[Senate Hearing 110-655] [From the U.S. Government Publishing Office] S. Hrg. 110-655 CLOSING THE JUSTICE GAP: PROVIDING CIVIL LEGAL ASSISTANCE TO LOW-INCOME AMERICANS ======================================================================= HEARING before the COMMITTEE ON THE JUDICIARY UNITED STATES SENATE ONE HUNDRED TENTH CONGRESS SECOND SESSION __________ MAY 22, 2008 __________ Serial No. J-110-95 __________ Printed for the use of the Committee on the Judiciary U.S. GOVERNMENT PRINTING OFFICE 45-653 PDF WASHINGTON DC: 2008 --------------------------------------------------------------------- For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800 Fax: (202) 512�092104 Mail: Stop IDCC, Washington, DC 20402�090001 COMMITTEE ON THE JUDICIARY PATRICK J. LEAHY, Vermont, Chairman EDWARD M. KENNEDY, Massachusetts ARLEN SPECTER, Pennsylvania JOSEPH R. BIDEN, Jr., Delaware ORRIN G. HATCH, Utah HERB KOHL, Wisconsin CHARLES E. GRASSLEY, Iowa DIANNE FEINSTEIN, California JON KYL, Arizona RUSSELL D. FEINGOLD, Wisconsin JEFF SESSIONS, Alabama CHARLES E. SCHUMER, New York LINDSEY O. GRAHAM, South Carolina RICHARD J. DURBIN, Illinois JOHN CORNYN, Texas BENJAMIN L. CARDIN, Maryland SAM BROWNBACK, Kansas SHELDON WHITEHOUSE, Rhode Island TOM COBURN, Oklahoma Bruce A. Cohen, Chief Counsel and Staff Director Stephanie A. Middleton, Republican Staff Director Nicholas A. Rossi, Republican Chief Counsel C O N T E N T S ---------- STATEMENTS OF COMMITTEE MEMBERS Page Cardin, Benjamin L., a U.S. Senator from the State of Maryland... 1 prepared statement........................................... 143 Feingold, Hon. Russell D., a U.S. Senator from the State of Wisconsin, prepared statement.................................. 154 Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa, prepared statement............................................. 175 Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont, prepared statement............................................. 197 WITNESSES Barnett, Helaine M., President, Legal Services Corporation, Washington, D.C.; accompanied by Jonann C. Chiles, Member, Board of Directors, Legal Services Corporation, Little Rock, Arkansas....................................................... 4 Boehm, Kenneth F., Chairman, National Legal and Policy Center, Falls Church, Virginia......................................... 21 Diller, Rebekah, Deputy Director, Justice Program, Brennan Center for Justice, New York University Law School, New York, New York 27 Franzel, Jeanette M., Director, Financial Management and Assurance, U.S. Government Accountability Office, Washington, D.C............................................................ 24 Joseph, Wilhelm H., Jr., Executive Director, Maryland Legal Aid Bureau, Inc., Baltimore, Maryland.............................. 19 Livingston, Lora J., Judge, 261st District Court (Texas), Austin, Texas, and Member, Standing Committee on Legal Aid and Indigent Defendants, American Bar Association........................... 15 Wallace, Jo-Ann, President and Chief Executive Officer, National Legal Aid and Defender Association, Washington, D.C............ 17 QUESTIONS AND ANSWERS Responses of Helaine M. Barnett to questions submitted by Senators Sessions and Grassley................................. 35 Responses of Jonann C. Chiles to questions submitted by Senator Sessions....................................................... 103 Responses of Jeanette M. Franzel to questions submitted by Senator Sessions............................................... 106 SUBMISSIONS FOR THE RECORD American Bar Association, Thomas M. Susman, Washington, D.C., letter and attachments......................................... 108 Associated Press: August 15, 2006, article..................................... 116 January 18, 2008, article.................................... 120 Barnett, Helaine M., President, Legal Services Corporation, Washington, D.C.; accompanied by Jonann C. Chiles, Member, Board of Directors, Legal Services Corporation, Little Rock, Arkansas, statement............................................ 123 Boehm, Kenneth F., Chairman, National Legal and Policy Center, Falls Church, Virginia, statement.............................. 134 Boozer, F. Vernon, Chair, Maryland Legal Services Corporation, Baltimore, Maryland, statement................................. 139 Diller, Rebekah, Deputy Director, Justice Program, Brennan Center for Justice, New York University Law School, New York, New York, statement................................................ 146 Franzel, Jeanette M., Director, Financial Management and Assurance, U.S. Government Accountability Office, Washington, D.C., statement................................................ 156 Goldsmith, Sharon E., Esq., Executive Director, Pro Bono Resource Center of Maryland, Baltimore, Maryland, statement............. 169 Joseph, Wilhelm H., Jr., Executive Director, Maryland Legal Aid Bureau, Inc., Baltimore, Maryland, statement and attachments... 177 Kepplinger, Gary L., General Counsel, General Accountability Office, Washington, D.C., statement............................ 189 Livingston, Lora J., Judge, 261st District Court (Texas), Austin, Texas, and Member, Standing Committee on Legal Aid and Indigent Defendants, American Bar Association, Washington, D.C., statement...................................................... 199 National Conference of Bar Presidents, Chicago, Illinois, letter. 212 National Organization of Legal Services Workers, Local 2320, International Union, United Automobile, Aerospace & Agricultural Workers of America (UAW), Detroit, Michigan, statement...................................................... 215 U.S. Senators in support of an increase in Legal Services Corporation funding, Washington, D.C., joint letter............ 225 Wallace, Jo-Ann, President and Chief Executive Officer, National Legal Aid and Defender Association, Washington, D.C............ 230 West, Kirt, former Inspector General, Legal Services Corporation, Washington, D.C., statement.................................... 245 CLOSING THE JUSTICE GAP: PROVIDING CIVIL LEGAL ASSISTANCE TO LOW-INCOME AMERICANS ---------- THURSDAY, MAY 22, 2008 U.S. Senate, Committee on the Judiciary, Washington, D.C. The Committee met, Pursuant to notice, at 2:15 p.m., in room SD-226, Dirksen Senate Office Building, Hon. Ben Cardin, presiding. Present: Senator Cardin. OPENING STATEMENT OF HON. BEN CARDIN, A U.S. SENATOR FROM THE STATE OF MARYLAND Senator Cardin. The Committee will come to order. First, let me thank Senator Leahy for allowing me to chair today's hearing on ``Closing the Justice Gap: Providing Civil Legal Assistance to Low-Income Americans.'' Let me first apologize for being a few minutes late. The Senate is voting on the farm bill, the veto override, and that is going to be the last vote of the week. So I appreciate your patience in the starting of this hearing. I also from the beginning want to thank particularly Senator Kennedy. We all, of course, hold Senator Kennedy in our prayers. The discovery this week about his illness has been a blow to all of us here on both sides of the aisle, and there has been a tremendous outpouring of support. We know that he will continue to fight, but we miss him. In planning this hearing, I talked to Senator Kennedy, who gave me a lot of good advice as to what we should be doing. He is an ardent supporter of bridging the justice gap in America and wants to do everything he can to provide additional help to those today that do not have adequate access to our legal system, and I thank Senator Kennedy for that. He, of course, chairs the Committee that has primary jurisdiction over the Legal Services Corporation, and obviously his leadership in this area is indispensable. I also want to acknowledge the work that is being done on the Appropriations Committee that has been involved in many of these issues. As I pointed out, the purpose of today's hearing is to establish a record in the Judiciary Committee on a matter that is very important to the work of our Committee, and that is, how well are we meeting the needs of those people who are otherwise unable to get adequate legal representation in dealing with access to our justice system? And I would hope that today's hearing would focus on that so that we would have a good chance to make an assessment of where we are and where we need to go. The LSC Board completed a report that documented the justice gap in America. That report is titled, ``The Current Unmet Civil Legal Needs of Low-Income Americans.'' It was a reflection of what they discovered in 2005, and what that report pointed out--and I must tell you, I was a little bit surprised because I did not think the circumstances were as positive as that report pointed out, which was not very positive--is that one out of every two eligible individuals who seek legal assistance are denied services because of budgetary reasons. That means that we have a large gap in meeting our responsibilities. That report was done in 2005. It pointed out pretty clearly that that is those who seek help, and a large number of individuals do not even bother to try to get help to deal with their legal needs. So the gap is much larger than 50- percent failure in meeting needs. And then when one understands that the eligibility--the number of people who are eligible for legal services has increased since 2005, we have had major disasters since that time that add to the need for people having access to our legal system, including, of course, Katrina. We are suffering through a difficult economic time. The number of foreclosures are at an all-time high. That adds again to the circumstances of need, taking us well beyond where we were in 2005. And since 2005, the resources made available for civil legal needs have certainly not been keeping up with those additional challenges. As has been pointed out in the reports that have been made available to our Committee, there have been several States that have done an assessment as to where we are in meeting the needs of low-income families, and those reports show that the gap could be as high as 80 percent--in other words, one out of five people who need help who are eligible for services are getting those services. I think that is a shocking number, and we need to do something about it. We have a responsibility, and I must tell you, I have gone through this a great deal with the different interest groups, and it is clear to me that the legal profession has a responsibility. The legal profession is charged with the access to justice, and the legal community must do more. It is clear to me that State and local governments must do more. They have direct responsibility for the welfare of their citizens, have certain standards that must be met, and State and local governments must do more. But it is clear to me that the Federal Government must do a lot more in order to meet these needs. We have a responsibility, as the senior partner in administering the institutions of Government, to make sure that the legal system is available to all of our citizens. That responsibility, in my view, has not been met. In 1981, the Legal Services Corporation statute was passed, and that statute authorized $321 million of Federal funds to meet the needs of civil legal services for the poor. Presumptuously, that would be what we thought the needs were in 1981. The staff has prepared a chart that I will ask them just to show which will tell us where we have been since 1981. In fiscal year 2007, the amount went to $348 million. But as you can see the blue lines on that chart, the amount of funds that the Federal Government has provided has not kept up with the inflation, and the red line is the inflationary number. If we just adjusted the amount of moneys that were provided in 1981 to provide the same level of service adjusted for inflation using 1981 dollars, we should be at $678 million to the Legal Services Corporation. So we need to do much better at the national level than we are doing today. My own experiences on how we should deal with this are really learned from what happened in Maryland during the 1980s. During the 1980s, I was asked to chair a commission to study where we were in Maryland and what we could do to try to improve the situation. All the stakeholders sat on the commission, and we studied the circumstances in Maryland and found that there was a shocking gap between needs and services, where only one out of four were really being met with their needs. So we set out to do something about it, and we asked all of the players to do more. We had many recommendations which have been enacted into law. One of those was to have our two law schools that are located in Maryland start clinical programs and have experiences available for every law student to understand their responsibility for poverty law. I remember talking to Governor Schaefer at the time, and Governor Schaefer agreed to put a substantial amount of money in the State budget in order to implement that recommendation. He did that based upon the commitment that the bar would do more and lawyers would do more and the private sector would do more in order to close the gap. And today we have robust clinical programs in both of our law schools, which are providing direct services to the vulnerable population as well as training the lawyers of the future to be more sensitive to their responsibilities. We attempted to have lawyers do more, and we succeeded. The Maryland pro bono program is much more robust than it was in the 1980s. I see Herb Garten, who is in the audience, a member of the Board. It is a pleasure to have Herb here. He was instrumental at the Bar Association in Maryland in stepping up and carrying out their responsibilities. We asked the private sector to do more. We asked lawyers through their IOLTA program to do more. And we made a major difference. So I think we can do a much better job both through the direct services that are provided through the Federal Government through grants as well as by the major stakeholders assuming a greater responsibility, including the lawyers. So today's hearing, the purpose of which is to establish a record, a record for this Congress, I hope, to use to develop a game plan to address the gap that exists today, develop a strategy to close that gap so that our justice system that we showcase around the world is truly available to all of our citizens. [The prepared statement of Senator Cardin appears as a submission for the record.] With that, I will turn to our first panel of witnesses. As is the custom of the Judiciary Committee, I am going to ask the two panelists if they would stand in order to take the oath. Please raise your right hands. Do you affirm that the testimony you are about to give before the Committee will be the truth, the whole truth, and nothing but the truth, so help you God? Ms. Barnett. I do. Ms. Chiles. I do. Senator Cardin. Thank you, and let the record show affirmative response. Our first of two witnesses, is Helaine Barnett, who is the President of Legal Services Corporation, comes out of an experience in legal aid work which we are very proud of, and she is accompanied by Jonann Chiles, who is a member of the Board of Directors and recently appointed from Little Rock, Arkansas. We will start with President Barnett. STATEMENT OF HELAINE M. BARNETT, PRESIDENT, LEGAL SERVICES CORPORATION, WASHINGTON, D.C.; ACCOMPANIED BY JONANN C. CHILES, MEMBER, BOARD OF DIRECTORS, LEGAL SERVICES CORPORATION, LITTLE ROCK, ARKANSAS Ms. Barnett. Thank you and good afternoon, Senator Cardin. First of all, Senator Cardin, we want to thank you for holding this hearing today and for giving us an opportunity to talk about LSC's ground-breaking report on the justice gap in America and the work that LSC-funded programs are doing to serve the civil legal needs of the poor. Your long-standing public support and hard work for civil legal aid in Maryland, your chairmanship of the Maryland Legal Services Corporation, and your association and friendship with Herb Garten, whom you recognized today, are well known. Now we are able to thank you for your national leadership on this important issue. I am honored to be the first career legal aid attorney to hold the position of President of the corporation in its 34- year history. I know first-hand what our work means to the lives of our clients and have a deep personal commitment to providing high-quality civil legal services to eligible low- income Americans. Fifty million Americans are eligible to receive civil legal aid from LSC-funded programs, including more than 13 million children. The stark reality today is that the need for civil legal aid to protect basic human needs is much greater than the resources available. As you noted, in September of 2004, the Legal Services Corporation Board of Directors asked LSC staff to document the extent to which civil legal needs of low-income Americans were not being met. LSC conducted a year-long study culminating in the 2005 report ``Documenting the Justice Gap in America: The Current Unmet Civil Legal Needs of Low-Income Americans.'' The study established that for every client who received service, one eligible applicant was turned away for lack of adequate program resources. All those committed to a civil society know that turning away half of the people who seek legal assistance is not acceptable. Equal justice under law is a bedrock principle and these numbers do not reflect equal justice. LSC's ``unable to serve'' study documented only those who actually sought assistance from an LSC-funded program, but as you know, Chairman Cardin, the need is much greater. Many eligible people do not contact the program either because they are unaware they have a legal problem, they do not know that the program can help them, or they do not know that they are eligible for free civil legal assistance. And while our study is now more than 2-1/2 years old, there have been nine additional statewide legal needs studies and reports published since our study, and they have all confirmed that the justice gap findings are a reality and, if anything, are understated. Furthermore, the number of people sliding into poverty who need legal assistance is doubtlessly increasing as a result of the subprime mortgage foreclosure crisis, the recent rash of natural disasters across the country, and the general economic downturn and rising costs of such essentials as energy, gas, and food. Whether someone has lost their home to foreclosure or flooding, or whether their monthly income can no longer provide for life's necessities, more and more Americans will soon be turning to legal services programs for help in getting back on their feet. So what is the strategy to close the justice gap in America? The Corporation is developing long-term strategies involving strengthening local, State, and national partnerships. Our grantees work hard every day to ensure efficient use of the funding that is available, and they will continue to do so. Technology is a vitally important tool to help expand access to justice and provide self-help options for those that we are unable to directly serve. Technology improvements allow LSC grantees to deliver more assistance and is part of the strategy. Private attorney involvement is another important element of the strategy. The LSC Board has taken a leadership role and is using LSC's national voice to encourage a culture of expanded private attorney involvement as an effective tool for providing legal services to more persons in need. Last year, private attorneys handled more than 97,000 cases for LSC-funded programs, and we are working in partnership with the ABA on ways to expand private attorney involvement. While these are important elements of the strategy, technology and private attorneys alone cannot close the justice gap. Our Justice Gap Report concluded that just to serve those who actually sought help and were eligible to receive it, LSC's funding from the Federal Government would have to more than double, as would State, local, and private funding. Recognizing the political and fiscal realities at the time, the Board elected to request from Congress that the Federal increase be spread over 5 years. Nationwide, LSC encourages its grantees to leverage their Federal dollars, working with their partners in State equal justice communities, and this has resulted in significant increases of State, local, and private funds between 2005 and 2007. However, while State, local, and IOLTA funds have expanded, State budget deficits and the drop in interest rates are placing some of those increases at serious risk. Mr. Chairman, as we have discussed, LSC is improving both our governance and our oversight. As you know, the Government Accountability Office issued two reports, one in September 2007 on the Corporation's governance and accountability, and another in January 2008 on our grants management and oversight. We appreciated both of these reviews of our policies and practices and cooperated fully with GAO throughout the audits. Further, we accepted all of the recommendations and have made it a top priority to address the recommendations of both reports and have implemented or gone beyond nearly all the recommendations. We welcome the opportunity it has presented to help us do our job even better. In my written statement, I have provided a full accounting of our progress to date. In conclusion, the Justice Gap Report is as compelling today as it was when it was released in September of 2005. While the statistics are daunting, numbers alone do not tell the whole story of the impact that the lack of resources for providing high-quality legal assistance has on the lives of low-income individuals and families. For those millions of low-income Americans who are trying to keep a roof over their heads, who are trying to escape an abusive or life-threatening relationship, who are trying to keep their families together and safe, civil legal assistance is not just an abstract concept but a service that helps save lives and provides safety, security, and a path to self- sufficiency. It all flows from our founding principle of equal access to justice established in the Preamble to our Constitution and reiterated in our Pledge of Allegiance. As U.S. Supreme Court Justice Lewis Powell said, ```Equal Justice under Law' is not merely a caption on the facade of the Supreme Court building. It is perhaps the most inspiring ideal of our society...it is fundamental that justice should be the same, in substance and availability, without regard to economic status.'' That is the mission that LSC and our grantees across the country try every single day to fulfill. Thank you. [The prepared statement of Ms. Barnett appears as a submission for the record.] Senator Cardin. Thank you very much for your testimony. Ms. Chiles, do you want to make a statement or do you just want to respond to questions? Ms. Chiles. Senator, I will be happy to respond to questions. I do not have a prepared statement. However, I would like to echo Ms. Barnett's thanks to you for convening this hearing. Senator Cardin. Take as much time as you want on that. [Laughter.] Ms. Chiles. We appreciate your recognition of the justice gap and your dedication to working to closing the justice gap. I am here to assure you on behalf of the Board that we are dedicated to closing the gap through the efficient and effective use of the resources that are available to us. Senator Cardin. Thank you very much, and I am going to have a couple questions for you. Let me first start with the 2005 report. It indicated that one out of every two eligible individuals who seek services are unable to receive those services, and I want to put a face on it. Can you tell us what happens to those individuals? Do you have any idea where they go or what type of cases we are talking about, what type of people we are talking about that are turned down for services? Ms. Barnett. The individuals who sought assistance sought in the areas of our program's priorities. When our programs are unable to assist them, perhaps there can be a referral to a bar association or pro bono panel; perhaps they go pro se to the courts on their own. But in large measure, we all know that when we are not able to assist them, they have nowhere else to go. Senator Cardin. There is not a huge safety net out there beyond your grantees. What type of cases are we talking about? Ms. Barnett. We are talking about the core matters that our grantees represent nationwide, whether they are family law cases, keeping families intact; whether they are keeping safe and habitable housing; whether they are preventing foreclosure; whether they are assisting with needed medical care; whether they are providing benefits to disabled persons. Senator Cardin. Senator Kennedy, as I have indicated, is taking a lead effort on these issues, including trying to get the appropriations level at a higher amount, along with Senator Harkin. If you were to receive extra funding--and staff has made--I was asking for a copy of the letter. The letter was dated May 21st and actually is signed by a good number of members--by a majority of the Members of the Senate asking for additional funds. Where are your priorities? Where would these additional funds be used if you got additional funding beyond the current level? Ms. Barnett. Well, as you, I am sure, are aware, we have asked for $471 million for fiscal year 2009, and 95 percent of that would go to the local programs based on the statutory formula of the poor person population in their geographic area. The additional money would go for technology initiatives since we believe that is an important strategy with regard to help closing the justice gap. We also have asked for additional money to continue our loan repayment assistance program, which we think is critically important to attract young lawyers to legal aid programs and to retain high-quality staff. In addition, we have less than 4 percent going to grants management and administrative oversight. We feel we do need additional oversight staff, particularly to implement those changes and recommendations we have adopted from the GAO report. Senator Cardin. Could you just tell us how much of your budget goes for administrative purposes? Ms. Barnett. Less than 4 percent. Senator Cardin. But that also includes the oversight that you are required to do with the grantees? Ms. Barnett. It is. In fact, ``administration'' is a term that we hope we can change. It really has to do with grants oversight and management. And, yes, that goes--less than 4 percent, and that does cover the staff that we need to provide both the oversight for compliance and program quality to ensure it. Senator Cardin. Well, just to make an observation, that is certainly a relatively small percentage of the funds, and I applaud you on that. Clearly, as the GAO report pointed out, but as this Committee has said, we want to make sure that there is proper supervision to make sure the funds go for their intended purpose. So you need to have an adequate staff in order to do that, so it is difficult with the amount of funds that have been made available. Let me just read you one of the demographic information that has been made available to us, that for low-income persons there is one attorney for every 6,800 in civil legal needs. In the general population, it is one out of every 525. So just looking at the number of lawyers that are prepared to handle the civil legal needs of low-income families versus the number of lawyers available to the general public, there is a huge difference, 13 times more attorneys for the general public than for low-income families. Do we really have equal justice with that type of a disparity on those attorneys that are handling these matters? Ms. Barnett. Well, we don't believe we do have equal access to justice right now with the current level of funding. That is part of the reason we are asking for additional funding where the great bulk of it goes to the program, to hire staff, to deal with their salary needs, to get more staff. We do believe that private attorney involvement can be expanded and enhanced. We do believe that through technology we can make available more pro se initiatives. We do believe that we encourage our programs to leverage their Federal dollars and work in State access-to-justice communities to increase both the local, State, and private funding as well. So, without at least a doubling of the Federal commitment and a doubling of the local, State, and private sources, there will not be enough attorneys to represent those who desperately need it. Senator Cardin. So that brings me to your request. Your request you said was four hundred and? Ms. Barnett. Seventy-one. Senator Cardin. Four hundred and seventy-one million. Does that represent a minimum access dollar amount, or is that the pragmatic number that you would hope could be made available? Ms. Barnett. When we made our report to the board of directors, they said, recognizing political reality and fiscal constraints, that it would be prudent to ask for the doubling of the Federal commitment over 5 years. So the original idea was to ask for a 20- percent increase each year. Of course, we have not gotten 20 percent, and we recognize it is going to be a much longer process than 5 years. But the $471 million request is based on 20 percent of the Senate's allocation in their bill last year for basic field, so it has a rationale behind it. Senator Cardin. So to double the budget in 5 years was the-- Ms. Barnett. Was the original concept, and obviously we well recognize it is going to take quite a bit longer than that to accomplish. Senator Cardin. Ms. Chiles, let me, if I might, ask you to comment on the GAO report as to how well it was received by the board, what the board has done in response to it, whether you accept their recommendations that should be made, and whether you are taking steps to implement those changes. Ms. Chiles. Yes, the board has accepted the GAO report, embraced the GAO report, and worked diligently over the course of the past 6 or 7 months to address the concerns raised in the GAO report. I can, if you would like, go through briefly each of the recommendations that the GAO made to the board and to management, and I can tell you what has been done to date. Senator Cardin. If you could do that briefly, that would be helpful. Ms. Chiles. Feel free to interrupt me if I am not brief. In August of 2007, the GAO issued a report entitled ``LSC Governance and Accountability Practices Need to be Modernized and Strengthened.'' There were four recommendations made to management. There were eight recommendations made to the board. The first recommendation-- Senator Cardin. I think we have the recommendations in our file, so if you could just perhaps tell us how you have responded to it, it might be more helpful to us. Ms. Chiles. OK, very well. We have enacted a Code of Conduct, which applies to the board, officers and employees. We have instituted training on that Code of Conduct. LSC has instituted a Continuity of Operations Plan. That plan will be tested in July. The LSC examined whether the Government Accounting Standards Board should be adopted as a financial standard for LSC, determined that that was appropriate, and have continued to operate under those standards. Fourth, the GAO recommended that LSC management conduct and document a risk assessment program and implement--well, I should say conduct and document a risk assessment and thereafter implement an appropriate program to deal with risk assessment. And to date, management has researched risk management programs and best practices, identified the risk environment for the Corporation, and begun an office-by-office risk assessment. When this assessment is finished, an appropriate policy will be enacted and followed at the Corporation. The institution of a risk assessment and management program will do much to address the concerns that have been raised by the GAO in both the first report and the second report. The GAO made eight recommendations to the board in the first report. They recommended that we establish an Audit Committee or an Audit Committee function. That has been done, and I believe that that is going to be a very useful tool within the Legal Services Corporation for addressing, again, the risk issues identified by the GAO. I think it is also going to be a very helpful tool for communication between the Board, management, and the Inspector General's office. Also in response to the GAO report, the board has adopted charters for three of its subcommittees. The board is currently looking at creating a charter for its Operations and Regulations Committee and its Governance and Performance Review Committee. We are working to take--we are working to determine what the appropriate allocation of responsibilities is between those two committees, and that is why we don't have those two charters finished yet. We do expect to have those in place in August, our next meeting. The GAO recommended that the board develop and implement a procedure to evaluate key management processes, including processes for risk assessment, mitigation of risk, internal controls, and financial reporting. And this recommendation is going to be taken care of largely, I believe, by the creation and operation of the Audit Committee. We have established a shorter timeframe for issuing LSC- audited financial statements, and still pending is the establishment of an orientation program for new members, training for new members, the creation of a Compensation Committee function, and the evaluation of the performance of the board, each board committee, and each board member. And, again, the reason those last three to four recommendations have not been accomplished yet is because the board is still discussing the proper allocation of those responsibilities within the board, with Operations and Regulations or Performance Review. Senator Cardin. Can you give us just a timeline as to when--I take it you are going to act on those recommendations, you intend to do that? Ms. Chiles. Yes, sir. We intend to act as quickly as possible. In fact, we intended to act on those recommendations in our August meeting. Questions arose about the right way to go about dealing with these last recommendations; hence, the addition of these items to our next agenda, our next board meeting agenda. Senator Cardin. Do you anticipate at the next board you will be able to act on those issues? Ms. Chiles. Yes, sir. Yes, sir. Senator Cardin. Thank you. Ms. Chiles. And I would be happy to report back to you about what we do. Senator Cardin. If you would, we would appreciate that. Keep us informed on that. It would be helpful to us. Ms. Chiles. That covers the first GAO report. The second GAO report was issued in December 2007. It was entitled ``LSC Improved Internal Controls Are Needed in Grants Management and Oversight.'' Four recommendations were made to management, one recommendation was made to the board. The first recommendation to management is that it followup on each instance of improper use of Federal moneys. That has been done and is still being done by the office--well, by Legal Services management working together with the Inspector General's office. And when we receive--when the board receives a report on the examination of those grantees who are identified specifically in the GAO report, we plan to conduct a case study using those instances to determine how those situations could have been addressed and can be addressed in the future should they arise. The second request, the second full request from GAO to LSC is that the management develop and implement policies and procedures for information sharing amongst the Office of Inspector General, the Office of Program Performance, and the Office of Compliance and Enforcement, and that they coordinate their visits to grantees. That is being done. As we speak today, that is being done, and it will continue to be done. It is being done in practice, and it has been taken care of through the drafting of updated policies and procedures within the Corporation. The third of four recommendations to management was that LSC management develop and implement an approach for selecting grantees for internal controls and compliance reviews based on risk-based criteria; and also that that approach use information results from oversight and audit activities consistently. Again, this gets back to the issue of coordination and communication within LSC and with the Inspector General's office. And I can represent to you as a member of the ad hoc committee which was formed by the board to address some of these issues--well, to address in particular the issues of communication and coordination that we have made great strides in the past 6 to 7 months in the areas of communication and coordination. And the Legal Services Corporation is stronger because of it. The last recommendation to the Corporation from the GAO is that LSC develop and implement procedures to improve the effectiveness of the current LSC fiscal compliance reviews by revising its guidelines, and those guidelines have been updated. And if you have questions about specific changes to the guidelines, management would, I am sure, be more than happy to give you that information. The last recommendation, which was addressed to the board, was that the board develop and implement policies that delineate organizational roles and responsibilities for grantee oversight and monitoring, including grantee internal controls and compliance. And that has been done and is continuing to be done. That was accomplished primarily through the creation of an ad hoc committee on the board, a three-member committee made up of Mr. Garten, Sarah Singleton from New Mexico, and myself. Sarah was the designated liaison to management. The ad hoc committee had several briefings from the OIG and from OPP and OCE. We have had one public meeting. We gave a report to the entire board at our last board meeting in April. In response to that report, the board, the entire board of the Legal Services Corporation, adopted a very clear and detailed statement of the roles and responsibilities of each of the oversight entities at the Legal Services Corporation. And I am pleased to report that that document was the result of very hard work on the part of LSC management, the Office of--excuse me, OPP, OCE, and the Office of Inspector General. We have a new Inspector General, Jeffrey Schanz, who is a pleasure to work with. Senator Cardin. Well, thank you for that pretty thorough reply. Ms. Barnett. Mr. Chairman, would it be possible for me just to elaborate on one or two of the management recommendations and the action that was taken? Senator Cardin. Sure. Ms. Barnett. With regard to the followup of the nine instances that GAO identified during their program visits, I did refer eight of them to the Office of the Inspector General, and the Office of Inspector General has completed the field work at all eight of them and has reported to us that for the eight sites reviewed and based on the OIG's preliminary analysis, management of the grantees have adequately addressed the GAO recommendations and are implementing additional controls to prevent those issues from reoccurring. I also sent an advisory in March to all LSC-funded programs reminding them of the need for accurate documentation and the regulations regarding unallowable costs, specifically stressing the prohibition on the use of LSC funds for alcohol and lobbying, the need for written policies governing salary advances, and a reminder of the regulation governing derivative income. We kept one of the programs that was identified by GAO because we had already begun an Office of Compliance and Enforcement review. And I can report to you that LSC is taking action to terminate the current grant and replace it with month-to-month funding, with strict special conditions that require monthly action and reporting to LSC. And should the program not be able to meet those special conditions, LSC will terminate the month-to-month funding and seek a different provider through new competition. And, finally, I would just point out that with regard to our revised fiscal component, we now, as part of our expanded Office of Compliance and Enforcement onsite fiscal reviews, are specifically looking for specific documentation, contract service arrangements, employee interest-free loans or salary advances, lobbying fees, late fees or penalties due to lack of good financial management, derivative income, and alcohol purchases. So we have improved, based on the GAO recommendations and what they have reported to us, our fiscal review. And we have finally gone beyond the recommendations and addressed the timeliness of our reports. All reports for 2007 have been provided to all grantees in either draft or final form. We have set in our new manuals new timelines. Within 60 days after a program visit, they will get a draft report, for the most part, and 90 days thereafter. So we have even gone beyond, I believe, the recommendations to improve our oversight. Senator Cardin. Well, thank you. I appreciate that. And if you will keep us informed as to the further actions taken, we would appreciate it. I want to return to the capacity within the legal system. When I chaired the Maryland Legal Services Corporation, one of the most glaring problems we identified was the gap on salaries for those that are in Legal Services versus private practice and other fields of public interest law. And I really do admire those lawyers who go into public interest law at any level, whether it is in the criminal justice system or whether it is in the civil side. We had legislation before this Committee last year that dealt with loan forgiveness, and I know that we looked at the disparities within public interest then, and it was the legal aid lawyers who were at the bottom. Although the salary levels for public defenders and prosecutors should be higher, they were higher than those that are in the legal aid bureaus. When I was at the Maryland Legal Services Corporation, 1 year we made that our priority. We decided we were not going to expand any new opportunities until we could adjust the salary levels of those attorneys that were providing the services in order to try to keep experienced lawyers helping meet these needs. I am interested as to whether you have looked at that issue with the different grantees as to whether there is a commitment to try to deal with the salary disparity for those that are in the civil legal field in public interest law. Ms. Barnett. The Legal Services Corporation, Mr. Chairman, has a 3-year pilot program for a loan repayment assistance program, and we have a total of 82 participants in 24 programs initially getting $5,000 a year for 3 years, and this past year we got a $500,000 appropriation, and we are raising it to $5,600 for 3 years. Our evaluation of the first year of the program definitely demonstrated what I think is no surprise to anyone in this room, that loan repayment assistance programs definitely helped young people go to legal service programs and remain there, as well as permitting the programs to help recruit and retain high-quality staff. You have so rightly pointed out that legal aid attorneys are the lowest paid of any public sector attorneys, with an average starting salary of $37,000, graduating with an average debt load of more than $80,000. When I mentioned that 95 percent of the increased appropriation would go to the LSC programs, it is our assumption that some programs would use some of that money for salary adjustments as well as other infrastructure needs. Senator Cardin. I am certain that happens. One of my suggestions might be that there actually be a strategy, if there is again a commitment--if Congress were to make a commitment to double the funds going to LSC, it seems to me that one of the priorities should also be certain understandings as to how that money is going to get to improve the career opportunities for legal aid attorneys. I think that would be a beneficial part of a tangible accomplishment. It is not just providing a wider variety of services, which we need to do, or taking in more numbers. It is also retaining quality attorneys to meet these needs. Ms. Barnett. We are having in June a conference of all our executive directors, and salary is one of the workshop issues in our recruitment and retention session that we will be focusing on. We will have all 137 LSC-funded programs represented, and this will be a good forum to have that discussion. Senator Cardin. I have one last question, which is--the critics of LSC often point out that you have a model that in litigation both sides should have attorneys. Now, I happen to think that makes common sense to have lawyers on both sides of an issue. But my question is: Have you been able to demonstrate that when you have proper legal representation in matters that could be in litigation, there is a stronger possibility that these cases or probability that these cases can be resolved absent a lengthy trial; whereas, when you don't have adequate representation, sometimes you have unnecessary litigation? Ms. Barnett. Our statistics nationwide show that only about 10 percent of the cases handled by all LSC-funded programs actually go to trial; that, in fact, a lot of what we do is preventative, a lot of what we do is being able to settle and negotiate a correct resolution for our clients without the necessity of a lengthy trial. And Jonann Chiles and I were discussing this in the taxi coming over here. Perhaps you will share the story of the Tennessee client. Ms. Chiles. I thought this was a good example of how our grantees educate their clients to become effective advocates for themselves. We were told about an incident from Tennessee where a client went into a grantee's office to set up a meeting with a lawyer for the purpose of talking about how to deal with an eviction notice from her landlord. The women went home--she made her appointment. She went home carrying a flyer in her hand from the grantee, and in that flyer was a list of her rights and duties as a tenant and the obligations of a landlord under Tennessee law. When the woman got home, her landlord was there with the police waiting to evict her. She held up her pamphlet and told the landlord, ``Well, you haven't met A, B, C, and D, and until you do those things, my lawyer says that you can't evict me.'' Well, the landlord looked at the pamphlet, and the police officer looked at the pamphlet, and everyone agreed that she had not had her due process and she could not be evicted yet. I thought that was a good example of a client being educated and empowered to represent themselves effectively. Senator Cardin. Well, thank you for sharing that with us. Again, I thank both of you for being here, and I thank you for your testimony. Ms. Barnett. Thank you so much. Ms. Chiles. Thank you. Senator Cardin. The second panel, let me introduce the second panel. Then I will ask you all to remain standing to take the oath. The second panel will consist of the Honorable Lora Livingston, a judge from the 261st District Court in Texas, and a member of the Standing Committee on Legal Aid and Indigent Defendants, American Bar Association; Jo-Ann Wallace, the President and CEO of the National Legal Aid and Defender Association, from Washington, D.C.; Wilhelm Joseph, the Executive Director of the Maryland's Legal Aid Bureau, Baltimore, Maryland, the person who we are very proud to have here, who I have had the honor to work with on legal service issues over the years and who does an outstanding job for the people of our State; Kenneth Boehm, Chairman of National Legal and Policy Center from Falls Church, Virginia; Jeanette Franzel, the Director of the Financial Management and Assurance Team, U.S. Government Accountability Office--that is GAO-- Washington, D.C.; and Rebekah Diller, Deputy Director of Justice Program, Brennan Center for Justice, New York University Law School in New York. Would you all please raise your hands? Do you affirm that the testimony you are about to give before the Committee will be the truth, the whole truth, and nothing but the truth, so help you God? Judge Livingston. I do. Ms. Wallace. I do. Mr. Joseph. I do. Mr. Boehm. I do. Ms. Franzel. I do. Ms. Diller. I do. Senator Cardin. Thank you. The record will reflect that there was an affirmative reply to the oath, and we will start with the Honorable Lora Livingston. STATEMENT OF LORA J. LIVINGSTON, JUDGE, 261ST DISTRICT COURT (TEXAS), AUSTIN, TEXAS, AND MEMBER, STANDING COMMITTEE ON LEGAL AID AND INDIGENT DEFENDANTS, AMERICAN BAR ASSOCIATION Judge Livingston. Thank you very much, Senator Cardin, for letting me visit with you this afternoon about this very important issue. I will just briefly for the record continue with my introduction. My name is Lora Livingston. I am a State court judge. I live in Austin, Texas. I am a general jurisdiction trial court judge there, but I am submitting this testimony at the request of the President of the American Bar Association, William Neukom of Seattle, Washington--he could not be here today--to voice the association's views with respect to closing the justice gap that you so eloquently talked about earlier at the beginning of this hearing. It is the association's goal to ensure justice for all and to ensure, most importantly, access to justice for all Americans, not just those who can afford a lawyer. The ABA strongly believes that this objective can be and must be largely achieved by strengthening the Legal Services Corporation because it is the entity in our system of justice that really is the linchpin to ensuring access to the legal system for all Americans. The ABA is the world's largest voluntary professional organization with more than 413,000 members. It is the national representative of the legal profession, and it serves the public and the profession by promoting justice, professional excellence, and respect for the law. We are an association that is firmly rooted in the rule of law and believe in its precepts. I started my career as a legal aid lawyer. I was what we call a ``Reggie.'' I was part of the Reginald Heber Smith Community Lawyer Fellowship program, and my assignment was in Austin, Texas. That is how I got to Texas from California, where I am from. I spent about 6 years in the legal aid office in Austin, Texas, doing basic poverty law work, and I then went into private practice and then later became a judge. I am here on behalf of President Neukom and the ABA and also on behalf of the Standing Committee on Legal Aid and Indigent Defendants. We call that committee within the ABA ``SCLAID'' for short. SCLAID is chaired by former Texas Supreme Court Justice Deborah Hankinson. She could not be here today and so asked me to provide this testimony on her behalf. We have five judges on SCLAID, and I think that that should demonstrate to you and signal just how important SCLAID is within the ABA and the importance of this work, ensuring access to justice for all, because it includes so many members of the judiciary on the committee. The ABA has a long history of involvement in access-to- justice initiatives. Ms. Barnett talked about Supreme Court Justice Lewis Powell and his work serving the ABA when he was President and calling back in 1964 for a major expansion of the Nation's legal services work for the poor, and that ultimately led to the creation of the LSC program. The ABA strongly opposed past efforts to eliminate the efforts to reduce access to legal services for the poor and since then has been very involved in securing bipartisan support for not only LSC but for access-to-justice initiatives in general. You referred earlier to the Senate letter, dated yesterday, that is signed by, I believe, 55 Senators, and we are still working on getting more signatures on that letter. But in addition to that letter, you should also-- Senator Cardin. Let us know when you have 60, please. Judge Livingston. Great. Even better. See, your information is more up-to-date than-- Senator Cardin. No, no. I said let us know when you get to 60. Judge Livingston. Oh, let you know. OK. All right. Senator Cardin. That is a key number around here. [Laughter.] Judge Livingston. That is the number we are shooting for. That is our goal, and we will definitely let you know when we achieve that milestone. In addition to that important letter, though, I should also tell you that there is a letter signed by all 50 State bar presidents, the State bar presidents of the District of Columbia Bar, as well as the bars in the Virgin Islands and Puerto Rico. This is an important issue to every State bar association in this country and some of its territories. I cannot underscore more significantly than that the widespread both partisan, bipartisan, and nonpartisan support for legal services to the poor in America. LSC, I want to tell you, is the essential linchpin in our comprehensive system of delivery of legal services to the poor in this country. It is the most significant entity that we have in the administration of justice in this country, and it is the one, probably perhaps most important part of the overall system of justice. It is the one that funds most of the work that is done out in the field, and certainly there are partners--you have talked about IOLTA programs. There are certainly partnerships on the State and local level. There are grant funds that are nongovernmental funds that support legal services throughout the country, but LSC funds really are the linchpin to this comprehensive system of justice in our country, and that is why strengthening its work and providing additional funding for the work that it does is so important. The Preamble to the U.S. Constitution states among the first enumerated functions of government that we are to establish justice. It is first. It is part of our fabric in this country, and we have to, it seems to me, at all levels of Government, certainly within the judiciary, certainly as the Senate, support it as best we can. You have heard some stories, and you talked earlier about putting a face on legal services. I have got lots of stories, but I know that we are short on time, and I will not tell you all of them. But I want to tell you about one from Texas just briefly, if I might, and that involves--you know about the Katrina disaster and so forth, but since 2005, LSC programs have closed more than 10,000 hurricane- related cases through the end of 2007. That is phenomenal work in light of a major disaster, and it just begins to tip the iceberg of the very hard work that field programs have been conducting not just in response to a disaster, but that is the kind of hard work you get from every field program in this country. Without that work, people will go hungry, people will be evicted, people will not get the benefits that they need that they are entitled to, that the Government provides for them and guarantees to each one of them. And that is why LSC needs the support, as much of it as you can give them, as much of it as we can give them on the State level, as much as we can do locally, as much as we can do in each individual community where poor people reside. And it is our responsibility as a government to do so. It is our responsibility as a legal profession to do. And we look forward to the partnership with the Senate in making that a reality. Thank you very much for your time this afternoon. [The prepared statement of Judge Livingston appears as a submission for the record.] Senator Cardin. Thank you for your testimony. Jo-Ann Wallace? STATEMENT OF JO-ANN WALLACE, PRESIDENT AND CHIEF EXECUTIVE OFFICER, NATIONAL LEGAL AID AND DEFENDER ASSOCIATION, WASHINGTON, D.C. Ms. Wallace. Good afternoon, Senator, members of the staff. Good afternoon and thank you for the opportunity to speak to you today about the justice gap in America. NLADA, the National Legal Aid and Defender Association, is a national organization committed to equal access through the delivery of excellence and civil and defender legal services. Our members are civil and defender advocates who provide legal assistance to people who otherwise could not cannot afford attorneys, corporations, and others who care about equal justice. As has been stated, the Constitution recognizes that the establishment of justice is essential to the very creation of our Government. In passing the Legal Services Corporation Act, Congress recognized that there cannot be justice in America if a person's ability to access it depends on how much he can afford. The delivery system that was instituted more than three decades ago established the Legal Services Corporation as the linchpin of a national system. That model, which remains true today, is fundamentally sound. But as you have now heard repeatedly, by any measure it is woefully underfunded. Federal funding for LSC in effect has been reduced by over 53 percent from its 1980 level. State-based studies put the unmet need anywhere, as you noted, from 70 to 90 percent. At a minimum, one out of two people who need legal assistance must be turned away by LSC providers. While the dollars to support legal services have steadily decreased, the legal need, as you have heard, is increasing. Veterans returning, the mortgage lending crisis, the storms, the skyrocketing cost of life essentials are but some of the factors that are driving the need for services upward. In short, we are in a growth industry when it comes to demand and a recession when it comes to resources. But while running the numbers is alarming, the picture is even more sobering when we remember that every one of the two that gets turned away represents a person with a face and a name and a right to expect justice in our democracy. ``Collette'' was one of the lucky ones. When Hurricane Katrina struck New Orleans in August 2005, Collette lost her house and moved with her son, ``James,'' to stay with friends in Missouri. When that arrangement fell apart and Collette became homeless, the State took James and placed him in Missouri's foster care program. Determined to regain custody of her son, Collette moved to New Orleans, the only place she could call home. She successfully applied for a HUD grant, but the money, the grant money, was delayed for months. All the while Collette was traveling back and forth to St. Louis to attend custody hearings and to spend a few hours with her son, James. At each hearing Collette was asked, ``What progress have you made to rebuild your home?'' So Collette began rebuilding her home herself, paying for materials gradually with wages that she earned from part-time jobs. When staff from Legal Services of Eastern Missouri learned of Collette's plight, they put her in contact with a State-based organization whose volunteers helped Collette to renovate and refurnish her home. They connected her with mental health services for trauma survivors. And, finally, they convinced the court that James belonged with his mother. Elsie Williams is another one of the lucky ones. Ms. Williams is a 70-year-old retired factor worker who lived on the $530 a month that she got from Social Security. So when the sofa bed that she had could not support her anymore, she did not have the money to replace it, and she could not afford the prosthetics that she needed as a cancer survivor. So for the first time in her life, Ms. Williams took out a loan. Ms. Williams could not read the fine print of the contract that she signed. She did not know that she had agreed to sign over her monthly checks to the loan company or to let them charge her a 95-percent interest rate on that loan and to tack on numerous other legal and illegal charges. And so she did not understand why, when she went to the bank in the next few months, her Social Security money was not there. But Ms. Williams found a young woman who had been willing to give up a job making more than $100,000 a year as a real estate attorney. She wanted to follow her dream to help people as an attorney with an Atlanta legal aid program. With the attorney's assistance, Ms. Williams got her Social Security checks back. As these stories illustrate, the efforts of legal aid lawyers support better life outcomes for millions of people, and as the last example also illustrates, those efforts often come with significant personal sacrifice. I cannot tell you the exact starting salary of that young attorney in Atlanta. What I can tell you is that she took a substantial pay cut to go work for legal aid. As a means of stretching scarce dollars to meet the ever growing demand for assistance, LSC programs have historically paid salaries that are the lowest of any sector of attorneys. Legal aid programs across the board this is true of. According to a 2006 report, the median salary for entry-level civil legal aid attorneys is a little more than $36,000. The lawyers making that entry-level salary usually face law school debt of between $80,000 and $120,000. The convergence of these factors has extracted a significant price over time due to costs of turnover and difficulty filling vacant position. NLADA is most appreciative of recent Federal legislation that attempts to address this problem, but that additional investment in the attorney work force must also be supported with increased Federal support for LSC if you want to ensure the availability of the next generation of lawyers dedicated to serving the public interest and also if you want to maximize the availability of funding for direct services. The final point I would like to make also goes to the issue of cost-effectiveness. Equal access to justice cannot be administered efficiently when Legal Services are not able to use the same tools and strategies that other lawyers use to serve their clients. Congress should remove those restrictions on legal aid attorneys that are inconsistent with the purposes of the LSC Act, starting with the restrictions upon the LSC programs, what they can do with State, local, and private funds available to them. In closing, I would like to thank the Committee again for shedding light on this important issue. We would urge Congress to recommit to equal access for justice by embarking on a course to expand funding and eliminate the restrictions that hamper the effectiveness of the public- private partnerships that are necessary to eliminate the justice gap. Thank you. [The prepared statement of Ms. Wallace appears as a submission for the record.] Senator Cardin. Thank you for your testimony. Mr. Wilhelm Joseph? STATEMENT OF WILHELM H. JOSEPH, JR., EXECUTIVE DIRECTOR, MARYLAND LEGAL AID BUREAU, INC., BALTIMORE, MARYLAND Mr. Joseph. Good afternoon, Senator Cardin and staff gathered here, and thank you, Senator, for hosting the hearing, and thank you for your outstanding record of leadership on this issue in Maryland and now on the national level. And please allow me to convey, through you, my best wishes for the recovery and good will of Senator Kennedy. It is a particular honor for me to have been given this opportunity to appear before you. I am humbled to be presenting before this august body, to address you on a subject that is very personal for me. In 1965, I was a young man with a solid high school education and a burning desire to pursue a higher education. At that time I was living in Port of Spain, Trinidad, the place of my birth. I was a member of a very poor but proud family with a strong work ethic and without the funds to support furthering my education. Today I am here as a testament to the generosity and support of many individuals and institutions in this great country who extended a helping hand to me. For this I am deeply grateful. Starting with a track scholarship and other assistance later, I have earned an undergraduate degree from a historically black university, a law degree from a reputable university law school, and a graduate degree from one of this country's leading institutions. For this and many other blessings I am very grateful. Currently, I am most fortunate to be a member of a partnership in Maryland, the Legal Aid Bureau, whose mission is to provide the best civil legal assistance possible to low- income persons. That partnership comprises the judiciary at all levels--the private bar, individuals and firms; the Maryland State Bar Association; governing bodies at the State, county, and city level; various funding sources including our IOLTA program, represented here today by Herb Garten and Susan Erlichman; the Maryland Legal Services Corporation; foundations; and, of course, the federally funded Legal Services Corporation. In Maryland, this partnership approach to addressing the civil needs of the State's low-income is encompassed in three letters of the alphabet: S for sensible, E for enlightened, and C for compassionate. Our work is motivated by a shared intolerance for injustice and a willingness to help others pick themselves up by their own bootstraps. In Maryland, we face the same challenges that have been already outlined here today and that have been clearly set forth in my written submission. That is the challenge of addressing overwhelming needs with too few resources. This is a national crisis. In my opinion, it requires a national response. In Maryland, we do leverage our LSC resources. We receive about $3.9 million from LSC. When I arrived in Maryland in 1996, our total funding was $9 million, and the funding then from LSC was around the same three-point-something million. Today, in Maryland, our budget will be $22 million, a testament to that partnership I referred to earlier. Maryland Legal Aid Bureau represents the helping hand that catches thousands of vulnerable, unfortunate people before they fall off the precipice and through the trapdoors of circumstances that otherwise would cause them to fall into the quicksand of poverty and crisis, and go deeper and deeper. Our clients are people who have recently suffered setbacks, such as loss of a job, unexpected illness, disability. They are vulnerable children, victims of abuse and neglect, elderly citizens, victims of domestic and family fractures, and low- wage workers. Allow me to offer one illustration. Let's take a look at a fairly common legal aid family, and I ask the staff, get a pen and a piece of paper. I want to take you through a very short exercise. Consider a family of three--two young children with one parent with a job that pays just above minimum wage, say $7 per hour. At that rate of pay, gross wages on 40 hours a week, 32 weeks a year, would bring them $14,560--way below the LSC eligibility guideline for a family of three, which is at $22,000. After the compulsory deductions for Social Security, et cetera, that wage earner's take-home pay is closer to $13,000. Now, here is where the rubber hits the road. A quick look at a sample budget for that family will reveal the following: Rent, approximately $800 a month; food, $400 a month; child care, $400 a month; transportation, maybe $400, maybe a whole lot more with the gas prices; utilities, $150 per month; clothing, household repairs, et cetera, $150 per month. A very modest budget. Without health care being mentioned, those total expenses come to $2,300 per month, annually $27,600. Even with available subsidies for housing, food stamps, and utilities, this family will be in a crisis. Meeting $27,000 in expenses on a $13,000 budget is impossible. These people will try to survive by periodically failing to pay this particular bill or another--rent, utilities, et cetera. These choices have consequences that bring them to the door of legal services for help. These circumstances also create an environment that is more conducive to domestic violence, abuse, and even criminal behavior, in order to make ends meet. In Maryland alone, there are over 500,000 such persons trying to subsist below this level of poverty. In 2007, with the coalition and partnerships, the Legal Aid Bureau helped some 53,000 of them. Combined with the efforts of other providers including over million pro bono hours rendered by private attorneys, we helped only a total of 101,000 persons with their civil legal needs statewide. Senator Cardin, we need a fundamental change at the national level with regard to this question, this crisis of justice in America. This crisis on a daily basis contributes to suffering, despair, hopelessness, and robs our community of the full potential of all the members who now subsist at intolerable and embarrassing levels. We need a substantial increase in financial resources to meet new regularly, steadily increasing costs of doing business, recruiting, training, retaining qualified staff, paying for rents, utilities, supplies, communication, equipment, furniture, et cetera. Help us to help others pick themselves up by the bootstraps. Help us to help those without boots. Thank you. [The prepared statement of Mr. Joseph appears as a submission for the record.] Senator Cardin. Thank you very much for your testimony and for your service. Mr. Kenneth Boehm? STATEMENT OF KENNETH F. BOEHM, CHAIRMAN, NATIONAL LEGAL AND POLICY CENTER, FALLS CHURCH, VIRGINIA Mr. Boehm. Thank you. Good afternoon, Senator Cardin. My name is Ken Boehm, and I serve am the Chairman of the National Legal and Policy Center. From 1991 to 1994 I was Assistant to the President and Counsel to the Board of the Legal Services and prior to that headed the Department of Policy Development at Legal Services Corporation. It is an honor to appear before you today to share some of my views, which will be distinctly different than many of the other views you are hearing, but for that reason I especially want to present them. For today's topic, I would like to focus on two observations. First, we really are interested in closing the justice gap, and that is what we have to focus on, and closing that gap should involve a much broader approach than simply increasing the appropriation to a troubled Federal program by five-fold. As has been pointed out, page 19 of ``Documenting the Justice Gap in America,'' the 2005 legal needs study done by LSC, they recommended an increase to $1.6 billion, which is a fivefold increase. My second observation, which I will also get into a little bit, is that the Legal Services Corporation model has been plagued with many problems from the beginning, and if we are truly interested in solving this problem and not doing these incremental Band-aid approaches, we should think far beyond just giving extra money to the Legal Services Corporation. As I am sure you know, the Legal Services Corporation has not been authorized since 1980. That is when its first reauthorization expired. That is 28 years through Republican and Democrat Congresses, Republicans and Democrats in the White house, without reauthorization. That is almost unique for Federal programs to go that long without any kind of consensus for reauthorization, and there is a reason for that. Turning to ``Documenting the Justice Gap in America,'' the study, there are some limitations to it. It was done by LSC and the programs, and the conclusion was give us five times our budget and that will be a good start toward solving the problems. That is not unusual in Washington for programs that want more money to simply ask for more money and give a study that is tailor-made to show that would solve the problem. But I think we have to think far beyond that. We have to look at alternatives that, in fact, may be more cost-effective, alternatives that are already being done by market and other forces, alternatives to deliver justice not just to poor people but middle-class people who can't afford the growing costs of being involved in a civil lawsuit. It has been said here numerous times that LSC is the linchpin of providing legal assistance to the poor. It shouldn't be overlooked, the fact that for every 1 hour of service by a Legal Services Corporation-funded lawyer, there are 5 hours of pro bono, five private attorneys in private practice doing their responsibility, as they are supposed to be if they are in private practice. And so there are many other ways, of course, that legal services are given to the poor. Outside of contingency fee funds in cases of personal injury, we have a growing trend--that has actually happened over the last 20 years--for an increase in the jurisdictional dollar amount of cases in small claims court. As I said, it has already been happening, these cases. I am sure as anyone here who has spent any time in small claims court can say, they are fact-based. There is no lawyer generally needed. We also have seen a vastly greater increase in mediation, including mediation without lawyers, even though the American Bar Association feels that you should have lawyers in these mediation types of cases. And this is very, very helpful. People who study mediation say you get a faster result, it is more cost-effective. And sometimes the parties actually have a meeting of the minds--that is what mediation is all about--and you actually have a much better result on all fronts than if costly litigation is needed. Another area that needs to be looked at is increased use of ombudsmen. As somebody who has followed Legal Services' policies for the last 15 years, this is happening at the State level, at the local level, through the Older Americans Act. There is Federal funding for volunteer ombudsmen for long-term care. Many, many different examples. In European countries, developing countries, Japan, Australia, Canada, ombudsmen are widely used to develop justice. We should ask ourselves--we know we are the most over-lawyered country in the world with something approaching a million lawyers out there. How does the rest of developing world solve their legal problems if they do not have as many lawyers per capita as we do? Well, the way they solve them is they make many of these less serious legal problems, problems that can be solved in some way other than litigation and expensive lawyers, and we should look at those models. The key question is: Is our goal increased access to justice? Or is it just increased federally funded lawyers and lawsuits? The alternatives generally are faster. They are more cost-effective. And all too often the burden really falls--the burden of some of this litigation falls on other people who cannot afford it. I will give you a very brief example. A 70-year-old Ohio vegetable farmer named Russell Garber was sued by LSC-funded lawyers under a Federal law did not apply to small family farmers. As a matter of principle, he hired a lawyer to defend him. He couldn't afford a lawyer. He had to borrow and go into hock at age 70 to do it. The case was dismissed by a Federal judge in a strongly worded decision very critical of the Legal Services lawyers for bringing a case that did not apply in his instance. Instead of accepting their defeat, the lawyers from the Texas Rural Legal Assistance instead appealed to a three-judge panel. The three-judge panel affirmed the dismissal, and Mr. Garber won. His legal bill: $107,000. Now, I talked to Mr. Garber this morning just to see how he was doing 4 years after that. He was up at 5. He was doing his chores. He is not retiring. He has a $107,000 legal debt. My question is: Is that justice? We are supposed to be promoting justice, not just funding for a Federal program. There are better approaches. They are outside what was in this study. They are outside generally what the bar looks like, because a lot of them don't involve funding with lawyers. They involve other ways of justice, as I listed. The LSC model is deeply flawed. Not just have we had two fairly critical GAO reports just in the last year, there were two other back-to-back critical GAO reports in 1999 when GAO said they had widespread and significant problems with their case reporting. They were reporting to Congress. LSC disputed that and said, Oh, we have solved it, we have taken care of it--much as you have heard they have solved these GAO problems. GAO then did a second study in 1999 and found that they had not solved the problem, and their case numbers finally went way down because they were counting in one case, one program, 10,000 phone calls by non-lawyers as ``legal cases.'' Well, that is not fair to the taxpayer. It is not fair to poor people. And it is just not the way our Government should run. If you look at just the last 2 years--and we have documented hundreds of abuses over the years. But if you look at just the last 2 years, you have the back-to-back GAO investigations; you have a strained relationship with the LSC IG, and Congress. There have been three full-time LSC IGs prior to the current one. All three left after severe feuds with the LSC Board. The last one, Kirt West, was about to be fired before three Members of Congress--two Senators and a Congressman--wrote a letter to the LSC Board saying, ``Don't fire the IG while he is investigating you.'' That is a very, very--I do not know of any other Federal program that has had three consecutive IGs go out of business. They have had negative publicity based on use of limos, overpriced hotels. This was the Associated Press and CBS Evening News. These were not conservative critics. And, in fact, program lawyers, the ones that we have heard who operate on very, very low salaries and are really giving their all to the program, were appalled to see that Legal Services had limos for their board members and were paying for first-class air travel and all sorts of other thrills that really do not belong in a Federal anti- poverty program. My only thought is as you look at ways to meet the legal needs of the poor, think beyond just let's pour more money on this program. Think to are there some structural changes that could be done that help all people, not just the poor--the middle class who can't afford lawyers, the Russell Garbers of the world who can't afford lawyers--help all people get access to justice. When the Framers said access to justice, they were not referring to Legal Services Corporation. That did not come until the 1970s. They wanted access to justice. I think what the Framers had in mind and what the saying on the Supreme Court facade means is we need to have a society with laws and institutions that allow people access to justice. And if that does not necessarily suit the needs of the American Bar or the Legal Services Corporation, well, I think we really should be after justice and not that. And as I say, if I could make one recommendation, it would be this: that there be a real study, perhaps an independent study, by leading thinkers, and there are some good books that have been published. Just recently, there is one out by a Stanford law professor that looks to these alternatives out there, and let's see if that isn't a more cost-effective way to deliver access to justice. Thank you very much. [The prepared statement of Mr. Boehm appears as a submission for the record.] Senator Cardin. Thank you very much for your testimony. Ms. Jeanette Franzel? STATEMENT OF JEANETTE FRANZEL, DIRECTOR, FINANCIAL MANAGEMENT AND ASSURANCE, GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, D.C. Ms. Franzel. Good afternoon, Senator Cardin. I would like to ask that my written statement be submitted for the record. Senator Cardin. Without objection, all the written statements will be included in the record. Ms. Franzel. Thank you. I am very pleased to be here to discuss our recent GAO reviews that have been mentioned throughout this hearing on Legal Services Corporation's governance, accountability, and grants management practices. The Legal Services Corporation, or LSC, has the important mission of making Federal funding available to provide legal assistance in civil matters to low-income people throughout the United States. Today I will discuss LSC's organizational framework and funding and highlight the key findings from our August 2007 report on LSC's governance and accountability and our December 2007 report on LSC's grants management and oversight. The sum of these two reports represent a comprehensive, top-to-bottom review of the LSC structures and processes that are needed to increase assurance that LSC programs are carried out effectively and that funds are used in accordance with intended purposes. First, regarding LSC's framework and funding, LSC is a very unique organization. It was established by a Federal charter in 1974 as a federally funded, private, nonprofit corporation. Despite its status as a private corporation, the vast majority of LSC's funding is from Federal appropriations. LSC uses its funding to provide grants to legal service providers, or grantees, who serve the low- income members of the community who need services. LSC received about $350 million in appropriations for fiscal year 2008 and has 137 different grantees. LSC distributes its funding to grantees based on the number of low-income persons living within a service area, so grantees are the entities actually spending the funds and providing legal services to clients. LSC management is responsible for ensuring that these grant funds are used for their intended purposes. Thus, LSC is responsible for its own activities and internal controls and for providing oversight and monitoring of grantees and their internal controls, their use of grant funds, and compliance with laws and regulations throughout their operations. LSC's Board of Directors plays a significant role in LSC's governance and is responsible for providing leadership and direction to LSC's management and overseeing LSC's operations. Since 1988, LSC has been under the oversight of an Office of Inspector General which has statutory authority to carry out audits and investigations of LSC programs, and LSC now has a new IG, as we have heard. In the areas of governance and accountability, we found that LSC's practices had not kept up with evolving reforms that have impacted other types of organizations. I do want to emphasize that LSC's board members did show active involvement in LSC oversight through their regular board meeting attendance and participation. Also, in our discussions with individual board members, we found them to be highly committed to their responsibilities and very receptive to the suggestions that we were making and the improvements that need to be made in governance. We made recommendations in the following areas to help strengthen LSC governance: establishing basic charters and responsibilities for the board and its key committees and putting those in writing; employing orientation, training, and performance assessment processes for the board and for its members; adding functions normally handled by boards of directors, such as audit committees, ethics committees, and compensation committees, to help oversee those areas impacting LSC's accountability and codes of ethics; and finally, very importantly, periodically evaluating key LSC management processes, such as risk assessment and mitigation, internal control, grantee oversight, and financial reporting. We also found that LSC management practices had not kept up with recent developments for other types of organizations. LSC management itself had not implemented a systematic or formal risk assessment process and had not established comprehensive policies or procedures regarding conflicts of interest and ethics. In addition, LSC had not established a continuity of operations program. In the area of grants management and oversight, which is really the heart of where LSC funding is applied in LSC operations, we found weaknesses that left grant funds vulnerable to misuse. Specifically, we found that the scope of LSC's monitoring of grantees' fiscal compliance was limited. In addition, LSC did not use a structured or systematic approach for assessing risk across its 137 different grantees in order to guide the timing and scope of grantee visits and oversight activities. We also found that oversight feedback to grantees was often slow. As of September 2007, LSC had not yet issued reports to 10 of the 53 grantees that it had visited during 2006. Without such communication, grantee managers do not have information that they need about deficiencies and corrective actions that are needed to help protect their activities in their own program. We also found poor fiscal practices and improper expenditures at 9 out of the 14 grantees that we visited, and I would like to stress that these were very limited reviews that we did. During our limited reviews, we identified issues that LSC could have identified with more effective oversight. We found systemic issues involving payments that were made without sufficient supporting documentation, and in those cases, it was impossible for us to determine whether the expenditures were accurate, allowable, or appropriate. We also found improper expenditures and potentially improper expenditures at grantees using grant funds, including travel expenses, loans to employees, alcohol purchases, lobbying fees, questionable contractor payments, and improper use of LSC funds resulting from a real estate transaction. As a result of our review, we made a total of nine recommendations to LSC's board and eight recommendations to LSC management. Both LSC's board and management expressed a commitment to taking corrective action to implement our recommendations. LSC's most recent progress report indicates that it is starting to take action on many of our recommendations and is planning action on the rest. LSC plans to provide us with a final update by September 1, 2008, and we look forward to receiving that report and reviewing LSC's progress. I want to emphasize, however, that some of these corrective actions will take time to fully and properly implement, and many of these actions will need to be continually evaluated through an LSC ongoing risk assessment and monitoring process, which we are recommending also be put in place. In conclusion, LSC serves a key mission, which is being highlighted during the current period of economic hardship for many workers and their families who need legal services they could not otherwise afford. Effective governance, internal controls grantee oversight, and diligent and proper performance by grantees are all critical to LSC's mission, the effective use of its appropriated funding, and its ability to serve the legal needs of low-income people. Maintaining sound internal controls and governance will be key to maintaining trust and credibility of LSC's mission and operations going forward. That concludes my statement, and I would be happy to answer any questions that you have. [The prepared statement of Ms. Franzel appears as a submission for the record.] Senator Cardin. Thank you very much. Ms. Rebekah Diller? STATEMENT OF REBEKAH DILLER, DEPUTY DIRECTOR, JUSTICE PROGRAM, BRENNAN CENTER FOR JUSTICE, NEW YORK UNIVERSITY LAW SCHOOL, NEW YORK, NEW YORK Ms. Diller. Thank you, Senator Cardin. On behalf of the Brennan Center for Justice, I would like to thank you for holding this hearing today and permitting me to testify. The Brennan Center for Justice is a nonpartisan think tank and advocacy organization, and for the last 10 years, we have been deeply involved through litigation, research, and advocacy in promoting equal access to the courts. I am going to depart from my written testimony a bit and just speak about some of the issues that have come up during this panel. First, I would just like to say that I agree with Mr. Boehm that certainly we can look at other models for closing the justice gap and for improving access to courts in this country. I think expanding small claims court jurisdiction and things like that are very useful. But I think we have to be very honest that that is just not going to close the justice gap. When you look at the types of cases that legal services programs handle, primarily housing court cases, family court cases, those are cases where the other side has a lawyer, and in order for there to be any type of fairness in the proceeding, the legal services client needs to have a lawyer as well. So we can talk about these other matters that may complement efforts here to close the justice gap, but they are simply not going to fix the fact that when you have one side represented, if the other side is not represented, you have a very unfair proceeding. One study that I cite in my testimony found that when a side is represented by a lawyer, they are five times more likely to prevail in litigation than when they are unrepresented, so that gives you a sense of the real difference that a lawyer makes. The other thing I will just address is the fact that the justice gap study, while it was produced by the Legal Services Corporation, is consistent with every other study and in some ways understates the problem that every other study has found about the legal needs of low-income people going unmet. So it is not just LSC studies. It is the study of every access-to- justice commission that looks at the issue. The Brennan Center itself I can tell you did a study on a local level where we looked at New York City housing court and we looked at how many tenants were represented, and we found that 76 percent were unrepresented, and that is in contrast to the landlord side of the proceedings where most observers estimate that about 90 percent have a lawyer. So the fact that low-income people go unrepresented is pretty irrefutable. The other thing I will just note is that when you look at how the U.S. compares to other developed countries, it is very interesting, because while I am not really able to speak to the number of lawyers or lawsuits, what I can tell you is that we fall way behind in terms of funding for civil legal aid. England spends about 11 times as much per capita on legal services as we do; Germany and France spend about as 2 times as much. So while there may be fewer lawsuits or lawyers, certainly when low-income people have legal needs there, they are much more likely to be represented. The other thing I will just say is that to the extent that there is an assumption that, you know, somehow there is a self- interested effort here by lawyers to generate more business for lawyers, I think the salary quotes that we have heard from several witnesses really underscore the fact that no one is going into the legal services business for the money. So if we were really here for an effort to generate business for lawyers and provide funding for more and more lawyers just for that sake itself, we would not be talking about legal services. People go into legal services because they want to do good work, and they often do so at great financial sacrifice. The other thing I will address here today is one step that the Congress could take which would not cost a penny, but I think would go pretty far toward helping improve the justice gap problem that we have talked about, and that is to eliminate the restriction on State, local, and private funds that is attached to the LSC appropriation every year. We have talked a lot about the involvement of State and local governments as partners, of IOLTA programs as partners, of private donors as partners. But what the Federal Government has done is it has said to local nonprofit organizations, if you take one penny of our money, we are going to restrict how all your other funds are spent. This is way out of line with how every other Federal grantee is treated. The normal course is to certainly restrict how Federal funds are spent, but not to tell grantees and others, like State governments, how they can spend their funds. What is happening as a result of this restriction is that the Federal Government is actually deterring partners from getting involved in the civil legal aid delivery system, deterring private funders from giving to legal aid programs because their funds will be restricted. It is deterring State governments and State actors from contributing to LSC-funded grantees. And it is also creating waste in the system. I will give you an example from Oregon. Oregon State justice planners did not want their State funds to be restricted by the Federal Government, so they set up two systems of legal aid delivery that run parallel to each other. That means two sets of rent payments ever month, two sets of computer networks, copy machines. All the overhead that one office has now has to be borne by two offices. And the programs there calculated that if they did not have to operate separately due to the restriction on State, local, and private funds, they would save about $300,000 a year. That same $300,000 a year could go toward opening a new office in an underserved rural area of the State and serving more clients in their bread and butter legal services needs. We have seen the impact of this restriction in particular in the subprime crisis and in efforts to defend homeowners against predatory lenders. One of the things it does is it tells legal services attorneys that they can't seek attorneys' fee awards even when such awards have been authorized by consumer fraud statutes. And this means that their bargaining power is reduced when litigating in these cases. Wrongdoers do not have to pay fees that have been authorized by statute. And they are also depriving programs of potentially another source of revenue that could go to serve yet more homeowners in need of help. I will stop there and take any questions. [The prepared statement of Ms. Diller appears as a submission for the record.] Senator Cardin. Thank you for your testimony, and I thank all six of you for your testimony. It certainly helped complete our record here. Both Ms. Diller and Ms. Wallace spoke about the restrictions in the LSC law, which I am glad you both mentioned. It just seems to me that there are easier ways for priorities to be determined than putting legal restrictions in the statute itself. You went through, Ms. Diller, a list of the restrictions and mentioned them. Did you mention them in priority order? Do you believe that outside funding is the most problematic restriction that LSC has? Or just there is no rhyme or reason to the list? Ms. Diller. Well, I would say the restriction on other funds is the most problematic because of the way that it ties up the money that comes from other sources, the way it distorts the planning that local communities can do about how they construct civil legal aid delivery systems. It deters other funds from coming into the system. So I do think that is the most problematic, and I would just point out that to the extent Congress has concerns about how its money is spent, it can certainly regulate that. But this is really outside the norm with the way that any other nonprofit grantee type of organizations are treated. Senator Cardin. Ms. Wallace, you mentioned that same restriction. I do not believe you mentioned other restrictions. Is that the area that you think is the most important for Congress to take a look at? Ms. Wallace. We agree that the restrictions generally present problems, but certainly agree that that particular restriction is one of the most problematic, and it is one of the ones that should be prioritized for a number of reasons. If we really are going to close the justice gap, we need to make the partnerships that are going to be required to do that as effective as possible. And that restriction really does hamper our ability to do that and hampers programs' abilities to do that. Not only that, but as was pointed out, we think that it is a pretty easy fix. So that is a good place to start. Senator Cardin. Mr. Boehm, you talked a little bit, particularly in your statement, about the advantages of pro bono. Do you favor a requirement that all lawyers participate in pro bono? Mr. Boehm. I would think there would be constitutional, if not ethical, problems with requiring it. It is a duty of the profession, and the profession--I think you have to look at a profession as a regulated monopoly, and people who are able to practice law privately have a responsibility. It comes with the very notion of a profession. And I think this should be every kind of suasion short of absolute requirement to the degree they should be publicly shamed if they do not, if they are in private practice and offering that. And I think also, by the way, lawyers who work for the Federal and State governments, lawyers who now have problems doing that sort of thing, should be allowed to do it. And I think there ought to be a waiver for certain types of legal services when attorneys who are in different States from which they were admitted to the bar would like to do some volunteer work. Right now, you have to be admitted to the bar, which can be a problem in some cases. Senator Cardin. You raise some very legitimate points, but if we could work out the issues that you have referred to, would you favor a legal, enforceable obligation for attorneys to participate in pro bono, with the caveats that you have already mentioned, and others? Mr. Boehm. Yes, the main one is that if you force somebody to do that, it almost gets to--I have seen this debated. This has been debated by leading people on both sides. The Federalist Society had a series of debates. Mr. Alex Forger, who is the former LSC president, took the position it should be legally enforceable. I think there are a lot of steps you can take right up to that line that go very, very close to requiring it, and a number of States have done it. I will give you some very quick examples. There is increased reporting requirements. In some States you have to go into great detail. Certain firms have made it firm policy. There is any number of things you can do, and there are some proposals, there are policy proposals out there for certain types of tax credits in a very limited way to further increase pro bono. There is no shortage of lawyers per se. There is a shortage of pro bono. Senator Cardin. Judge Livingston, why hasn't the bar association taken a more affirmative view on the requirements for pro bono? Judge Livingston. I think they have, in fact. I think that there are a number-- Senator Cardin. To make it mandatory. They have not taken steps to try to make it mandatory. Judge Livingston. They have not taken steps to make it mandatory for some of the reasons that Mr. Boehm has pointed out and more practical ones, perhaps, about lawyers not feeling--feeling an obligation, certainly, to the profession and to the community to participate in pro bono, but I don't know that involuntary servitude is really the way to go. At least, that has been the argument framed by some in this debate. I disagree with that. I think that we could certainly do-- Senator Cardin. When I got out of law school-- Judge Livingston.--more than we are doing. Senator Cardin. When I got out of law school and walked past a courtroom, a judge grabbed me and said I would handle this case. I guess I could have told the judge no if I never wanted to go before his court again. But I handled the case. Is that-- Judge Livingston. Let me suggest-- Senator Cardin.--involuntary servitude? Judge Livingston. I don't think it is. I mean, I am in favor of mandatory pro bono personally. But I will tell you that as a representative of the profession, it is not a popular notion. I will also tell you, though, that the profession has certainly stepped up. I bet when you went to law school that law firms, big law firms that are paying these top- dollar salaries that are elusive to legal aid lawyers, those law firms traditionally have not allowed billable hour credit for pro bono work. Now that is a reality. So that is one very simple way that law firms have been responsive and have been out front encouraging the associates in their firms to participate in pro bono. There are a number of initiatives in every State and local bar association that I am familiar with that not only encourages pro bono, but actively recruits pro bono lawyers, they participate in the pro bono organized activities of the bar. They have--we just left Minneapolis at the Equal Justice Conference, which used to be called the ``pro bono conference,'' where there were a number of strategies discussed about ways that you can increase the interest among lawyers in doing pro bono, in actually helping them in carrying out their pro bono responsibilities as members of the profession. And there are just untold and millions and millions of examples of the profession stepping up to the plate to take this responsibility, not just in doing it but in reporting it and encouraging young lawyers in their firms to do so as well. It is an effort that we take seriously. Senator Cardin. The results are inconsistent among the States. Judge Livingston. I am sorry? Senator Cardin. It is inconsistent among the States. Judge Livingston. It is definitely inconsistent. It is inconsistent in communities within a State. Senator Cardin. That is true also. There have been more aggressive steps taken in some State over other States. I am not aware, though--maybe I am wrong about this--that the American Bar Association has taken a firm position that there is an obligation for attorneys to handle pro bono, that there should be reporting requirements in every State, that there should be specific programs in law schools to sensitize lawyers to enter pro bono programs. There is a whole list of things that they have done. I am not aware that the ABA has actually come out and said that every State should adopt these or try to make this a standard practice within the canons of ethics of attorneys. Judge Livingston. Well, the canons of ethics that our association recommends do include taking the responsibility seriously and certainly encourages it. The Center for Pro Bono is one example of that. There is information in my written remarks about a website reference that you can go to to find out about all the initiatives going on at the Center for Pro Bono. So there are a number of efforts, and I would say--I never want to disagree with a Senator, but I would certainly want to say that the association is on record absolutely encouraging States, encouraging State bar associations, encouraging local bar associations, and encouraging every single lawyer that is a member of the profession, certainly a member of the association, to engage in pro bono activities and to report that. Senator Cardin. Well, there is a big difference between encouraging and taking it to the line, and I would suggest beyond the line that Mr. Boehm is suggesting, in which you have the information in front of you about every attorney in your State as to what they are doing. And that is what we do in Maryland. Every lawyer must report their pro bono activities. If you want to practice law in Maryland, you have got to do that. Judge Livingston. Fabulous. Senator Cardin. Well, why doesn't the bar association work to require that in every State? Judge Livingston. Well, I think that-- Senator Cardin. My point is this. My point is this. The request is being made for the Federal Government through the taxpayer support to provide a greater level of activity to meet this gap. I support that. But the bar association also must take this to the next level. This is a partnership. Judge Livingston. I agree. Senator Cardin. I will not forget the lesson I learned from Governor Schaefer when I went to him and asked him for more State money. The first question he asked me: ``What are the lawyers doing?'' I think that is a legitimate question. Judge Livingston. I agree. Senator Cardin. And I happen to agree with the point that pro bono is a very, very valuable part of filling this gap. Judge Livingston. I totally agree. Senator Cardin. We need to do a lot more. Judge Livingston. I totally agree. I don't disagree with anything you said about how lawyers have to step up. What I am telling you, Senator, is that lawyers have stepped up. That does not mean we can't step up further. It does not mean we can't take a more active role. It does not mean we can't be more aggressive. The American Bar Association is totally 100 percent committed to all of the efforts that you have outlined, all of the suggestions that have been made here today, and this is not the only forum that we have heard them, certainly. And we will certainly look at all of those. We have been looking at them. That is what the Center for Pro Bono does. That is what the Pro Bono Committee does. That is a very important committee of the association. We recognize at annual awards ceremonies the work of pro bono lawyers throughout the country in local bars, in State bars, that are doing just enormous--giving an enormous effort of their time and energy and staff time and money toward this effort. And so lawyers do take this responsibility seriously, the association takes this responsibility seriously. And while I agree that certainly more could be done, I want you to understand and appreciate the fact that the association is doing quite a bit to promote pro bono and to encourage pro bono among all of the members of the profession. To the extent that we can do more, we will take that challenge and continue to work on it with your recommendations in mind. Senator Cardin. Thank you. I appreciate that response. I really do. Our commission came out with a recommendation for mandatory pro bono, and I thought it was an ethical commission, Mr. Boehm. I did not think we were trying anything that was unconstitutional or unethical. Ms. Franzel, is there anything more that you would like to see from the Legal Services Board in regards to how they are reacting--I know you want to see the final products, but is there anything that is of concern to you as to how they are currently responding to your request? I know that you have not completed the information, but are they on track to responding to the suggestions that you have made? Ms. Franzel. Yes. I am very encouraged by the response. I do want to caution that many of the really difficult initiatives are in the planning stages or the initial stages, and so it will be really important to take a look at things like risk assessments and grantee oversight--those are the big- ticket items--and take a look at them over the next year or so. Some of the other structural issues can be taken care of very quickly, such as restructuring the board and its responsibilities, and I am very pleased to see that those are already in process. And, of course, we will want to see how all of this is implemented. Senator Cardin. Thank you. Mr. Joseph, on the salary levels, I haven't check the legal service--the Legal Aid Bureau as to their salaries recently. Are you having trouble in retaining attorneys? Is there a major gap in Maryland on the payment to legal aid attorneys versus other areas of public interest law? I know we are not competing with the large law firms, but in other areas of public interest law. Mr. Joseph. All of the above. Generally in Maryland we are very aggressive about that. In 1996, our starting salary for lawyers was $25,000 a year, and it had been frozen for 7 straight years. A lawyer who worked there for 7 years--and we had many--had not gotten a single penny increase. This year, we are starting lawyers at $45,200. But even that puts us between $9,000 and $10,000 behind the State attorney--I know because my daughter works there--behind the Attorney General, behind public defenders. And what happens is that we are aggressive about recruiting the most committed and the most competent. And as soon as they show their wares in the public, they get recruited and folks try to snatch them, and they go. So it is a difficulty. We do things to try to compensate for that. We have a nice liberal vacation schedule. We try to give leave for child care, different innovative ways to compete in the marketplace. I think Mr. Boehm doesn't really understand what it is to run a legal aid program. It is a business. We have 300 employees, 140 lawyers, 13 physical locations around Maryland. We can't rely on $3.9 million from the Legal Services Corporation, so we have hundreds of individual contributors. We have to have a program observing that. We have lawyers who form a separate Equal Justice Council, lawyers from all the big law firms and small law firms. All they do is raise money for legal aid. We have pro bono hours being donated. Yet we touch a little piece of the need out there. I think I demonstrated that when you live on a budget of poverty, every single day, every year, you will have the need for advice, for counsel, and sometimes representation. Mr. Boehm waved his hand at numbers, about somebody who got a small piece of information on the phone. Let me tell you, sometimes a piece of information that lasts 1 minute can give you the peace of mind that makes a difference in your life. Rich clients know it, too. They call their lawyers to get one piece of advice, and poor folks do it, too. I support all the GAO ideas of efficiency and improvement. I support all the ideas of alternatives. We have mediation, we have everything. We still don't meet it. This is a serious crisis. The magnitude in numbers of people living in poverty is overwhelming. The frequency of the need for legal services is overwhelming. The complexity of the issues. I don't want a patent lawyer handling a complex housing issue. I don't want an entertainment lawyer trying to navigate complex Medicaid rules. No. It is going to be a very difficult time matching skills and need in a time-specific situation. Senator Cardin. Thank you for that response. By the way, I want you to engage the private community in the funding of legal aid. I want the law firms involved in the funding of legal aid. I think that is a healthy situation. And I think it is a lot easier to get the law firms and the private sector involved when the Government is a partner and the Government is a meaningful partner. And when you see the erosion of the Government support, it, I think, makes it more difficult to get the other partners to contribute and to provide the pro bono services that are necessary in order to meet the access-to- justice issues. So I want to see all the players, and that is why I do believe the bar must figure out new ways to energize lawyers to help fill this gap, because lawyers do have a special responsibility here. I do believe it is an ethical issue for attorneys to be involved in pro bono activities, and the failure to do so to me is an ethical violation of the oath of an attorney. Let me again thank you all for your help on this panel. I can assure you there is tremendous interest on this Committee. I have talked to most of the members of the Committee, and they are very much interested in getting involved as we try to develop strategies to meet this gap. There is not a uniform position here. There are different views. But I think there is a genuine desire to close this gap. And we certainly will be working very closely with the Health and Education Committee and with the House Committees to try to develop a strategy. Clearly, this needs more legislative attention, and I am hopeful that as Congress goes through the remainder of this year and next year, we will look toward ways that we can elevate the effectiveness of the Federal participation in these programs, obviously through additional resources, but we think there may be other ways that we can be helpful. The record will remain open for 1 week for additional materials. I ask the witnesses to respond to members' questions in a timely manner if they are submitted by the members of this Committee, and without objection, statements from Senators Leahy and Feingold will be included in the record. The Committee will stand adjourned. Thank you. 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