[Congressional Record (Bound Edition), Volume 149 (2003), Part 9]
[Senate]
[Pages 12062-12064]
[From the U.S. Government Publishing Office, www.gpo.gov]


           UNFAIR RESTRICTIONS ON LEGAL SERVICES CORPORATION

  Mr. KENNEDY. Mr. President, many of us are increasingly concerned 
about the unfair restrictions on non-profit legal services providers 
under current Federal law who receive both Federal funds and private 
funds.
  In 1996, Congress severely weakened the ability of many legal service 
providers to represent needy clients. Under the restrictions enacted 
that year, organizations that receive funds from the Legal Services 
Corporation are no longer permitted to use private funds to represent 
certain categories of low-income clients. The only way these providers 
now offer assistance to these clients is to set up a separate office 
that receives no Federal funds. To do so has turned out to be 
prohibitive for many for many grantees of the corporation.
  The restrictions impose high costs on legal services providers and 
unwarranted governmental interference with their other charitable 
initiatives, and they undermine the promise of equal justice for their 
clients.
  Often, the results of these restrictions have been devastating. Many 
faith-based organizations that represent the poor have decided not to 
accept funds from the corporation, so

[[Page 12063]]

that they can continue to help low-income clients to meet their basic 
legal needs. In fact, the administration is now in court defending the 
law, even though it burdens the use of private philanthropy by grantees 
of the corporation. If the administration prevails in court, it will 
have created a legal precedent that jeopardizes the President's faith-
based initiatives.
  The corporation's grantees should be treated in the same way that all 
other non-profit organizations, both secular and faith-based, are 
treated. They should be allowed to use their private funds to alleviate 
the critical need for legal services. The restrictions are an unjust 
barrier for the Nation's neediest individuals and families who need our 
help the most. I urge my colleagues to remove these restrictions and to 
reopen the doors of justice for those who are unable to afford the 
legal representation they deserve in protecting their basic rights.
  I ask unanimous consent that an article from the Chronicle of 
Philanthropy earlier this year and an article from the Legal Times last 
fall on this issue be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

           [From the Chronicle of Philanthropy Feb. 20, 2003]

             White House Takes Opposing Views on Charities

                           (By Laura K. Abel)

       President Bush's Budget for fiscal 2004, submitted to 
     Congress this month, contains millions in federal dollars to 
     help religious groups. That follows his executive order in 
     December in which he commanded sweeping changes he said would 
     ``remove barriers that prevent faith-based and grass-roots 
     groups from doing more to help Americans in need.''
       The executive order put in place many of the ideas Mr. Bush 
     has been pressing Congress to pass, but which have been 
     stalled by debate over the propriety of mixing government and 
     religion. The executive order, which allows federally 
     financed charities to display religious icons and follow the 
     tenets of their faith in selecting employees, is almost 
     certain to be challenged in federal court by people seeking 
     to protect firm separation of church and state.
       But Mr. Bush has even more to worry about than court action 
     by his political opponents. His own administration is causing 
     plenty of potential trouble by arguing in a New York court to 
     establish a legal precedent that could lead to the unraveling 
     of Mr. Bush's efforts to help religious groups.
       The court case at issue involves the Legal Services 
     Corporation, which uses federal funds to provide lawyers in 
     civil cases to people who cannot afford them. The corporation 
     is being sued by nonprofit legal-aid groups that hope to 
     prove that a law Congress passed in 1996, and a regulation 
     issued to carry out that law, are unconstitutional. Under the 
     law and regulation, legal aid programs that receive even a 
     dollar from the Legal Services Corporation are required to 
     separate their government-financed activities from certain 
     privately supported activities in ways that are both 
     impractical and very costly to administer. Among the 
     privately supported activities that must be kept separate: 
     helping asylum seekers who need court protection against 
     abusive spouses, helping victims of predatory lenders testify 
     before their legislatures, and representing children seeking 
     improved public schools.
       The regulation the administration is defending requires 
     legal-aid programs to keep those activities physically 
     separate from their government-financed activities. It also 
     limits the ability of legal-aid employees to divide their 
     time between federally supported activities and activities 
     the government won't support.
       The result is that the programs' scarce private charitable 
     donations must either be used only for programs that the 
     federal government wants to support or be diverted to 
     establishing separate facilities and employing separate 
     personnel. Though the idea of keeping federally financed and 
     charitably financed activities separate may seem appropriate 
     to some, what it has meant in practice is that for nonprofit 
     legal-aid groups to receive federal funds, they must give up 
     doing some of the things that their clients most need. And 
     foundations and other private donors that want to support 
     legal-aid groups often find that some of the projects they 
     most want to support can't be carried out.
       For instance, when South Brooklyn Legal Services received a 
     grant from the New York Foundation to help small groups that 
     provide child care, it wanted to use some of the money to 
     take New York City to court to protect the rights of those 
     providers. The city, which reimburses the child-care 
     providers for their services, had been shortchanging them by 
     calculating the reimbursement based on a four-week month 
     rather than on the more accurate 4.3-week month. But because 
     the South Brooklyn group receives some money from the Legal 
     Services Corporation, it could not undertake such a lawsuit 
     even with its money from the New York Foundation. To do so it 
     would have had to set up two separate offices. It didn't have 
     the money to do that, so it had to drop the idea of the 
     lawsuit and instead use its foundation grant only in ways 
     that the federal government allowed.
       That is precisely the type of roadblock to charitable 
     giving and nonprofit entrepreneurship that the Bush 
     administration seeks to remove in its efforts to help 
     religious groups. Last month, for instance, the 
     administration said that churches, synagogues, and other 
     houses of worship could obtain federal construction aid so 
     long as at least part of the building was used to provide 
     social services. To be sure, the administration said federal 
     aid couldn't be used to construct sanctuaries or other parts 
     of the building used for worship, but it did not require 
     separate staff members or other administrative approaches to 
     separating the government-subsidized activities from those 
     supported entirely by private sources. And in his executive 
     order, the president allowed organizations to conduct 
     federally financed activities in rooms with religious symbols 
     hanging on the wall, and to permit employees to split time 
     between religious and federally financed activities.
       The president's goal is obvious: to avoid requiring 
     nonprofit groups, like the religious ones he wants to help, 
     to operate two entirely separate facilities in which to 
     conduct their federally financed activities and their 
     privately supported ones. If he wants to protect religious 
     groups from having to operate entirely separate sets of 
     facilities, even at the risk of being sued for violating the 
     separation of church and state, why is he willing to impose 
     such a requirement on legal-aid groups that serve the same 
     needy people?
       It's not just for consistency's sake that Mr. Bush should 
     change his administration's position in the Legal Services 
     Corporation case. In that case, the legal-aid programs argue 
     that, because the activities they are forced to keep separate 
     constitute ``speech'' protected by the First Amendment to the 
     U.S. Constitution, the government is constitutionally 
     prohibited from imposing a requirement that the activities be 
     kept separate. What's more, they say the government isn't 
     allowed to make those activities more expensive and more 
     complicated unless it has sufficient justification. In its 
     court filings, the government responds that it will seem to 
     be endorsing the work of legal-aid programs unless activities 
     the government supports are clearly separated from the 
     charitably financed legal-aid activities the government does 
     not want to support.
       If that argument is upheld by the court, then won't the 
     government be endorsing the views of religious groups unless 
     it requires completely separate operations? To comply with 
     the constitutional mandate not to endorse religion, the 
     government will have to require the same amount of separation 
     between the religious activities of charities and the 
     activities that the federal government supports as it 
     requires for legal-aid programs. Religious groups that 
     receive any federal funds will then need to conduct their 
     religious activities in separate offices, and to maintain 
     tight limits on the ability of employees to split their time 
     between federally financed and religious activities.
       If the president really wants his faith-based plan to pass 
     constitutional muster, he should change his strategy on the 
     Legal Services Corporation case now and give legal-aid groups 
     the freedom they deserve.
                                  ____


                 [From the Legal Times, Sept. 30, 2002]

 Drawing Lines for Dollars--Scientists Get Federal and Private Funding 
              Under One Roof. Why Can't Legal Aid Lawyers?

                           (By Laura K. Abel)

       No one has ever called the stem cell debate rational or 
     straightforward. But when it comes to understanding how the 
     government tries to control privately funded initiatives--
     even in seemingly unrelated areas like civil legal aid for 
     the poor--the stem cell debate can be brilliantly 
     illuminating.
       In 2001, President George W. Bush warned that ``a 
     fundamental moral line'' prevented the federal government 
     from endorsing or funding stem cell research that would 
     result in ``further destruction of human embryos.'' Based on 
     the president's directive, and on federal policy in place 
     since 1994, scientists working on stem cell research had been 
     compelled to establish two separate laboratories: one for 
     their publicly funded stem cell research, the other for the 
     privately funded stem cell research prohibited by the federal 
     government.
       Such duplication is incredibly expensive. Who can afford 
     two sets of laboratory equipment? What scientist wants to 
     squander precious time moving back and forth between labs? 
     What edge in conquering disease is lost when scientists 
     operate in relative isolation from each other, without the 
     benefit of views routinely shared by colleagues occupying the 
     same office space? How many talented scientists avoid the 
     entire field of stem cell research because of these 
     bureaucratic hurdles?


                          side-by-side dollars

       Recognizing these concerns, this past spring the National 
     Institutes of Health told

[[Page 12064]]

     government-funded scientists that it is OK to conduct 
     privately funded stem cell research alongside their federally 
     funded research, so long as they use rigorous bookkeeping 
     methods to ensure that only private dollars pay for the stem 
     cell experiments. This directive follows governmentwide 
     accounting standards that have been in place for more than a 
     quarter-century.
       Lawyers for the poor whose work is financed with both 
     federal and private funding have been paying close attention 
     to the NIH's instructions. In 1996, Congress prohibited these 
     legal aid lawyers from using private funds to engage in a 
     wide range of activities. These activities include 
     representing low-income people in class actions, representing 
     many documented immigrants, representing clients before 
     legislatures and administrative agencies, and many other 
     important activities. The Legal Services Corp., which funnels 
     the federal money to the lawyers . . . order to engage in 
     these activities they must set up physically separate offices 
     that receive no federal funding.
       Like the federally funded scientists, lawyers representing 
     the poor have found operating out of two sets of offices to 
     be wasteful, duplicative, and bureaucratic. Ultimately, it is 
     vulnerable clients who suffer the consequences. Just as the 
     forced duplication of research drains resources from efforts 
     to cure diseases, the forced duplication of legal aid 
     programs drains resources needed by low-income women seeking 
     protection from domestic violence, children attempting to 
     secure essential medical treatment, elderly citizens fighting 
     predatory lenders, and farmers struggling to save their land.
       Under the current rules, lawyers are forced to pay for two 
     sets of offices, computer systems, and other equipment. 
     Lawyers must spend time commuting between different offices, 
     wasting time that their clients desperately need. And, 
     perhaps most destructive of all is the effect on lawyers 
     conducting class action litigation offering the prospect of 
     relief to substantial numbers of individuals. Those lawyers 
     paid for with private money find it hard to communicate with 
     the lawyers working to meet day-to-day legal needs of 
     individual clients with federal funding, making both sets of 
     lawyers less effective.
       Legal aid lawyers and their clients find hope in the NIH's 
     common-sense policy clarification. The federal government 
     wants neither to fund, nor to endorse, forbidden stem cell 
     research. The NIH policy, which reflects cost principles that 
     have been in place since at least the Reagan administration, 
     recognizes that physically separate facilities are not needed 
     to achieve these goals. All that is required is adherence to 
     rigorous bookkeeping practices that follow accepted 
     accounting principles, so that auditors can determine that 
     government funds were not spent on the disallowed activities.


                           THE SAME SOLUTION

       It would seem that Congress should embrace this same 
     solution for its concerns about LSC grantees, allowing the 
     duplication and inefficiencies faced by legal aid to come to 
     a stop. But instead, the government has spent the last five 
     years in federal court, relentlessly resisting a 
     constitutional challenge to the physical-separation 
     requirement for legal aid lawyers.
       The government's inconsistent positions in the stem cell 
     research context and in the legal aid context are surprising. 
     The importance of medical research weighs . . . unimpeded 
     with private funding. There are equally strong (if not 
     stronger) policy and constitutional arguments in favor of 
     allowing legal aid lawyers to use their private funding to 
     represent low-income clients who would otherwise have no 
     access to our system of justice.
       After all, there is no federal policy against using the 
     class action mechanism. Indeed, Congress and the courts have 
     recognized that class actions can have significant benefits 
     for litigants and for the judicial system. Nor is there a 
     federal policy against providing the representation that 
     helps protect immigrants against exploitation (and in the 
     process assists courts that would otherwise have to expend 
     resources dealing with unrepresented litigants). Nor is there 
     a federal policy against helping low-income individuals 
     educate legislatures about the problems facing their 
     communities. On the contrary, the interests of equal justice 
     for all are better served when legal aid attorneys engage in 
     each of these activities.
       This lack of a policy justification for the physical-
     separation requirement is particularly appalling because the 
     requirement intrudes on the constitutionally protected 
     ability of legal aid lawyers and their clients to associate 
     together in order to enforce the clients' rights. As the 
     Supreme Court has warned, ``Collective activity undertaken to 
     obtain meaningful access to the courts is a fundamental right 
     within the protection of the First Amendment.''
       For many thousands of poor people, legal aid offices that 
     receive some federal funding offer the only avenue to 
     justice. And, for many legal aid clients, it is about even 
     more than justice. Like the patients who hope stem cell 
     research will save their lives, they are focused on basic 
     survival: a roof over their heads, escape from a batterer, 
     the ability to buy food and protect their children. By 
     requiring costly physical separation instead of the standard 
     accounting practices that can ensure that federal dollars do 
     not fund certain types of legal aid, Congress and the LSC 
     have severely hobbled legal aid advocates, undermining their 
     efficiency, interrupting their clients' lives, and impeding 
     the goal of equal justice for all. Justice demands that the 
     re-examine this decision.

                          ____________________