that many years ago--Mr. Watts, I 
want to say--reminded me a couple years ago I had--school kids 
were out on the Senate steps, and I was telling them about 
being a senator, and I said, ``But before I was a senator I 
served over there in the House of Representatives in the 
Congress.'' But I said, ``That was some time ago.'' I said, 
``That was the last century.'' This little kid looked up with 
these big eyes and said, ``How old are you?'' I had to explain 
what--10 years ago.
    But anyway, but John Conyers to me has always embodied what 
I think is the epitome of the great public servant. For his 
entire lifetime he has fought to make our society a more fair, 
a more just, a more caring and compassionate society. And it is 
always an honor to be here in front of Congressman Conyers.
    And, Representative Franks, thank you also for your 
interest in this. I just have a couple things I will say about 
a couple of the comments you made about that, about governance, 
which--you are right on track, by the way. A lot of that has 
disturbed a lot of us.
    And to be here with Representative Scott--an honor. He has 
been a constant champion again for equal rights and justice. I 
couldn't ask for a better partner in this effort to try to get 
this legislation through.
    Mr. Chairman, when I first came to Washington, D.C., I came 
to law school. I went to Catholic University Law School just up 
the street here. And we had a dean, Dean Clinton Bamberger, who 
decided to start a neighborhood legal service clinic with law 
school students.
    And he got some money, I guess, from some friends and 
stuff, and we opened a clinic up on North Capitol Street. It 
was the first neighborhood legal services based out of--out of 
a law school in the District of Columbia.
    And I can remember going over there to staff that after 
class hours, in the evenings, on Saturdays. It was all 
volunteer. And having people come in--I can remember--this was 
not too long after the Walker-Thomas case here in the district, 
a Supreme Court case.
    A person came in and--and wife--he and his wife, couple of 
kids--I think--I forget, maybe two or three, four kids, and all 
their possessions had been taken out of their apartment and 
just put out because of an illness that he had had and he had 
missed one payment on his rent. And the landlord decided to 
just take everything out and put it outside.
    I said, ``Well, that can't happen in our society.'' But it 
was happening. And so how do you handle a case like that? I 
wasn't a lawyer. We were just law students. Our legal clinic 
then had to go to law firms in the District of Columbia to try 
to find some lawyer that had some free time to help us out. And 
that is the way we operated. It was sort of hit or miss. Now, 
that was before 1974, obviously.
    After I graduated from law school, I went to Iowa, went 
back to my home state, and I joined the Polk County Legal 
Services--Polk County Legal Services and became a lawyer there 
for Polk County Legal Services. I will never forget the first 
person that walked into my little cubbyhole where I had my 
desk.
    She came in. She had a little girl with her, her daughter. 
And she came in and she was assigned to me. She came in. She 
had these welts on her face and on her--and she showed me her 
back and her arms. She had a couple of teeth missing, and her 
little kid just so frightened.
    I thought, ``Well, surely this is a criminal case. We don't 
handle criminal cases. We handle civil cases.'' What it was was 
that her husband had been beating her up, and she wanted to 
come in to get some protection.
    She wanted to know if there was a safe place where she 
could go with her daughter. She wanted to know if we could 
handle a divorce so she could get away from this abusive 
relationship. I will never forget that and how we were able to 
help in those cases.
    And then through my tenure there, the landlord-tenant 
cases, the workers' comp cases, the disability cases that came 
through the door, left a lasting impression on me of how 
important it is for poor people to have legal--access to legal 
services.
    Well, then after that, Legal Services Corporation was 
started, as Congressman Scott said, in 1974, I might add under 
a Republican president, Richard Nixon. And then by the time I 
got here to the Congress in 1975, Legal Services was just 
starting to get off the ground and make its way across the 
country.
    So I was able to see it grow until about 1981 when I think 
the high point was reached in terms of funding, and then during 
the 1980's, during the Reagan years, it just kept getting cut 
more and more and more and more, and we reached a low point I 
think some time in the 1990's in terms of funding.
    But nonetheless, the Legal Services that--Corporation and 
those lawyers out there kept at it, kept doing more with less, 
until finally it reached a crisis, till what--people just 
couldn't handle it any longer. And so we finally started, then, 
in the 1990's getting the funding back up for the Legal 
Services Corporation.
    Even where the funding is now--and right now--it got down 
quite a bit. I can get the numbers. But we are now back up to 
just about where we were in the mid 1990's, not counting for 
inflation. If you count inflation, we are way back. We are way 
back.
    One of the things that our bill does is it sets an 
authorization level that is basically where it was in 1981. 
That is the authorization level we have, adjusted for 
inflation, so it is around $750 million.
    And I think right now we are at about $420 million. So it 
sets that as an authorization level, because right now, even 
where we are, 50 percent--50 percent--of the people who walk in 
the door of a Legal Services office anywhere in America--half 
of them--are not helped, not because their cases aren't good or 
they don't need help.
    Legal Services simply do not have--does not have the money 
or the resources to help these people. One out of every two are 
turned away because they don't have the wherewithal to help 
them. And it is probably getting worse.
    I checked with Iowa legal aid. Our Iowa legal aid--just in 
the last few years, their housing cases have gone up 300 
percent. No surprise, with the housing crisis. That has gone up 
300 percent. The chief justice of the Texas supreme court said 
this is a crisis of epic proportions. A crisis of epic 
proportions. Chief justice of the Texas supreme court.
    And it has real consequences for people. Our bill, I think, 
would bring this into the 21st century. As I think was pointed 
out, this bill has not been authorized since 1981. So if there 
is problems out--it is because we haven't brought it into this 
century.
    The Federal funds, I said, have been cut. When you consider 
the inflation, it is way down. So we do need to reauthorize it, 
and I think Congressman Scott went through some of the things. 
But I mentioned we increase the authorizing level basically 
where it would be at 1981.
    It lifts some of the restrictions, like collecting 
attorneys' fees and things like that, but it also does better 
governance, Congressman Franks. One of the things we put in 
this bill is we incorporated all of the GAO recommendations.
    And believe me, I have watched this with some anger and 
frustration as I have seen some of the governance of Legal 
Services in the last few years. But we are getting it back. We 
have got a new chairman of the board who is excellent, and you 
are going to hear from Mr. Levi.
    So I think we are now moving in--but we incorporate all 
those GAO recommendations and codified them--codified them--in 
this bill.
    And lastly, I might say one of the things I really wanted 
in this bill was it expands the law school clinics. Maybe that 
is personal to me, but we can--we can make our dollars go a lot 
further by expanding the use of law school clinics, for law 
school clinics like the one I started up on North Capitol 
Street, where we don't have to go shopping around all the time 
to one law firm or other to find who might have some free time, 
but where we can go to Legal Services with these cases from the 
law school clinics and get people the kind of representation 
they need. So we expand those--those clinics in this--in this 
bill.
    Lastly, let me just say, again, I have never considered 
this a Republican or a Democratic issue. Many of the lawyers I 
served with in Legal Services in Polk County were Republicans 
and are still today. Many of the champions of this have been 
Republicans as well as Democrats.
    You mentioned President Nixon. I mentioned somebody closer 
to home. I worked for years in the Senate with Pete Domenici, 
from your neighboring state, New Mexico, one of the great 
champions of this.
    And here is what Pete said once. He said, ``I do not 
know''--we were talking about funding for legal services. He 
said, ``I do not know what is wrong with the United States of 
America saying to the needy people of this country that the 
judicial system is not only for the rich. What is wrong with 
that? That is what America is all about.''
    So I have never considered this a Republican or Democratic 
issue. I consider it an issue of just basic fairness and 
justice. That statue of Justice up there with the blindfold is 
holding those scales, but the scales get tipped if you put 
dollar bills on them. That not equal justice. That is not equal 
justice.
    We have got to take away that influence of whether or not 
you have the money to get a lawyer or not to make sure you get 
equal representation in our society.
    So I thank you, Mr. Chairman, for having this hearing. I 
hope we can move this bill as expeditiously as possible.
    [The prepared statement of Senator Harkin follows:]

            Prepared Statement of the Honorable Tom Harkin, 
             a United States Senator from the State of Iowa









                               __________

    Mr. Cohen. Thank you for your testimony, Senator Harkin, 
heartfelt and personal, anecdotal, and publicly thank you for 
sponsoring the Senate apology for slavery and Jim Crow in the 
111th.
    We thank each of you for your statements, and we excuse 
you.
    We know you need to get back to the Senate for duties.
    And, Congressman Scott, you have duties as well.
    So we thank each of you and we will now empanel the second 
witnesses, group of witnesses.
    Mr. Watt. Mr. Chairman, you mean I am not going to get a 
chance to question Mr. Scott? [Laughter.]
    Mr. Cohen. Not here. [Laughter.]
    Out of order. Thank you all for participating. The second 
panel will come forward.
    I would like to thank everybody for participating in 
today's hearing, and the same instructions that went to the 
first panel go to your panel, except you have to answer 
questions.
    Our first witness on this panel is Mr. John Levi. On April 
7, 2010 he was elected chairman of Legal Services Corporation 
board of directors. Mr. Levi is a partner in Sidley's Chicago 
office. He represents major professional financial services 
firms and corporations in employment and labor matters before 
numerous Federal and state courts, government agencies and 
arbitration forums.
    He regularly litigates claims regarding wrongful 
termination for employment issues, restrictive covenants, wage 
and hour and other employment-related matters in these various 
forums. In addition, Mr. Levi advises clients on their internal 
policies and governance.
    He has counseled numerous clients regarding their 
employment policy handbooks and manuals, prepares and 
negotiates executive employment agreements and post-employment 
covenants, and has spoken at a number of employment law 
conferences as the author of ``Legal Issues Regarding AIDS in 
the Workplace.'' That was published in the January 1988 issue 
of Commerce magazine.
    Anecdotally, he related to me that historically his father, 
Mr. Edward Levi, was the United States attorney general under 
the Ford administration and served with distinction there.
    We thank you for your service and appreciate your 
attendance, and you can begin your testimony and the 5-minute 
light will start.
    I think I forgot to--I dismissed giving the warnings to the 
previous panel because they are so used to them. There is a 
light that goes on that is green. That means you have got 
your--you are in your okay zone. It goes on for 4 minutes. At 
the end of 4, it goes to yellow. At the end of that minute, 
which is a total of 5, it goes to red. And at red you should be 
concluding or have concluded. Thank you, sir.

TESTIMONY OF JOHN G. LEVI, CHAIRMAN, BOARD OF DIRECTORS, LEGAL 
                      SERVICES CORPORATION

    Mr. Levi. Thank you, Chairman Cohen. In our profession we 
are familiar with lights.
    Chairman Cohen, Chairman Conyers, Congressman Franks, 
Members of the Subcommittee, thank you for holding this hearing 
and providing the Legal Services Corporation with the 
opportunity to testify on H.R. 3764, the Civil Access to 
Justice Act. I will keep my comments very brief.
    My thanks to you, Congressman Scott, for your sponsorship 
of this bill and to you, Mr. Chairman, and all of the co-
sponsors.
    We wholeheartedly support the authorized funding level of 
$750 million because it will significantly strengthen our 
ability to provide legal aid to the poor. Higher annual funding 
for LSC will help expand the capacity of local Legal Services 
programs to meet the needs of their communities.
    Those needs are on the rise, especially given the risk that 
the economic downturn raises to jobs and homes, the jeopardy of 
physical violence and family conflict, and the special needs of 
veterans, and yet all these needs are increasing at precisely 
the same time that local resources are in decline.
    A major source of legal aid funding, IOLTA, is in a 
downward spiral because of the drop in short-term interest 
rates. LSC programs were hit with a 24 percent reduction in 
IOLTA funding in 2009 compared to 2008, and that is a loss of 
$27 million.
    The near term is just as troubling. Most programs project 
declines in their IOLTA funding this year and probably into 
2011, so this is a moment when every dollar counts, and the 
board is encouraging local programs to think strategically 
about partnerships, collaborations with others, such as law 
firms, law schools, medical centers, local businesses and 
community agencies.
    Our programs report that cases closed by private attorneys 
increased significantly, up 11 percent in 2009, from the 
previous year. And we want to do all we can to continue to 
foster commitments for pro bono work from lawyers in every 
community.
    With the bill's sponsors, I share the goal of improving 
governance and accountability so that every dollar is well 
spent. With new membership and renewed dedication, the board is 
committed to serious improvement in the organization's 
accountability and transparency.
    We also greatly appreciate the increase in the 
corporation's executive pay schedule from level five to level 
three. We are now about to launch a nationwide search for a new 
president of LSC, and more competitive pay will help us recruit 
an innovative and forceful leader.
    Let me close with a couple of observations from my first 
few weeks on the job. We held our regular board meeting about 
10 days ago in Arizona where we were briefed by the three LSC 
programs in that state.
    Legal aid programs in Arizona, as in most parts of our 
Nation, are unable to provide assistance to a majority of those 
who need help and daily turn people away. While board members 
were being briefed at Southern Arizona Legal Aid offices, 
clients filled every intake desk and the waiting room, with a 
line out the door.
    In my home town of Chicago, the Legal Assistance Foundation 
operates the Foreclosure Project, and its intake telephone 
lines usually have to shut down early Monday afternoon for the 
rest of the week because of the overwhelming need and limited 
staff resources.
    Mr. Chairman and Subcommittee Members, the corporation 
supports reauthorization because it represents an expression of 
ongoing support for the mission of LSC. In particular, the 
proposed funding level in the legislation reaffirms that 
Congress recognizes the profound importance of the work 
performed by the 136 LSC programs across the Nation and located 
in every state.
    With 54 million Americans--one-sixth of our population--
qualifying for legal assistance, the magnitude of this issue 
cannot be overstated.
    My father, as you recognized, served as attorney general of 
the United States in the Ford administration, in a different 
time of crisis. And in his farewell address to the Justice 
Department he reminded us that the values on which our country 
was founded ``can never be won for all time. They must always 
be won anew.''
    Every day legal aid attorneys do their best to ensure the 
poor receive fair treatment in the resolution of their pressing 
legal problems. I thank the Subcommittee for taking up this 
legislation. It represents a giant step toward fulfilling our 
national promise of equal justice for all.
    Thank you, Mr. Chairman. I am happy to respond to questions 
at an appropriate time.
    [The prepared statement of Mr. Levi follows:]

                   Prepared Statement of John G. Levi



















                               __________

    Mr. Cohen. Thank you, Mr. Levi, for your service and that 
of your family and for your testimony.
    Our second witness is Mr. Jeffrey Schanz, who was appointed 
Legal Services inspector general effective March 3 of 2008. He 
has had a long and distinguished career with the Federal 
Government, 34 years, the last 32 in DOJ, served 17 years as 
director of the Office of Planning and Development, Audit 
Division, in the inspector general's office.
    Thirty-two years at DOJ have included auditing, program 
analysis, investigation, legal analysis of top management 
positions. After leaving the Department of Health, Education 
and Welfare he served with the Law Enforcement Assistance 
Administration, Justice Management Division, and the Office of 
the Inspector General, and a recipient of several attorney 
general awards.
    Thank you, Mr. Schanz, and you can begin your testimony.

   TESTIMONY OF JEFFREY E. SCHANZ, INSPECTOR GENERAL, LEGAL 
                      SERVICES CORPORATION

    Mr. Schanz. Thank you very much, Mr. Chairman. Mr. 
Chairman, Congressman Franks and other distinguished Members, 
as you just heard, my name is Jeff Schanz. I have been the 
inspector general for Legal Services since March of 2008. 
Sorry.
    I believe strongly, being in the I.G. community for so many 
years--actually, decades; three decades--I strongly believe in 
the values of accountability, transparency, effectiveness and 
efficiency that are mandated by Inspector General Act.
    I fully endorse Chairman Levi's statement underscoring the 
critical importance of the LSC mission, and I look forward to 
working with Mr. Levi and the new board in fulfilling the 
corporate mission by ensuring that Federal funds are 
appropriately used to help the indigent, the people that it is 
designed to help.
    One of my duties as the inspector general is to keep the 
Congress fully and currently informed of my findings and 
activities and comment on existing and proposed legislation, 
that latter function which brings me here today to comment on 
H.R. 3764.
    At this Subcommittee's hearing last year, Chairman Cohen 
asked what steps the corporation had taken to ``protect against 
the misuse of Federal funds.'' I will briefly talk about some 
of the activities that my office has done in the last 18 
months, recognizing I have been here 2 years. A more robust 
list of my activities are in the formal statement that I 
prepared for today that will be, hopefully, entered into the--
into the record.
    We did complete a series of audits of grant management and 
oversight, reporting on issues that affected almost $1.5 
million in LSC or LSC derivative funds and referred over 
$400,000 to the corporation as questioned costs to be recouped.
    We launched a number of initiatives to help and detect--
prevent and detect fraud and abuse. We have issued fraud 
alerts, an initiative that was undertaken to all of the 
executive directors of the programs, the 136 programs, to 
highlight vulnerabilities identified in the course of OIG 
audits and investigations.
    We also took numerous steps to improve the government 
practice--governance practices and accountability at LSC by 
independently and objectively conducting an audit of the LSC 
contracting with respect to consultants.
    We also have taken a more robust look at all the IPA 
reports, the independent public accountant reports, that come 
in to the OIG, and we have also overseen and continue to 
oversee the annual corporate audit.
    While H.R. 3764 proposes some useful reforms in the areas 
of governance, it also contains that--we believe, a number of 
provisions that threaten to undermine the I.G.'s work.
    If a provision comparable to Section 509 of the 1996 LSC 
Appropriation Act is not included, the reauthorization bill 
would take the corporation backwards to a time where the 
respective roles of management, LSC management, the OIG and the 
aforementioned IPAs, the independent public accountants who 
audit grantees, were unclear.
    The GAO in their first audit has specifically identified 
such lack of demarcation as a major factor in LSC's heretofore 
weak governance and accountability practices.
    Without Section 509 or an equivalent, oversight of grantee 
audits would no longer be held to the same standards that the 
OMB Circular A-133 makes applicable to audits of states, local 
governments and nonprofit organizations receiving Federal 
grants.
    In addition, the bill as constituted would restrict the 
OIG's access to grantee records as it contains no provision 
comparable to Section 509(h) of the 1996 act, which provides 
the OIG access to the records it needs to perform our statutory 
oversight duties.
    Moreover, under the proposed LSC bill, grant money would no 
longer be considered Federal funds for purposes of Federal 
statutes relating to fraud and embezzlement--unfortunately, 
issues that we have uncovered.
    The bill would also make it difficult for the OIG to 
ascertain the source of funding for grantee activities by 
repealing current provisions that require recipients to account 
separately for LSC and non-LSC funds.
    In addition, the bill would repeal the current statutory 
requirements that grantees make their timekeeping records 
available to oversight entities, OIG, GAO and the corporation 
included, and eliminates statutory provisions designed to 
foster competition in the grant award process.
    I stand ready to work with the Committee and the new board 
of directors to ensure that the LSC OIG can function with the 
independence and authority it needs to ensure the--that Federal 
funds entrusted to LSC are spent with the appropriate level of 
transparency and accountability.
    I am pleased to answer any questions that the Committee may 
have. Thank you for this opportunity.
    [The prepared statement of Mr. Schanz follows:]

                Prepared Statement of Jeffrey E. Schanz









































                               __________
    Mr. Cohen. Thank you, Mr. Schanz. I appreciate your service 
and your statements.
    Our third witness is Mr. Kenneth Boehm. Mr. Boehm is the 
full-time chairman of the National Legal and Policy Center in 
Falls Church, Virginia since 1994. Previously he was in a 
senior position in Legal Services Corporation, from 1991 to 
1994, assistant to the president of LSC and counsel to the 
board of directors.
    He has received his J.D. and since then he has been a 
prosecutor in Chester County, Pennsylvania; treasurer of a top 
10 political action committee; chief of staff to Representative 
Chris Smith, Republican of New Jersey; and chairman of Citizens 
for Reagan--awful young to have done that.
    In addition to his legal career, Mr. Boehm spent 5 years as 
an award-winning radio talk show host on Philadelphia's WWDB. 
His broadcast experience--guest commentator at NPR and guest 
interviews on more than 500 radio and TV programs.
    We appreciate your being here and look forward to your 
melodious voice. I believe you need to turn on the microphone.

           TESTIMONY OF KENNETH F. BOEHM, CHAIRMAN, 
                NATIONAL LEGAL AND POLICY CENTER

    Mr. Boehm. There we go. So much for my broadcasting 
background.
    Mr. Chairman, Congressman Franks and distinguished Members 
of the Subcommittee, I want to thank you for this opportunity 
to testify this morning on the proposed reauthorization of the 
Legal Services Corporation.
    If there is one thing that everybody familiar with the 
Legal Services program knows, it is that it has had a very 
troubled history. A lot of this has been commented on--the GAO 
studies, the other problems, et cetera.
    One of the reasons that we are here today is because this 
program has not been--was last reauthorized in 1977, 
authorization that expired in 1980. There are few Federal 
programs out there that have been unauthorized for some 30 
years.
    The reason----
    Mr. Cohen. We talk through that.
    Mr. Boehm. Oh, okay. The reason that it has been 
unauthorized for so long is because of these controversies. It 
reached a head in 1996 when there were deep cuts in the 
program. Actually, the House budget resolution called for 
phasing it out over 3 years.
    The people who supported Legal Services said, ``It is time 
for an historic compromise. The compromise is this. Let's do 
away with a lot of the more controversial programs--lobbying, 
congressional redistricting, the class actions, prisoner 
litigation--you name it--and in return for that, we will see 
how they do, see if these reforms stick, and let's press 
ahead.''
    That is, in fact, what happened. And most of these reforms 
have been repeating year after year since 1996. There has been 
a broad bipartisan coalition. There has been no real effort to 
gut them in any substantial way. And that brings us to today.
    The problem I have with the proposed reauthorization is it 
basically would eliminate or weaken almost all of the 1996 
reforms. We won't have to wonder what will happen if that 
occurs, because we just have to look at what happened before 
the reforms were in place.
    One of the problems were these series of legal actions that 
don't have to do with the day-to-day legal service of the poor 
that generated most of the problems. It is almost an 80-20 
Pareto principle. Eighty percent of the problems came from 20 
percent of the cases, but it was those 20 percent that got an 
awful lot of attention.
    Prisoner lawsuits--now the current reauthorization would 
allow them with the exception of prisoner conditions. This was 
highly controversial.
    You had a situation in a Pennsylvania prison where a triple 
murderer was released back to the general population through 
the good services of Legal Services and in a prison break 
attempt took 30-something hostages. The governor really was 
very, very upset with that. He later became attorney general of 
the United States. And it received a lot of bad publicity.
    I would argue that in a time and date when we have so many 
unemployed and so much traditional legal services to be done, 
this is the last time to be wasting scarce resources on civil 
lawsuits on behalf of prisoners.
    The real outrage is one--I think is congressional 
redistricting, or any legislative redistricting. Incredible as 
it seems, Legal Services has been involved in this area. When 
this reform was proposed, even Congressman Barney Frank said, 
``I don't know what Legal Services lawyers are doing in 
congressional redistricting cases.'' It is not like the poor 
people are wading into the offices saying we feel 
malapportioned, we think the 16th Congressional District should 
look like this, as opposed to this.
    On top of that, one of the problems with these cases is 
they are very, very expensive, with computer models and the 
rest of it. It is hard to say it is not a politicized program 
if it is doing something as political as redistricting. It is 
hard to imagine anything less tinged with partisanship than 
that.
    Another argument is drug-related evictions for public 
housing. This was another hot-button issue. Legal Services was 
more involved than any other single group of legal groups in 
thwarting drug-related evictions up to the 1996 reforms. And 
the rule was that--that came in 1996 you can't participate in 
these at all.
    The new proposed reauthorization allows them to get back in 
but draws the line at convicted drug dealers. Well, convicted 
drug dealers aren't going to be in that public housing. They 
are generally going to be in other public housing. And usually, 
they are not even client eligible at all because they tend to 
have cash income that makes them uneligible.
    I couldn't begin to understand why Legal Services would go 
back into this very controversial area and yet allowed under 
this legislation.
    Then you have class action lawsuits. The reason they were 
restricted was because so many of them were very, very highly 
political. In many cases you could argue against the interests 
of the poor.
    One of the more celebrated ones was a class action lawsuit 
in the case of Atlanta public housing in which case they were 
trying to screen out violent criminals from becoming tenants in 
public housing.
    Legal Services brought a very expensive class action 
lawsuit to try to stop that. I don't think if you polled the 
average public housing person they want violent criminals in 
their public housing unit, and yet Legal Services was involved.
    And so class actions has been for the last--since 1996 
restricted and, again, I think opening the door back to that is 
a backwards step.
    Lobbying, the same argument. The bill would allow lobbying 
with non-Federal funds. The trick there is--or the real issue 
there is who picks what is lobbied on. It would be the Legal 
Services lawyers. And again, I think you could make a good 
argument when they were lobbying they were lobbying on a lot of 
things that an awful lot of poor people would not agree with.
    The most important provision of all is the one that says 
that you cannot do with non-LSC funds--the restriction--you 
cannot do with non-LSC funds what you can't do with LSC funds.
    And the reason that that was a problem up to 1996 was that 
so many of the individuals that were involved in Legal Services 
at the time, frankly, didn't--you couldn't tell whether it was 
Federal money or other money, and the tools weren't there. The 
oversight wasn't there. And so that was a major problem.
    If you allowed it, essentially it would be anything goes, 
and they would be doing lots of restricted activities and it 
would be impossible to sort it out.
    The final argument I would make is this, that we are going 
backward when we eliminate all these common-sense restrictions, 
and we should instead keep them.
    And I think ultimately Legal Services would have a better 
chance of getting funding if it weren't engaged in these highly 
political and controversial subjects and instead was actually 
helping the traditional legal needs of the poor. Thank you.
    [The prepared statement of Mr. Boehm follows:]

                 Prepared Statement of Kenneth F. Boehm






























                               __________
    Mr. Cohen. Thank you, sir.
    Ms. Diller is our next witness, Ms. Rebekah Diller. She is 
deputy director of the Brennan Center's Justice Program, 
coordinates the Brennan Center's legislative and public 
education campaign to eliminate private money restriction on 
Legal Service programs and other initiatives.
    Prior to joining that center, she served as staff attorney 
at the New York Civil Liberties Union Reproductive Rights 
Project. She oversaw litigation and other initiatives there. 
She represented low-income citizens in housing and government 
cases, legal service of the elderly--basically the panoply of 
good things.
    Now, if you would be so courteous as to watch the 5-minute 
limit, I would appreciate it, and you are recognized for your 
testimony.

TESTIMONY OF REBEKAH DILLER, DEPUTY DIRECTOR, JUSTICE PROGRAM, 
        BRENNAN CENTER FOR JUSTICE AT NYU SCHOOL OF LAW

    Ms. Diller. Good morning, Chairman Cohen, Chairman Conyers, 
Representative Franks and other Members of the Subcommittee. 
The Brennan Center thanks you for holding today's hearing and 
for permitting me to testify in support of the Civil Access to 
Justice Act.
    I will start by saying that we have heard various views 
about particular provisions of the bill, but one thing I hope 
we can all agree on is that the need right now, as others have 
so eloquently testified, is tremendous.
    Americans are facing foreclosure at record rates. The ranks 
of the unemployed have swelled. Many of those folks are facing 
long-term unemployment. And all of this is giving rise to 
tremendous legal need. Often a Legal Services lawyer is a 
lifeline. It is the one thing standing between a family and 
homelessness and a downward spiral into--into more crisis.
    I think it is a critical time and this bill will reinforce 
our Legal Services program at a time of great need and allow 
for the infrastructure to serve more people.
    We heard today some claims about some old cases regarding 
restrictions. These are some cases out of a program that serves 
nearly a million people a year. I would like to tell you about 
how the restrictions are affecting Legal Services clients 
today. And they are affecting them in ways that have nothing to 
do with ideological-crusade-types of cases. They are affecting 
them in their daily bread-and-butter-type cases.
    First of all, the most harmful restriction that we have 
seen has been the restriction on non-LSC funds. This is the 
restriction that says if you take one dollar from LSC, all the 
money you receive from state, local governments, IOLTA 
programs, private donors--all of that is restricted.
    And that restriction hampers $526 million a year, or 60 
percent of the funding at LSC recipient programs. So the 
Federal Government, which is in essence a minority stakeholder, 
if you will, here, is dictating to all these other players how 
their money gets spent.
    And what we have seen is that this restriction has been 
tremendously wasteful for a system that already has scarce 
resources. In many places, state and local funders have not 
wanted their money tied up by the Federal restrictions, and so 
they have had to form duplicate legal aid systems, which means 
you are paying two sets of rent, two computer networks, two 
copy machines. All of these extra expenses could go toward 
serving more clients more effectively.
    Second of all, that restriction sends exactly the wrong 
message. We should be welcoming private participation. We 
should be welcoming a leveraging of the Federal funds. And 
instead, it says to private donors, ``We will restrict how your 
money, your donations, are spent.''
    Second of all, as to the restrictions on advocacy tools, 
there is simply no justification in a country that promises 
equal justice for all for telling a low-income client that he 
or she cannot have access to the same legal tools that are 
available to a client with means.
    And I would like to tell you about some of the ways this 
has been playing out, particularly as low-income communities 
and communities of color have faced crises with predatory 
lending and other consumer scams.
    A number of providers across the country have reported this 
alarming incidence--this is just to give you one example--of 
foreclosure rescue scams. These are companies that promise you 
that they will refinance your mortgage. They take your money 
and then they are never heard from again.
    And the effective way to deal with that kind of operation 
would be to bring a class action on behalf of your client and 
all others who have been affected. Unfortunately, because of 
the restriction, programs can't do that. They can represent one 
victim at a time, maybe achieve a result in that one particular 
case, but they can't seek the broader relief that would stop 
the illegal practices and bring those companies to justice.
    So instead of performing some sort of ideological screening 
test, what the restriction has been doing is it has been really 
insulating those who prey on the poor from accountability and 
from being brought to justice.
    The other thing I will just mention is we heard from the 
inspector general a number of suggestions for changing and 
improving the bill, and I would just say that we are eager to 
work with Subcommittee staff on a number of those which I think 
we could reach agreements on.
    The one area where I would disagree is that--is the need to 
access confidential information such as client names and the 
like. There has simply not been a showing that there is a need 
to get that information. There is a way to ensure 
accountability by using other means without violating state 
confidentiality protections.
    Thank you, Mr. Chairman----
    [The prepared statement of Ms. Diller follows:]

                  Prepared Statement of Rebekah Diller






























                               __________
    Mr. Cohen. Thank you, Ms. Diller. I appreciate your 
testimony.
    And I will now recognize myself for questions.
    Mr. Levi, first of all, we--Ms. Barnett's contract ended at 
the end of 2009. Where is the board in finding a permanent 
replacement for her?
    Mr. Levi. Well, this afternoon our search committee will 
have its very first meeting and will issue a request for 
proposals and begin the process of getting a high-quality 
search firm to help us. And then we intend to conduct a 
nationwide search and bring in somebody who is absolutely 
outstanding, with a distinguished career, to help in this very 
important problem in our country and to lead us in an 
innovative and forceful way.
    Mr. Cohen. As new chair of the board, what are your goals 
and how do you see that the past problems can be rectified and 
the public to embrace LSC and Mr. Franks to wrap his arms 
around LSC?
    Mr. Levi. I hope to convince our Congressman Franks to----
    Mr. Cohen. Particularly about the fraud and abuse, because 
that is important to all of us.
    Mr. Levi. Absolutely. And I would say we have--I have a 
number of priorities, but four in particular. The first, we do 
have to conduct a first-rate search. I have done that for other 
organizations. I am confident that we can get an outstanding 
president in.
    The second is that we have to call attention throughout the 
country, here and elsewhere, to the existence of this problem, 
encouraging not only Congress but the--but private individuals, 
the law firms, to step up and do as much as they can to help 
with this situation.
    The third is certainly to--and they are not in order here, 
but they are my priorities--to make sure as a--look, our board 
wants to make sure that our internal controls--my understanding 
is that of the GAO recommendations all 17 have been addressed.
    But look, we are--we are new. We are going to take a deep 
dive in here and make sure to--for our own selves that 
appropriate controls are in place, that you and the American 
people can have confidence that money is being well and 
properly spent. And I look forward to working closely with the 
inspector general on that.
    And finally, we have to come up with a new strategic plan. 
The current plan expires this year, and I look forward to 
developing such a plan for the corporation.
    Mr. Cohen. Mr. Levi, I imagine, looking at your vitae, you 
do employment law. You generally represent management.
    Mr. Levi. More often management, yes.
    Mr. Cohen. Business.
    Mr. Levi. Yes.
    Mr. Cohen. You don't see any contradiction in any way in 
doing that and yet looking out for the equal justice for the 
poor.
    Mr. Levi. Not at all. In fact, I have been in my private 
life involved in doing just that for many, many years.
    Mr. Cohen. Thank you, sir.
    I join you and Mr. Franks and others in wanting to see the 
money properly spent. It galls me when I see people having 
trips, monster meals, limousines on government money that 
should be going to the public's needs and particularly to the 
poor.
    So I appreciate the inspector general's reports, and there 
are things that are not in our bill that are in the Senate 
bill. I would like to see them get into our bill and make it as 
strong as possible, because that is one of the--you know, that 
is one of the ways you go to hell, I think, is taking money 
from the poor.
    Mr. Schanz. Yes, sir. Thank you. We have worked with both 
staffs on the Senate side and the House side, and my long 
statement for the record will include most of those amendments 
that we need to have inserted into the bill to increase, not 
decrease, governance.
    Mr. Cohen. Thank you, sir.
    Ms. Diller, let me ask you a question about--Mr. Boehm made 
a point about talking about the drug situation. In drug-related 
cases, the change in the law would simply say that if you are 
convicted of a drug offense. Would you remind us something 
about innocent till proven guilty?
    Ms. Diller. Yes, Chairman. I mean, that is exactly the 
point. You are innocent until proven guilty. And this 
legislation would only change the existing provision to honor 
that principle, so that if you have not been convicted, there 
are cases where charges are brought, and then they are dropped 
later. People are acquitted. And in the meantime, you can lose 
your home.
    So the only thing that this would do is make sure that for 
that set of cases where there has merely been a charge brought, 
you are eligible for representation, whereas once you are 
convicted there is no representation.
    Mr. Cohen. And might people that have drug charges brought 
against them have families and children and----
    Ms. Diller. Absolutely. I mean, the sort of classic case is 
the grandmother living with her grandson or whoever----
    Mr. Cohen. Right, extended family.
    Ms. Diller [continuing]. Faces eviction.
    Mr. Cohen. Is there a distinction in the law between 
felonies and misdemeanors, possession and sale?
    Ms. Diller. I would have to double check that. I mean, my 
understanding was that this is a pretty far-reaching 
restriction.
    Mr. Cohen. Thank you very much.
    I now yield to the--Mr. Franks for 5 minutes of 
questioning.
    Mr. Franks. Well, thank you, Mr. Chairman.
    Mr. Boehm, I guess the first question I would ask--I know 
that of the poor who need legal services that are not able to 
afford it themselves that probably only a certain percentage of 
them actually gain some outside help of some kind. I don't know 
what that is.
    And you know, just for the record, you know, I certainly 
want to do everything I can to see that the poor receive the 
appropriate legal representation that they deserve under our 
Constitution.
    With that said, I don't know what the percentage of the 
total poor that actually get help, but of those who get--that 
do get help, isn't it about 10 percent or a little less than 10 
percent of them get help from LSC?
    Mr. Boehm. That is the case, sir. There have been studies 
of this. One was a study by a former LSC inspector general 
looking at pro bono activities, activities representing the 
poor pro bono from groups not getting LSC funding, and the 
figure came out as less than 10 percent of the poor who do get 
some kind of legal advice and representation get it from Legal 
Services.
    But there is another statistic, and it was mentioned by Ms. 
Diller, which is 60 percent of the money that goes to LSC-
funded groups comes from non-LSC or non-Federal sources. So you 
take those figures and you actually look at it, and it is a 
very small percentage of the poor who get money from the LSC 
program.
    And then, when you have all of these more politicized types 
of cases, prisoner cases and the rest of them, that takes away 
from the money that is available to the more deserving poor, to 
use an archaic phrase.
    Mr. Franks. Yes. Well, I guess that is the point I wanted 
to make, Mr. Chairman, is that, you know, those of us that 
object to the Federal funds being spent in a way that it is--
that is counterindicative of what the mission statement of LSC 
is, do so on the basis that as far as, you know, the private 
sector doing what they can--you know, Ms. Diller mentioned that 
the private sector--they want to encourage that. And certainly 
if this was a private endeavor I don't think there would be a 
hearing here. You know, you could represent who you wanted, how 
you wanted.
    But if the Federal Government is going to take tax money 
from its citizens and--you know, under a obligatory scenario 
and give it to Legal Services, I think it has the right and 
responsibility to make sure that there are restrictions on what 
they do, what organizations that they fund.
    And if we have an organization that 60 percent of which is 
privately funded, and they help less than 10 percent of the 
poor who actually get legal service help from someone, which is 
probably--I don't know what percentage of the poor actually get 
help, but I am sure it is less than it should be--then you 
begin to understand why there is hesitation on our part to see 
monies from taxpayers go to an organization that uses it for 
ideological purposes rather than the stated purpose of helping 
the poor.
    So, Mr. Boehm, I guess I--you know, the 1996 restrictions I 
am understanding have been violated using the so-called mirror 
corporations that enable restrictions to be circumvented. I 
know you have written about that. Could you explain that, that 
kind of underscores one of the reasons why we are hesitant in 
this case?
    Mr. Boehm. Certainly. One of the ways that programs have 
dealt with the restrictions is to set up a closely connected 
but legally distinct organization. And there is a set of rules 
within the LSC regs as to what you can and can't do.
    There was an investigation by a prior LSC I.G. into 
programs where they were working out of the same office. 
Individuals were wearing both hats. The net result was lots and 
lots of restricted activities were being conducted in very, 
very close coordination with Legal Services.
    And in one case, the rent by the non-LSC group that was 
doing all the restricted activities hadn't been paid to the 
federally funded LSC group over a long period of time.
    And it was basically a loophole to get around what Congress 
said shouldn't be done with Federal funding.
    Mr. Franks. Well, I think, again, Mr. Chairman, that is 
another point that is a concern to us. The taxpayers that fund 
this--oftentimes, you know, they are obligated to do it under 
the laws. They do so to help poor people gain legal services 
that they need.
    And so when they find themselves funding these ideological-
driven issues that they may not necessarily agree with, then of 
course they--I think they reject that.
    So my last question is can you give us a little bit of a 
sense of what types of ideologically motivated lawsuits brought 
about the 1996 restrictions?
    Mr. Boehm. Yes. There are an awful lot of cases that I 
think were ideological, if not political. There was a 
celebrated case in 1997 where Legal Services tried to overturn 
an election in Texas by invalidating 800 absentee ballots filed 
by servicemen and women.
    These are people in Kosovo who were fighting for their 
country, received notice that they had to answer a 20-
something-page case within 3 days because Legal Services was 
trying to overturn the election.
    Now, in that particular case, they also asked for 
attorneys' fees, although attorneys' fees had just been banned. 
Fifty-eight United States senators wrote a letter, and the 
letter was drafted by Barbara Mikulski of Maryland, and it went 
to Janet Reno, the attorney general, saying, ``What in the 
world is Federal tax money going to try to invalidate service 
people's absentee ballot?'' If there is anybody in this country 
who should be entitled to an absentee ballot, it is somebody 
serving their country.
    I think that was a very celebrated case, but that 
illustrates the type of mischief there can be if there aren't, 
in fact, real reforms that operate in a real way.
    Mr. Franks. Well, thank you, Mr. Chairman. It also 
illustrates how difficult it would be in the U.S. Senate 
without those stalwart conservatives like Barbara Mikulski. 
[Laughter.]
    Mr. Cohen. The gentleman's time has expired.
    I now recognize the distinguished Chairman of the 
Committee, Mr. John Conyers of Michigan.
    Mr. Conyers. Thank you, Mr. Chairman.
    I hesitate to bring up my relationship with the Levi family 
because if the distinguished gentleman from North Carolina 
didn't know the senatorial witness that came over when he was 
in Congress, I don't know how ancient the history would be for 
him to find out that I knew his father, Ed Levi, when he was 
the attorney general. That could go back to maybe the Hayes-
Tilden controversy or---- [Laughter.]
    God knows where that would lead, but I think I ought to 
make full disclosure before he finds this out anyway.
    So I am happy to welcome Mr. Levi here today and I fondly 
remember his father. I was Subcommittee Chairman of Crime at 
the time that I appeared in the Department of Justice pretty 
regularly to have consultation with him.
    Now, Mr. Schanz, with your background, could--we want 
everybody to sleep more comfortably in their beds tonight. 
Could you help Mr. Boehm out on anything that you think would 
make him more receptive to the fact that moving ahead and 
making the improvements that are embodied in the Scott 
legislation more palatable?
    How can we make him feel better about this whole 
proposition that brings us here today?
    Mr. Schanz. I want to say a snide remark, but I won't. He 
and I will work behind the scenes, or me lobbying him 
successfully. But the real answer to your question, Mr. 
Conyers, is transparency. I mentioned that in my prepared 
statement. I mentioned that in my 5-minute monologue.
    But I firmly believe that if the funds maintain their 
Federal character all the way through the system and are 
transparent in their use, then there should not be a problem 
that we have found in the past in a lot of cases prior to my 
tenure here.
    I do believe that with my staff and with a new president 
and a new chairman we can make a lot of progress in the areas 
of accountability, responsibility and transparency. Now, 
whether I can convince Mr. Boehm of that remains to be seen. It 
depends on my lawyerly skills, how good I still am.
    Mr. Conyers. Well, I think for the short time that I met 
and heard and know him that he is a reasonable person. And the 
one thing I am so relieved about is that he did not call for a 
abolition of Legal Services, and you don't harbor that thought, 
or do you, sir?
    Mr. Boehm. I spent my first part of my adult career--I 
spent the first part of my adult career being a supporter of 
Legal Services. I wouldn't have gone over to work there if I 
hadn't. I worked for a congressman, who was a Republican 
congressman, who had supported Legal Services.
    Where I became very disenchanted was I saw firsthand the 
resistance to reforms that I thought were common-sense reforms. 
I think the real question is is the--is this program capable of 
the types of reforms that I think would have broad bipartisan 
support and then sticking to them.
    My concern is that the proposed reauthorization does away 
with the reforms that we have had since 1996. And I think most 
of them were pretty reasonable reforms. If it can't, I don't 
believe spending Federal money for a program that can just 
basically do whatever it wants, without even releasing--one of 
the things that is cut out is a list of the cases, the 
litigation cases.
    I don't know what policy reason you would give that the 
public and the Congress and even a taxpayer shouldn't know what 
cases are litigated with Federal funds. And yet that is one of 
the things that is on the cutting room floor with this 
legislation.
    So the real answer I think is if the program were 
accountable and did the reforms that I think there is broad 
support for, I don't think there would be any problem. I have 
got plenty of other things to do. But if it is just going to be 
a blank check and do whatever you want, including 
redistricting, I have serious problems with that.
    Mr. Conyers. Mr. Levi, can you give him any comfort in this 
discussion?
    Mr. Levi. Well, first of all, as it relates to the spending 
of the taxpayers' money, we want to make sure that every dollar 
is well spent.
    And I look forward to working with the inspector general 
and to making sure and assuring us internally that we have the 
best practices, modern practices, brought in to LSC throughout 
the country--there are 136 grantees--making sure that they are 
conducting their business affairs in the manner that you and we 
would hope.
    Mr. Conyers. Feeling better?
    Mr. Boehm. There are a couple of other issues we need to 
discuss.
    Mr. Conyers. All right. Last question. You co-founded the 
National Legal and Policy Center back in 1991. You are proud of 
that, I presume.
    Mr. Boehm. I was on the first board. And they were not 
involved in any of these activities because it was a one-person 
operation then.
    Mr. Conyers. With whom did you co-found it?
    Mr. Boehm. Peter T. Flaherty, who was its president.
    Mr. Conyers. Is he still around?
    Mr. Boehm. He is still around.
    Mr. Conyers. And then, finally, you are treasurer of one of 
the 10 largest political action committees in the country. What 
committee is that?
    Mr. Boehm. That was in 1980. I am much older than I think 
Mr. Cohen thought I was. I am 60. But that was in 1980. It was 
the Fund for a Conservative Majority. It was the third-largest 
political action committee in the country in the 1980 election 
cycle.
    Mr. Conyers. And so you are--you are, rightfully so, a 
proud Republican.
    Mr. Boehm. I have been a Republican. Sometimes I have been 
proud of that. [Laughter.]
    Mr. Conyers. Well, you are--well, let me ask you this. Are 
you proud of--sometimes proud of being a conservative 
Republican?
    Mr. Boehm. Yes.
    Mr. Conyers. And are you other times proud of being a--
proud of being a neoconservative Republican?
    Mr. Boehm. I don't know if I am a neoconservative, because 
I don't know what the official definition is. That used to 
apply to former Democrats, I think, in the Reagan years who 
went over and joined the Reagan administration.
    Mr. Conyers. Yes. I yield.
    Mr. Franks. Well, neoconservative means new conservative. 
It really is a--it is a liberal with a daughter in high school. 
[Laughter.]
    Mr. Boehm. Yes, that doesn't apply to me. I actually 
started out as a Democrat, if that makes you feel any better.
    Mr. Conyers. Well, a lot of people--Jarvis started out, I 
think, as a Democrat.
    Now, you believe that there is a constitutional right to 
everybody receiving equal justice.
    Mr. Boehm. A constitutional right, and you do also, under 
the Sixth Amendment, have a constitutional right----
    Mr. Conyers. Right.
    Mr. Boehm [continuing]. To an attorney.
    Mr. Conyers. Exactly. And the Sixth----
    Mr. Boehm [continuing]. Criminal cases.
    Mr. Conyers. Exactly. And do you have an idea--are you 
forming some ideas about a counter bill to the one that Scott's 
introduced? I mean, we seem to be reaching some agreements on 
some very significant points here.
    Would you submit to the Chairman of this Subcommittee the 
ideas around which you would find a bill to continue to promote 
Legal Services more to your liking?
    Mr. Boehm. Well, Congressman Conyers, I would be happy to. 
I testified before a Senate Committee 2 years ago on things 
that can be done that help the poor get better access to 
justice, and I would be happy to forward along those ideas.
    And there are a lot of very good ideas that aren't touched 
in this that I think ought to be considered that I think cross 
party and ideological lines, because the real problem is 
getting good legal representation is not only hard for the 
poor, it is hard for the middle class.
    And there is a lot of things that can be done that increase 
access to justice that can only be done on the Federal level 
that should be done.
    And again, I would be happy, Chairman Cohen, to forward 
along that information.
    Mr. Conyers. Thank you very much.
    Mr. Cohen. Thank you, Mr. Conyers.
    I now recognize the gentleman from Iowa, Mr. King.
    Mr. King. Thank you, Mr. Chairman.
    I thank the witnesses for their testimony, and I am 
swinging back and forth here as I listen to this. Now that I 
know about Mr. Boehm's complete and detailed political 
pedigree, all the way back 30-plus years, it looks pretty 
stellar to me.
    And I also am looking at a list here--but I direct my first 
question to Mr. Schanz, and that would be as you understand 
this legislation that is proposed that is the subject--H.R. 
3764--does it remove the prohibition to Legal Services 
Corporation and engaging in representing cases involving 
illegal aliens?
    I am going to give you the list--illegal aliens, abortion-
related litigation, prisoner advocacy, class action lawsuits, 
challenges to welfare reform, and congressional redistricting 
cases. Are those prohibitions all removed, as you understand 
the language in the legislation?
    Mr. Schanz. As I understand the language, no. My concern is 
a little more fundamental from an inspector general's point of 
view to being able to have the tools I need to enforce whatever 
restrictions this body--whatever Congress imposes on the Legal 
Services Corporation.
    I need to have access to the records. I need to have the 
specific identifiers of Federal versus non-Federal funds. There 
is a lot that--within the I.G. community----
    Mr. King. Okay.
    Mr. Schanz [continuing]. That I need to----
    Mr. King. Excuse me.
    Mr. Schanz [continuing]. Be able to have put into this 
legislation so we don't revert back to the days that Mr. Boehm 
remembers so vividly.
    Mr. King. And I would want you to have all of those tools 
to examine that thoroughly, and I would want transparency and 
sunlight. So I would turn to Mr. Levi.
    And of this list that I have read, is it your understanding 
that these prohibitions are removed under H.R. 3764?
    Mr. Levi. That is not my understanding.
    Mr. King. Could you then clarify to this Committee your 
understanding as to which provisions would be removed under 
3764?
    Mr. Levi. This is an issue that we are going into in terms 
of the corporation's view about restrictions, and I am 
concerned here because LSC is charged with enforcing the 
restrictions throughout the country. And in fact, we are 
currently doing that in court.
    We have staff in the field ensuring that our programs are 
complying with the restrictions. So as chairman of the board, I 
am really not comfortable speaking about any particular 
restrictions, and we will continue to enforce the will of 
Congress, whatever it would be.
    Mr. King. Okay. I thank you, Mr. Levi, and I am going to 
take it, then, that you are not speaking to the language in the 
bill but the current practice and the current statute in your 
response. Is that accurate?
    Mr. Levi. That is accurate.
    Mr. King. Okay, thank you. And then I would turn to Mr. 
Boehm.
    Your response to this--have you reviewed H.R. 3764 that was 
testified to by Senator Harkin? And would you understand that 
it removes restrictions?
    Mr. Boehm. It removes most of the restrictions--removes 
most of the restrictions that were put in in 1996. Otherwise 
are modified.
    On the prisoner restriction, it allows prisoner litigation 
but not for prisoner conditions. With respect to illegal 
aliens, it broadens the category exceptions of illegal aliens 
that can be represented, but it doesn't allow wholesale 
representation of illegal aliens.
    One of the real problems with all of these restrictions is 
that--is in the LSC act, which is if LSC does not enforce 
something--they are the only legal body to do this. And this is 
one of the reasons Senator Grassley has been so interested in 
Legal Services, is he was involved in this battle in the 
1980's.
    If LSC doesn't enforce any restriction--illegal aliens, you 
name it--nobody else has legal standing to do it. And the one 
time where a program was illegally lobbying, a Federal judge 
did a judicial finding that they were illegally lobbying, and 
Legal Services challenged that and said, ``Hey, we don't have 
to--we are not subject to judicial review. We are a 
501(c)(3).'' And they won, and they should have won, because 
legally they don't.
    And so essentially, they can do anything if LSC doesn't 
enforce it as a practical matter, and that is pretty----
    Mr. King. Okay. So there are two components, then. This 
proposed legislation loosens the restrictions, some 
dramatically, some incrementally, and the point that the 
enforcement of the restriction has to be within LSC themselves, 
then.
    Mr. Boehm. Right.
    Mr. King. And so let me pose this question, and it is 
really at this point not hypothetical, under current law or 
under H.R. 3764 as proposed, could the Legal Services 
Corporation be enlisted to join in a class action lawsuit 
challenging the constitutionally of ``Obamacare?''
    Mr. Boehm. Well, LSC itself wouldn't do it. It would be a--
a program can do that sort of thing. If they are allowed to do 
class actions, and they have a client and there is waiting 
rooms full of clients, I don't see why they couldn't bring the 
lawsuit.
    The problem is the decisions as to class actions, like 
lobbying, can be very, very subjective. Unlike all other 
Federal benefit programs, nobody has a right to be represented 
by Legal Services, and so the Legal Services lawyers have 
pretty wide discretion as to which cases they will take or 
don't take.
    Mr. King. Would you concede, Mr. Boehm, that I have 
proposed about the most improbable case that could be taken up 
by LSC----
    Mr. Boehm. Well----
    Mr. King [continuing]. Or their surrogates?
    Mr. Boehm [continuing]. Yes, that is pretty improbable.
    Mr. King. And that is because if I listened to your 
testimony that it sounds to me as though LSC has been very high 
percentage intensively populated with liberal activists. Could 
you explain to me why that would be, why that is--why we are 
looking at this from a political perspective?
    The Chairman, Mr. Conyers, asked you a whole series of 
questions about your political pedigree. But as I listen to the 
testimony here, I would suspect that the political pedigree of 
the people that are--a significant percentage of those within 
LSC would be the exact opposite of the pedigree that he has 
talked with you about. Why is that? What has brought that 
about?
    Mr. Boehm. Well, that has been the history since it was 
founded.
    Mr. King. Yes.
    Mr. Boehm. It was founded as part of the Great Society. 
Over the years, poor people who were home-schooling their kids 
who had legal needs and met the legal definition of poor 
invariably found Legal Services' doors were closed. You know, a 
poor gun owner who thought the registration rules--they 
wouldn't get the time of day.
    And so there always has been a double standard, and the 
double standard could be enforced because the decision to take 
or not take a case was so subjective and it was in the hands of 
the local Legal Services----
    Mr. King. Is the LSC to the right or the left of the ACLU?
    Mr. Boehm. I think they are----
    Mr. Cohen. I believe that question is beyond your 
knowledge.
    Mr. King. I would ask unanimous consent the gentleman be 
allowed to answer the question.
    Mr. Cohen. Five minutes has expired.
    Mr. King. Okay.
    Mr. Cohen. And so we are going to----
    Mr. Conyers. I ask unanimous consent that the gentleman be 
given an additional minute.
    Mr. Cohen. We always play bad cop and good cop, and he is 
the good cop.
    Go ahead.
    Mr. Boehm. I appreciate that. Well, I mean, the fact of the 
matter is frequently in the past they joined together in cases 
with the ACLU. That is public record. There are a lot of 
instances of that, so----
    Mr. King. And an adequate answer for me, and I thank you 
very much, all the witnesses.
    Mr. Chairman--Chairmen, I yield back the balance of my 
time, and I say thank you.
    Mr. Cohen. Thank you. Thank you, Mr. King.
    Before I recognize Mr. Watt, just to the--I was a history 
major. You said that Legal Services was formed during the Great 
Society. Wasn't it 1974?
    Mr. Boehm. In 1974 it became a corporation--in 1974 it 
became a corporation. It was actually the Office of Legal 
Services in the 1960's under the Great Society. It was very 
controversial. They decided they would spin it off as a 
corporation.
    And so the Legal Services program itself began in the 
1960's. I believe it was 1966. In 1974 what happened is it 
became a corporation. It was reauthorized once in 1977 and then 
that expired in 1980 and it has been the way ever since.
    Mr. Cohen. Well, I thank you. I mean, people can define the 
Great Society as being 1974. It just depends on your 
perspective. But----
    Mr. Boehm. Well----
    Mr. Cohen [continuing]. Thank you.
    Mr. Watt, you are recognized.
    Mr. Watt. Thank you, Mr. Chairman. I want to try to get us 
back to a less philosophically based discussion here, if I can, 
by asking a couple of practical questions.
    Mr. Schanz, Ms. Diller objected to one aspect of--what she 
understood your testimony to be, having to do with personal--
identification of personal information. Is this something that 
you would think would be an irreconcilable problem, or did you 
understand what she was saying?
    Mr. Schanz. Yes, sir, I did.
    Mr. Watt. Explain that to us a little bit and tell us how 
we might be able to reconcile that.
    Mr. Schanz. Well, first off, I don't think anything is 
unreconcilable. Secondarily, in order for me to perform the 
statutorily required duties of an inspector general, there are 
instances where in cases of fraud or embezzlement or potential 
fraud or embezzlement I would need access to client records to 
be able to identify whether or not a fraud has been perpetrated 
on the--on the Federal----
    Mr. Watt. So--so something that gave you that access under 
those circumstances might----
    Mr. Schanz. In this legislation----
    Mr. Watt [continuing]. Serve the purpose.
    Mr. Schanz [continuing]. That would be very helpful.
    Mr. Watt. Yes, okay. And what is the status of your access 
to that information now?
    Mr. Schanz. We have to litigate for that, and----
    Mr. Watt. So you are saying you don't have that access to 
individualized records now under existing law.
    Mr. Schanz. That is correct.
    Mr. Watt. Okay.
    Mr. Schanz. We have to litigate for that.
    Mr. Watt. So you are saying we need to amend existing law 
to try to tweak that in such a way that you can serve your 
purposes.
    Mr. Schanz. If I was to have the full powers of a 
presidentially appointed inspector general, yes. I would have 
those powers.
    Mr. Watt. All right. I am just trying to make sure I 
understand what we are trying to accomplish here, and--Mr. 
Boehm, Ms. Diller said--and I obviously agree--that it is a lot 
more efficient to litigate cases that have a class impact 
rather than doing it one by one by one, to do it as a class 
action.
    If we can put aside for the moment the categories of things 
that you would not want Legal Services to be involved in on a 
class action basis, would you agree with that general basic 
proposition?
    Mr. Boehm. Yes, I would.
    Mr. Watt. Okay. So if we could find some satisfactory way 
of delineating the--those kinds of cases, would you have some 
particular problem with Legal Services having the ability to do 
class action cases in some limited number of cases?
    Mr. Boehm. If you could come up, I think, with a screen or 
a set of criteria that would address the thing that I think 
most of the critics, especially in Congress are concerned 
about--that is, redirecting the focus toward good legal 
services--traditional legal services----
    Mr. Watt. All right. I----
    Mr. Boehm [continuing]. That is the criteria.
    Mr. Watt. Yes. So but you agree that it would be more 
efficient to do some categories of things through class action 
litigation than to individual by individual--I mean, the two 
things that I think of--I think it was Legal Services in North 
Carolina that actually stopped the kind of individual by 
individual setting of tenants out on the street.
    But it was a class action lawsuit, as I recall, that said 
landlords in general have to go through a process before they 
can set tenants out on the street.
    And I think it was actually a class action lawsuit in North 
Carolina that resulted in substantial benefit to disabled 
veterans and people with disabilities under--to be able to be 
eligible for Social Security benefits.
    Those kinds of things that are not controversial in a 
philosophical sense you wouldn't--you wouldn't have any problem 
with.
    Mr. Boehm. I think I would go beyond that, and I would say 
if those were the types of cases that Legal Services stuck to, 
there wouldn't be a controversy. The unfortunate history was--
--
    Mr. Watt. Well, I am not dwelling on how we got here. You 
know, I heard a lot of discussion on how we got here. I am 
trying to--I am trying to pick up here and move us beyond where 
we are and get us back to some kind of rational set of rules 
going forward.
    You know, it is just--it is hard for me to get in--involved 
in a discussion about whether Legal Services is to the right of 
or left of the ACLU and all of that stuff. That is history. I 
am trying to figure out how we can move forward in a very 
constructive way.
    So my time has expired, and I will--I will hopefully segue 
to some more rational discussion with my colleagues down the 
way here. I will yield back.
    Mr. Cohen. Thank you, Mr. Watt. I appreciate it.
    And now with the burden of having more rational discussion 
is the Chairman of the Constitutional--the Committee on--on 
Antitrust, Mr. Johnson from Georgia.
    Mr. Johnson. Well, thank you, Mr. Chairman.
    And a little rationality here in the face of a lot of 
intellectual gymnastics that we have been playing this 
morning--poor people, people without the means to participate 
in our justice system, without any assistance whatsoever from 
either government or from the private charitable interests that 
exist is indeed unsettling to me.
    And I am not one of those who grew up in a gilded setting 
as a child--you know, nannies, trips to Europe on vacation, 
spending weekends at the vacation home down on the ocean, you 
know, participating in horse riding activities, polo and all of 
the other----
    Mr. Cohen. Cotillion? Were you in cotillion?
    Mr. Johnson. I was not even in the cotillion.
    Mr. Cohen. Oh, my God.
    Mr. Johnson. Not in the Jack and Jill or any of those 
organizations. And that was so unfortunate.
    Mr. Cohen. The Chairman is coming to tears. Please.
    Mr. Johnson. I have been so deprived, and--of the finer 
things in life, and--but I did get a chance to meet a couple of 
poor people during my matriculation through school.
    I knew some who didn't smell the best--we used to make fun 
of them--some who did not wear the finest clothes, and some 
who, you know, just were good people, but they were doing their 
best but their circumstances were limited.
    And I have always been for the underdog. I have always been 
for the people who don't have the power. That is my prejudice. 
That is where I am coming from. My views are prejudiced.
    And so when we talk about waste and fraud and abuse in a 
$420 million budget item, Legal Services Corporation funding--
and right after I come from an Armed Services Committee hearing 
where at some points the armed services has to declare a period 
of time for vehicles to be turned in, Humvees, tanks, all kinds 
of vehicles, to be turned into--or back into the military's 
accounting system, if you will, or inventory system, after they 
have been lost track of, billions of dollars, and inspector 
general's not able to eke out a savings for the taxpayers in 
five, $600-billion-a-year budgets, and then I come over here 
and I hear from folks who want to say that--or imply that a 
$420 million program is riddled with fraud and waste and abuse.
    It pains me. It makes me angry, especially knowing that 
there has been a onslaught, an assault, against the Legal 
Services Corporation and against the movement to help poor 
people be a part of this system of equal justice for all, 
especially when I know that since 1980 we have been getting 
government off the backs of the people.
    After we had a campaign kickoff in Philadelphia, 
Mississippi where only 13, 14 years prior three--Viola Liuzzo 
from Detroit had been murdered, Turner--I mean----
    Mr. Cohen. Schwerner, Chaney and Goodman. Liuzzo made a----
    Mr. Johnson. Well, I think----
    Mr. Cohen. Liuzzo was an Alabama victim.
    Mr. Johnson. Less than 13, 14 years later we have an 
announcement for president in Philadelphia, Mississippi where 
those killings took place. And then we have been opposed to any 
efforts to help people, to help poor people.
    I am just astounded by, you know, what I have heard here 
today, the heartlessness that is on display when folks have not 
even met a poor person, don't have any feeling for them one way 
or the other--mostly, though, despise them and wish that they 
could be avoided.
    And so those are my impressions of our political climate. 
It is not about making sure that it is--government monies are 
used effectively. It is about depriving people of their right 
to legal services that they cannot afford so that business can 
go on as usual, so that we can--we can continue to use our 
voting laws in a way so as to deprive people of their right to 
vote. And our history of doing that in this country is well 
documented.
    And we don't want people to be able to be able to address 
those concerns through government money to LSC. We don't want 
government funds to be used to file class action lawsuits 
against entities like the old Fleet Finance that was found to 
have engaged in predatory lending back in the 1990's.
    If we had been able to file class action lawsuits, legal 
aid, against banks that participated in predatory lending 
during the early years of this century and the late years of 
the previous decade, we could have avoided a $700 billion 
taxpayer bailout.
    And so if we had been able to claim attorneys' fees for 
engaging in that litigation, then we could have had money that 
would replenish the operation--the operating budget of LSC at 
no cost to the taxpayers.
    And my last comment, Mr. Chairman, is this. Here I see a 
letter from the Chamber of Commerce opposing H.R. 3764 which 
Mr. Scott has offered and which is a very important piece of 
legislation. Chamber of Commerce, opposed.
    Thank you, Mr. Chairman.
    Mr. Cohen. Thank you, sir. I appreciate your statement.
    And now Mr. Scott, the Chairman of the Subcommittee on 
Criminal Law and the sponsor of this legislation and 
distinguished champion of justice, is recognized.
    Mr. Scott. Thank you, Mr. Chairman.
    Mr. Levi, somebody made a comment--I think it was Mr. 
Boehm--that the receipt of these funds would not be categorized 
as Federal funds for the purpose of the antifraud statutes. Did 
you want to respond to that?
    Mr. Levi. I am sorry. I am not familiar with that question. 
I am sorry. I didn't hear that.
    Mr. Schanz. Mr. Scott, that would have been me. I do want 
to correct for the record that also. As the current law exists 
in 1996, the 1996 law, we do have access to client names and 
records through Section 509(h). We want to see that maintained 
in your piece of legislation.
    The one thing as an inspector general that we have to be 
very wary of is that we trace the Federal dollars. The former 
chairman of the board of the LSC said, you know, find where the 
money goes. And it is part of the I.G.--that is, part of my 
statutory responsibility--to find out where the Federal 
dollars--that they continue to maintain their identity.
    And that is why there has been a distinction between LSC-
funded programs and restrictions inherent in that, and non-LSC 
funds have been in the past subject to the same restrictions as 
the federally funded LSC monies.
    Mr. Scott. So that if you receive Federal funds and 
essentially steal it, it is not--it is a Federal offense? I am 
trying to understand what--I can't imagine Mr. Levi has a 
problem with someone being charged with a Federal offense for 
abusing Federal funds.
    Mr. Levi. No, not at all.
    Mr. Scott. And so we will--well, we will follow through 
with that.
    You mentioned, Mr. Schanz, the access to client names. This 
isn't the only agency that involves state bar regulations on 
ethics and confidentiality. How do other agencies deal with 
maintaining confidentiality and ethical--and avoid ethical 
violations and still allow oversight and accountability? How do 
other agencies deal with that?
    Mr. Schanz. Well, my most recent example would be my 30-
plus years in the U.S. Department of Justice where we were, as 
an I.G., able to obtain confidential informants' names to 
determine whether the funds were being protected properly or 
whether they were being sold back on the street.
    So we were able to, as an inspector general--in that 
situation we had top-secret clearances, and in some cases M 
clearances, to make sure that nothing ever came out of the 
I.G.'s office that would in--that would put into danger any 
confidential informant or any drug buys----
    Mr. Scott. That is confidential informant. I am talking 
about normal legal representation. Do you have access to client 
files in other agencies?
    Mr. Schanz. Yes.
    Mr. Scott. And----
    Mr. Schanz. Ones that I am aware of, yes.
    Mr. Scott [continuing]. If we could see what you have done 
in other agencies, that would help us deal with the problem we 
have got with the legal aid programs.
    Mr. Schanz. I will get back to you on that very shortly.
    Mr. Scott. Now, Ms. Diller, you mentioned the drug-related 
evictions. If someone can prove--if a defendant can prove his 
innocence, what happens in the meanwhile to the relatives that 
live in that household?
    Ms. Diller. Well, they may well have been evicted during 
that time, because as the law stands right now, just the mere 
charge of some sort of drug-related crime is enough to 
disqualify you from eligibility. So when you have----
    Mr. Scott. Well, when----
    Ms. Diller [continuing]. A whole family----
    Mr. Scott [continuing]. When you say--when you say ``you,'' 
you mean the whole family?
    Ms. Diller. Well, that client who may have family members, 
may have children living with them--they are not eligible for 
representation at that point.
    Mr. Scott. And they can be evicted. Do they have any 
recourse?
    Ms. Diller. At that point there is nothing you can do. And 
so that is why this language would be a big improvement to 
address that problem.
    Mr. Scott. And if you are not allowing class actions, how 
would you--Ms. Diller, how would you deal with systematic 
ripoffs, systematic abuses like failure to comply with Fair 
Labor Standards Act, failure to pay minimum wage, failure to 
withhold Social Security? How would you deal with that if you 
can't use a class action?
    Ms. Diller. Well, you simply can't deal with it in the most 
effective way. What you can do is you can represent one client 
at a time, which is the most labor-intensive and inefficient 
way to go about dealing with those problems.
    You can't really mount an effective deterrence to those who 
are implementing these schemes on low-income communities. And 
you can't get broad widespread relief. So you can represent an 
individual client, but then you have got to keep doing that 
over and over and over again, and you don't reach as many 
people.
    Mr. Scott. Thank you.
    Thank you, Mr. Chairman.
    Mr. Cohen. Thank you, Mr. Scott.
    I now recognize----
    Mr. Scott. Mr. Chairman, could I ask unanimous consent to 
enter into the record a letter from numerous organizations in 
support of the legislation?
    Mr. Cohen. That can be done, and I believe Mr. Franks wants 
to enter into the record a letter from an organization that is 
against the legislation, and that will be granted without 
objection as well.
    [The information referred to follows:]

    
    
    
    
    
    
                               __________

    Mr. Franks. Actually, Mr. Chairman, I have three, the 
letter from the U.S. Chamber of Commerce to you and to me, and 
the letter from Senator Grassley and Mr. Issa and myself to LSC 
Inspector General Jeff Schanz, and then the October 15th letter 
from LSC I.G. Jeff Schanz to you and to me.
    Mr. Cohen. Anything personal in those letters to me? I 
didn't----
    Mr. Franks. Yes, I just think you should read them.
    Mr. Cohen. Thank you. Thank you. Without objection, they 
will be entered into the record, all of them.
    [The information referred to follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                               __________

    Mr. Cohen. Ms. Chu, the distinguished lady from the state 
of California, is recognized for 5 minutes.
    Ms. Chu. Thank you, Mr. Chair.
    Ms. Diller, there have been many questions about the 
restrictions in the Civil Access to Justice Act and the effect 
of these restrictions on both Federal and non-Federal funds. 
Can you clarify how the restrictions in the bill will affect 
organizations that accept LSC funds and distinguish between the 
LSC funds or non-LSC funds?
    Ms. Diller. Sure. So first of all, it is a very important 
distinction. What the bill would do primarily is lift 
restrictions on non-LSC funds, with some exceptions--notably, 
the exception related to abortion litigation. That would be 
prohibited with any funds.
    And then the bill would treat differently some of the 
prohibited categories of representation under the 1996 rider 
with Federal funds. So for example, class actions would be 
permitted to be brought with Federal funds. Certain types of 
administrative and legislative advocacy could be done.
    But there are some categories where Federal funds would not 
be allowed to be used, and those are prison conditions cases. 
Those are the cases that have been restricted under the 
original LSC act, that have been restricted for all these 
years. So there still are a number of restrictions in place 
both on Federal funds and this one restriction still on non-
Federal funds.
    Ms. Chu. And it is important to distinguish the fact that 
certain funds would be allowed for non-LSC versus LSC funds.
    Ms. Diller. Yes. I mean, it is completely out of line with 
the way the Federal Government treats grantees. LSC grants 
money to independent local nonprofit organizations. And as I 
said earlier, they receive funds from a variety of sources. 
Sixty percent of the funds come from non-LSC sources.
    And it is completely out of the ordinary for Congress to 
restrict how states spend their money, how local governments 
spend their money, how private donors spend their money. That 
is not the norm by any means. This is virtually the only 
program that operates under that kind of really overarching 
Federal restriction.
    Ms. Chu. My office was recently contacted by the Chamber of 
Commerce who argued that--they say this ``Class action 
litigation is known for providing very little benefit to class 
members and great benefits to those attorneys involved in the 
litigation. Scarce taxpayer dollars should not be used to fund 
such an expansion of speculative, costly and unwise private 
litigation at any time, and especially not in today's 
vulnerable economic climate.''
    Can you explain how LSC grantees will use class action 
lawsuits if these restrictions are lifted? And also, the 
chamber charges that attorneys involved with class action 
lawsuits for indigent clients will benefit monetarily from the 
litigation. Can you respond to all of this?
    Ms. Diller. Yes. I mean, it is simply not true that 
attorneys will benefit monetarily from that litigation. These 
are not the type of class actions that we hear so much about, 
like securities class actions or product liability class 
actions, where an attorney gets a third of the proceeds of the 
class action.
    I mean, these are not that kind of class action. These are 
class actions usually for broad injunctive relief, usually to 
stop the kind of predatory practices that Mr. Scott mentioned 
and that we have talked about earlier today. These are not 
money-making things by any means.
    And these are Legal Services attorneys who work on, I 
should say, the lowest salaries in the profession to help low-
income people. And so there is not a monetary incentive for 
them to bring these big class actions.
    What the language change would do is it would just allow 
them to help more people more efficiently.
    Ms. Chu. In fact, what options are available to low-income 
families on the--on the foreclosure issue? I know you talked 
about that earlier in your testimony and the fact that these 
low-income persons are subject to lots of scams. What 
alternative is available to them without this class action 
ability?
    Ms. Diller. Well, I should say that, first of all, the 
programs are representing individual families and individuals 
in foreclosure cases. They are overwhelmed with them. I believe 
former president Helaine Barnett at one point testified that 
they were having to turn away two for every case that they 
could take.
    But the problem that we have seen is that in a lot of 
places foreclosures were the product of predatory lending 
practices, and so there has not been an effective way to combat 
those practices without the class action mechanisms. Then there 
is the subsidiary issue of things--businesses cropping up, 
scams cropping up, that are preying on the very distress of the 
homeowners who are facing foreclosure.
    And again, Legal Services offices have not been able to 
effectively combat those because of the fact that when you 
handle an individual case, the defendant or the--you know, it 
may be a plaintiff depending on the case--but the entity that 
has perpetrated the scam can write off an individual case as 
merely the cost of doing business, whereas if you are able to 
get broader relief, able to get relief for the whole class of 
victims affected, you have a much more efficient and effective 
response to those kind of practices.
    Ms. Chu. Thank you.
    I see my time is up, and I yield back.
    Mr. Cohen. Thank you so much.
    Before we adjourn and allow me to quelch my hunger, I do 
want to ask Ms. Diller or Mr. Boehm, is current law that if you 
are charged with the possession of a drug offense that you 
can't get Legal Services representation?
    Mr. Boehm. No.
    Mr. Cohen. Excuse me?
    Mr. Boehm. No.
    Mr. Cohen. No. What is----
    Mr. Boehm. Current law, meaning the 1996 restrictions----
    Mr. Cohen. Yes, sir.
    Mr. Boehm [continuing]. Was sale or distribution----
    Mr. Cohen. Okay.
    Mr. Boehm [continuing]. Only, and it had another thing, 
which is public housing only. So those were the two key factors 
as to what was restricted.
    Mr. Cohen. Great. It is not as onerous as I thought. It is 
still onerous, but not onerous to the end.
    And I thank each of the witnesses for their testimony 
today.
    Without objection, Members will have 5 legislative days to 
submit any additional written questions--the witnesses, as you 
answer promptly as you can and be made part of the record.
    Without objection, the record will remain open for 5 
legislative days for the submission of any other additional 
materials.
    Again, I thank everyone for their time and patience and 
participation and service. This hearing of the Subcommittee on 
Commercial and Administrative Law is adjourned.
    [Whereupon, at 1:13 p.m., the Subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

    Response to Post-Hearing Questions from John G. Levi, Chairman, 
             Board of Directors, Legal Services Corporation



































                                

      Response to Post-Hearing Questions from Jeffrey E. Schanz, 
             Inspector General, Legal Services Corporation





































































                                

  Response to Post-Hearing Questions from Kenneth F. Boehm, Chairman,
                    National Legal and Policy Center



































                                

    Response to Post-Hearing Questions from Rebekah Diller, Deputy 
Director, Justice Program, Brennan Center for Justice at NYU School of 
                                  Law









































                                

 Material submitted by the Honorable Trent Franks, a Representative in 
Congress from the State of Arizona, Member, Committee on the Judiciary, 
 and Ranking Member, Subcommittee on Commercial and Administrative Law


























                                

 Material submitted by the Honorable Steve Cohen, a Representative in 
  Congress from the State of Tennessee, and Chairman, Subcommittee on 
                   Commercial and Administrative Law








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Material submitted by Rebekah Diller, Deputy Director, Justice Program, 
            Brennan Center for Justice at NYU School of Law
























































                                 
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