ELSIE SIMER IS ONE of nine plaintiffs who recently won an $18 million settlement by suing the federal government's Community Services Administration. The 73-year-old resident of Melrose Park, Ill., received her $250 check in late July.
So did Hilda Beller, 61, who with her 81-year-old mother survives on an income of less than $200 a month in Breinigsville, Pa. The $250 checks also went to Arlene Whitehouse, a blind octogenarian who lives alone in Maine; Arthur Boucher, 70, another housebound Maine resident; Hilda Spinney, 58; Rose and Robert Henderson of Lancaster, Pa., who struggle to support their family of five on about $600 a month; Debra Jones of Manheim, Pa., and the Gray Panthers, a private advocacy group for the elderly.
The nine plaintiffs whose names appear on the class-action complaint in Simer v. Olivarez collected a total of about $2,000. They are not likely to ask what happened to the rest of the $18 million, however. Of the six reached for comment, three professed no knowledge of the lawsuit and only one said he had been consulted in advance about the settlement.
In any case, the big winners in the settlement weren't the class of complaintants who supposedly were doing the suing. Much of the rest of the $17,998,000 appears to have been divided among: governmental agencies (even the agency being sued was able to add four more bureaucrats to its rolls as a result); quasi-public community action groups with a good deal of political clout, and the so-called public interst lawyers of the type who launched the suit in the first place.
Indeed, a close look at Simer v. Olivarez suggests that it was one sweetheart of a lawsuit for nearly everybody except the complaintants -- and the taxpayer.
Various public interest law firms filed the complaint in federal district count in Chicago in September 1979 against the Community Services Administration, the successor agency to the Office of Economic Opportunity, which, you may remember, was the cornerstone of Lyndon Johnson's War on Poverty. The complaint alleged that the nine plaintiffs "and all others similarly situated" had been deprived of CSA energy crisis assistance payments because of arbitrary requirements. In particular, the suit said, $18 million of the $200 million appropriated for fiscal 1979 to help poor people cope with soaring energy prices had gone unspent. A provision that such unspent funds would have to be returned to the Treasury violated the Administrative Procedure Act and due process laws, the suit contended.
It was no accident, however, that a termination date for spending the $200 million had been inserted in the legislation for the program. The Office of Management and Budget insisted on the inclusion to make certain that the program would confine itself to winter emergencies. Also, CSA hadn't had much luck with two previous "energy crisis" programs. An investigative report by a congressional subcommittee considered it as having "achieved questionable results, beset by inadequate management practices, and leaving a sense of expectancy and dependency among the poor. . . ."
A specific appropriations bill for further energy crisis payments might not have survived this skeptical climate. Instead, the $200 million was wrapped in with the broad continuing resolution Congress passed in order to keep the CSA from folding. The subcommittee condemned this act as "presumptuous" because Congress had pased both previous programs with considerable reservation and specifically as one-shot affairs. Furthermore, in bypassing the normal route, CSA had "eliminated Congress's descretionary decision-making authority."
The OMB, in approving the CSA request, had stipulated that the $200 million couldn't be spent after June 30. When the date rolled around, $18 million remained unobligated and apparently doomed to be returned to the Treasury. Yet a previous lawsuit in a similar case against CSA had prevented that from occurring; a group of public interest law firms figured the trick could be repeated.
Of the claimants named in the suit who could be reached for comment, those who were aware of the suit at all insisted they had been steered into the lawsuit by public interest law firms. The firms all receive grants of between $285,000 and $850,000 from the Legal Service Corp., an independent agency established by Congress, plus additional support from what used to be the Health, Education and Welfare Department.
Preliminary hearings led to a pretrial settlement between CSA and the plaintiffs. The plaintiffs would each receive an amount equal to the maximum allowable under the energy crisis payment program, or $250, yet no attempt was made to identify "all other similarly situated" -- the poor on whose behalf the class action was instituted.
CSA rationalizes this deliberate oversight by insisting that reopening the program for such a trifling amount would have caused no end of administrative headaches. In addition, since Congress had already allocated vast amounts for a similar 1980 program, CSA sought a settlement which would "have impact," according to Richard Saul, chief of energy programs at the CSA.
In other words, CSA sought a settlement which would allow it to use the funds to finance pet projects which otherwise might have been terminated because of opposition or a lack of interest in Congress.
How will the $18 million (less $2,000) be spent? As outlined in the legal settlement, $4 million will go to a hypothermia program run by former CSA grantees to alert people to the dangers of freezing to death; over $2 million will be spent to subsidize solar power programs; and roughly $8 million will go to public advocacy and legal services. The remaining $4 million, originally intended for emergency energy conservation kits, will probably end up in the advocacy kits as well.
Here are some of the particulars of the distribution:
$150,000 will keep the Small Farm Energy Project, a CSA grantee, alive for an additional two years, despite a report by Rural Development Inc., an independent research and consulting firm, that was partly laudatory but also conceded that "the level of major energy innovation is less than that would be necessary to have a significant impact on energy use and income level cooperating farms."
$1 million will be awarded to consulting firms and 15 Community Action Agencies, essentially to produce reports to inform us that energy is expensive.
$4 million will go to 23 of CSA's Associations of Community Action Agencies that were due to be terminated. About $2 million of that sum will flow through to the existing legal service network for various contracts. The associations, such as Energy Alliance, act as consumer advocates, working for such things as utility rates, customer service regulation and challenges to utility projections of capacity needs.
The National Consumer Law Center will receive $1.8 million directly plus another $500,000 to distribute to Community Action Agencies, legal service organizations and consumer utility advocacy groups. The $700,000 grant the National Consumer Law Center received in 1979 from CSA was to have been its last; CSA didn't anticipate adequate appropriations to keep the NCLC going. Now it has $900,000 a year for the next two years.
$200,000 for the Associations of Community Action Agencies and Community Action Projects for "training and technical assistance in organizing and coalition building" under the auspices of the Citizens Labor Energy Coalition. These civic-minded experts concocted Big Oil Day last October and more recently participated in Big Business Day.
Finally, to administer the settlement, CSA created four new positions in its own offices, positions which Congress most probably would never have authorized.
Thus CSA and the public advocacy and legal services groups may have hit upon a marvelous recipe to render Congress's intentions moot and feather their own nests: Leave money unspent, be sued and settle as thou and they can best profit.
"I can prove everything but intention," said Peter Metzger, who runs an internal think tank for the Public Service Co. of Colorado. "You have this friendly lawsuit where all these publicly funded legal services groups rush to court and distribute funds among the litigants."
Assuming GSA could have won the case, fiscal responsibilities would seem to demand that it do so and return the $18 million to a government already under attack for excessive spending. And if, as CSA's lawyers assert, the judge gave them reason to believe they would lose the case, then shouldn't the funds have at least been used for the purpose for which they were intended -- to alleviate the burden of rising fuel prices on the poor -- instead of propping up net priorities of a floundering agency? CAPTION:
Illustration, no caption; By Geoffrey Moss for The Washington Post