The General Accounting Office, in a final report on the controversy, has found that consulting fees paid to Legal Services Corp. board members last year did not violate any laws or regulations and were consistent with payments made in earlier years.
The report, released last week following a preliminary draft in April, also said that corporation President Donald P. Bogard's contract was similar to those of previous presidents, except for a provision that promised Bogard, who took office last December, a year's severance pay if he is dismissed during his first 12 months.
The auditors cautioned, however, that Legal Services officials "lack adequate internal controls" for reviewing the $221 a day in consulting payments to board members because the board members do not have to specify what services they performed for the money. The report recommended that more detailed reporting be required.
During 1982, the GAO found, 14 board members were paid $274,283 in compensation and expenses for Legal Services work. The report said this was "significantly higher" than previous payments--a 76 percent increase over fiscal 1981--but was justified because of more board meetings, a search for a new corporation president and a 15 percent boost in the daily consulting fees.
The report said the largest amount of fees and expenses, the $39,391 paid to board member Howard H. Dana Jr. last year, was justified because Dana headed the search for a new president.
Bogard said yesterday that the GAO report "shows what we've said all along--there was no problem in what had happened or any violation of statutes or regulations . . . . I'd like to get this thing all behind us and not have to worry about extraneous factors. We have a job to do, and that's providing a service."
Bogard said board members had done considerable work that once was contracted out because the corporation's staff had been uncooperative and refused to carry out assignments. But he said this year's consulting fees would be much lower because of a smaller board and a reduced workload.
Most of Bogard's contract, including paid membership in a private club, was consistent with past practice, the GAO said, noting that the board had paid $2,750 to the Federal City Club for memberships for two former employes. One official told the GAO that there were no restaurants near the corporation office on 15th Street NW that were "appropriate for business luncheons," while another said a private club was "the easiest way for the president to entertain leaders in the legal profession and political figures."
The auditors did not question the board's decision to pay Bogard's living expenses in Washington while he delayed his relocation from Indianapolis until the school year ended, but they said that his severance pay provisions were unusual. Congress since has barred Legal Services from paying private club dues for any official and from giving Bogard any severance pay if he were to be dismissed during his first year.
Bogard said he sought the severance arrangement because he was giving up his job in Indianapolis despite the chance that a newly appointed board might decide to dismiss him.
He also said such amenities as private clubs could hurt the corporation's image "since this is supposed to be a program designed to help the poor," but said he would use "discretion" and would not join "the Congressional Country Club."
The report did not challenge $4,000 in expenses charged last year by former board chairman William F. Harvey for driving between Washington and Indianapolis. The auditors accepted Harvey's explanation that he read Legal Services material while his wife drove, and they said Harvey did not charge the board for another 457 hours he spent on corporation business.
The GAO also said that the "recess appointees" named to the board by President Reagan during a Senate recess were entitled to compensation.
Harvey said the GAO report "vindicates the board" and "rejects the smear job performed on the 1982 Reagan board." He also criticized The Washington Post's coverage of the story and said the report refuted "the neo-McCarthyism of certain persons in the Congress."
Harvey said the allegations were "a diversion created to prevent disclosure of information" that later was revealed by Sens. Orrin G. Hatch (R-Utah) and Jeremiah Denton (R-Ala.). Hatch's Labor Committee charged in recent hearings that former Legal Services officials improperly diverted federal funds to outside groups to lobby for the corporation's survival and for other political purposes.
William J. Olson, a former chairman of Legal Services, said that Reps. Robert W. Kastenmeier (D-Wis.) and Harold S. Sawyer (R-Mich.), who had criticized the board members over the consulting fees and contracts, had engaged in "the worst kind of smear tactics." Olson said the GAO report shows that the allegations were "without foundation" and that his legislative critics have been "repudiated."
Kastenmeier and Sawyer could not be reached for comment.