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With a private sector pro at its helm, Legal Services Corp. prepares its defense

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It’s been a tough year for Legal Services Corp., which distributes roughly $400 million in federal grants to legal aid groups providing civil legal services to the poor.

The Georgetown-based nonprofit faces potentially big cuts in its federal funding. The Senate Appropriations Committee this month moved to trim the contribution by 2 percent in the upcoming fiscal year. But a proposal by the House Appropriations Committee would go even further, slashing the infusion by 26 percent — a $104 million hit that would put the group at its lowest funding level since 1999.

Meanwhile, Legal Services is facing scrutiny about how it monitors the legal aid groups that receive grant money. A Government Accountability Office report issued in June 2010 found that “missing or flawed internal controls limit LSC’s ability to effectively manage its grant award and grantee performance oversight responsibilities.”

Since 2009, employees for at least four of the 136 legal aid groups that receive grants from Legal Services have been investigated by the Justice Department for improperly diverting federal money meant to aid the poor — including the former chief financial officer of Maryland’s Legal Aid Bureau who in December was sentenced to a 30-month prison term for siphoning $1 million in to fund personal trips to Atlantic City for gambling and prostitutes. Legal Services has since adopted 10 of the 17 GAO recommendations to tighten internal systems overseeing grantees, said LSC spokesman Steve Barr. The remaining seven are under way, he said.

In January, James Sandman, a longtime Arnold & Porter litigator, took the helm as president. Sandman was the firm’s managing partner from 1995 to 2005, and later served as general counsel for D.C. Public Schools from 2007 to 2011. He spoke to Capital Business about four things he wants to do to put the organization on better footing:

1. Create an independent body to make fiscal operations more efficient.

The Fiscal Oversight Task Force, created specifically to focus on financial practices at LSC, includes four board members and 13 people from outside the organization. Bringing together corporate chief executives, accountants, grantmakers and attorneys means “benefiting from their experience and advice on how we might do oversight better,” Sandman said. “That kind of approach — having people with different but relevant perspectives allows us to reach beyond the traditional legal services community to engage others.”

2. Focus on getting services to hard-to-reach communitie s.

In April, LSC formed a task force of more than 50 volunteer judges, lawyers, general counsels, law school deans and bar association representatives to nail down the 10 best ways to use technology to deliver pro bono legal services to poor people in rural and remote areas where there aren’t many lawyers — a problem legal aid programs have struggled to overcome. The group began meeting in early August and are expected to come up with formal recommendations in the first half of 2012.

3 . Prove legal aid is different .

“We need to make our case that legal aid is important and is a critical component of access to justice,” Sandman said. “We need to distinguish ourselves from other programs subject to cuts. Why are we different? Every program is getting reduced. In an environment like that, the burden is on us to explain why ... access to justice is different from other types of programs funded by the government because it has to do with who we are as a country. Hard times test values. And they’re not all the same. The first line of the Constitution mentions establishing justice as a core purpose of the national government. The framers mentioned establishing justice before providing for the common defense or ensuring domestic tranquility.”

4. Seek alternative rev en ue sources.

LSC is “trying to maximize other sources of federal funding, in addition to direct appropriations,” Sandman said. That includes seeking discretionary grants from the Justice Department created through the Violence Against Women Act, and from the Labor Department for employment re-entry grants for people coming out of the criminal justice system.

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