The Justice Department yesterday asked a Senate Governmental Affairs subcommittee to approve legislation that would allow it to hire private lawyers on a contingency basis to file suits against people who owe the government money.
The agency described the request as another step in the Reagan administration's campaign to recoup more than $40 billion in delinquent federal loans.
But the department's motives were questioned by two senators who had just introduced a bill to allow federal agencies to hire outside attorneys directly, with only limited supervision by Justice.
Sen. Alfonse M. D'Amato (R-N.Y.), who co-authored the bill with subcommittee Chairman Charles H. Percy (R-Ill.), accused department officials of making a "last-minute pitch" to protect "your own turf."
In one pointed exchange with J. Paul McGrath, who heads the department's Civil Division, D'Amato said he was unconvinced that the department considered debt collection a priority based upon "the absolutely shocking, shocking lack of attention" it has given the situation.
McGrath acknowledged the department had an "enormous backlog" of collection cases, but he contended that the agency had "compiled a remarkable record of success" and eventually would be able to handle collection cases in major cities without outside help.
For more than a year, private debt collectors hired by the Education Department to go after delinquent student loan recipients have complained that many debtors ignore their warnings because they don't believe the government will take them to court. Justice Department contends that it has filed suits when possible, but says many of the debts are old and difficult to collect because the debtors have moved.
But the senators said the department has not pursued debt cases aggressively. Percy said the subcommittee staff had chosen 15 Education Department cases at random to see what action Justice had taken.
Four of the cases had to be dropped because government attorneys had not acted before the statute of limitations expired. Eight were dropped after U.S. attorneys said they could not find the debtors. Percy said his staff found the addresses of four of those debtors by calling directory assistance.
Education officials said they had given Justice 24,000 cases worth an estimated $61 million, but it had collected only $4.6 million. Education witnesses said they had another 26,000 cases that they could refer, but added that they don't believe Justice could handle the caseload.
D'Amato said he didn't want U.S. attorneys to become debt collectors because they had more important things to do. But, he criticized the department for refusing to admit that it hasn't done a good job and for refusing to relinquish control of the litigation.
The subcommittee praised the Education and the Health and Human Services departments for improving their collection efforts. However, it criticized the Small Business Administration for not making significant improvements in its collections.
Percy said Justice should improve its record of collecting fines from criminals. In the past 16 years, he said, only half of the fines levied by federal judges have been collected.