Legal Services Executives Living Large on Tax Dollars

By Larry Margasak
Associated Press
Thursday, August 17, 2006

The federal program that provides legal help to poor Americans turns away half its applicants for lack of resources. But that has not stopped executives from lavishing expensive meals, chauffeur-driven rides and foreign trips on themselves.

Agency documents obtained by the Associated Press detail the luxuries that executives of the Legal Services Corp. have given themselves with federal money -- from $14 "Death by Chocolate" desserts to $400 chauffeured drives to locations within taxicab distance of their offices.

The government-funded corporation has spacious headquarters in Georgetown -- with views of the Potomac and rent significantly higher than that of other tenants in the same building.

And Legal Services board members wrote themselves a policy that doubled the amount they can claim for meals, compared with staff employees.

Congress created Legal Services as a nonprofit corporation run with federal money to provide legal help in civil matters for Americans who cannot afford lawyers. It funds neighborhood clinics across the country that have lawyers to provide such help.

Three congressional committees have questioned the program's spending, as has the corporation's internal watchdog. The chairman of the Senate Finance Committee is threatening to withhold money if the corporation does not trim extravagance.

"It's waste and abuse," said Sen. Charles E. Grassley (R-Iowa), citing the board's doubling of the meal money as an example. "At 200 percent, it seems to me what we would call in Iowa living high off the hog."

Legal Services officials defend their program, saying administrative expenses are kept separate from money distributed to the local, independently run legal outlets.

Spokesman Thomas C. Polgar said LSC President Helaine M. Barnett and Chairman Frank B. Strickland "are aware they are using taxpayer funds and try to operate in a manner that is frugal and appropriate." Barnett is a former legal services attorney in New York; Strickland is an Atlanta lawyer.

Barnett declined to be interviewed; Strickland did not return phone messages seeking comment.

The scrutiny of Legal Services' spending comes as the corporation says it does not have enough resources to meet many poor clients' needs.

A Legal Services study in October found that for every client who receives service, one applicant is turned away for lack of resources. Because only those who contacted the program for assistance were included in the study, it is likely the study underestimated the unmet need, the corporation said.

Nine recent state studies demonstrated that less than 20 percent of the legal needs of low-income Americans were being met, LSC said.

Neighborhood Legal Services, at 701 Fourth St. NW, the local program that serves the poor in Washington, is a refuge where a federally funded lawyer can help a client stave off homelessness, fight an unscrupulous landlord, file for divorce or receive help with a host of other legal problems.

The carpet in the lobby is worn and stained. Some small offices can barely contain a desk. Unlike Legal Services headquarters' well-stocked library, filled with criminal code books and Supreme Court opinions, the local library has mostly bare walls. The conference table doubles as a staff lunch table.

Legal Services' internal watchdog, Inspector General Richard "Kirt" West, has questioned whether the corporation's headquarters at 3333 K St. NW has more space than it needs and whether it pays too much rent.

The headquarters has multiple conference rooms and kitchen/pantry areas. Yet, the corporation's 11-member board meets at hotels around the country, including Washington, at costs ranging from $20,145 to $55,125 -- the latter in San Juan, Puerto Rico.

The decision not to use the headquarters conference room was explained in an October 2004 memo from Strickland. He said board members, who work outside the corporation, preferred the Melrose Hotel in the same upscale neighborhood as the headquarters. The hotel is located on Pennsylvania Avenue, between the White House and Georgetown.

The board members sought "convenience to their rooms" and did not want to "feel confined" to headquarters for two days, Strickland said. He also said he was worried that the headquarters lacks privacy because "all meeting rooms at LSC have glass walls."

Bills from the Melrose, with all costs per person, included a $59 three-entree buffet, an $18 breakfast featuring scrambled eggs with chives, a $17 breakfast including Belgian waffles, a $28 deli buffet, a $13 "high tea" service, a $12 "bagel break," a $12 "Crazy for Cookies" assortment and $14 "Death by Chocolate" desserts.

Polgar and Charles Jeffress, the LSC's chief administrative officer, said that the headquarters conference room can hold about 80 people, but that it is too small to accommodate the 11-member board, the staff, the media and the public.

They also contended that meal costs for board members could be just as expensive if catered at headquarters.

The board has fashioned for itself an expense policy that permits members to receive as much as 200 percent of the allowable meal expense, as long as board members dine together. "The only time it was ever used was in conjunction with a board meeting," Jeffress said. The policy was recently rescinded after congressional investigators questioned it.

Then there were the limousine services. Strickland had a packed schedule on April 25, so the agency ordered a car and driver to take him and Barnett to meetings on Capitol Hill, about a 15-minute ride from headquarters. The car also took them to Arlington National Cemetery for a funeral and to a separate memorial service in Arlington -- all short rides.

Even the Legal Services Corp. comptroller, David Richardson, questioned the expense. "With cab fares from our office to Capitol Hill costing $20 and the nominal cost of a cab to Arlington Cemetery and return, this $423.99 seems to be an extraordinary cost," he said in an internal memo.

Polgar, who acknowledged making the decision to hire the car, said he was concerned that Strickland would not meet his schedule.

Barnett also used a hired car and driver to attend a funeral service for a former board member in Harrisburg, Pa., about a two-hour drive. The cost: $400. Polgar said Barnett, who does not have a car in Washington, wanted to work during the trip rather than rent a car and drive herself. Polgar said the cost was competitive with train and airline fares.

The Legal Services headquarters in Georgetown was purchased by a nonprofit group, Friends of the Legal Services Corp., that was formed to secure a permanent headquarters.

Thomas F. Smegal, the board chairman of Friends of the LSC, said the $38 per-square-foot rent charged Legal Services is a good deal -- even though other tenants are paying less than $30.

Smegal said LSC's rent is fixed for the 10-year lease, while other tenants' rents will rise. The tenants paying lower rent already had those leases when Friends took over the building, said Smegal, a San Francisco lawyer. When the building is paid off, he said, it will be turned over debt-free to the Legal Services Corp.

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