The General Accounting Office has found that former employes of the Legal Services Corp. violated federal spending restrictions in January, 1981, just before the Reagan administration took office, when they held a training seminar focused largely on how to lobby against anticipated budget cuts.
The GAO said yesterday that the corporation and its subsidiary programs, which provide legal assistance to the poor, apparently violated prohibitions against political lobbying and advocacy.
Sen. Orrin G. Hatch (R-Utah), who heads the Labor and Human Resources Committee, which has jurisdiction over Legal Services, had asked the GAO to investigate allegations of irregularities in the program.
Hatch called the alleged violations "tantamount to stealing from the poor."
"We should fix the law so that every dime of federal money from this program helps poor people and not one penny goes for illegal political activities," he said.
Under the regulations, the corporation and its affiliates are prohibited from most lobbying, from using training programs for political advocacy, from using corporation funds to create political organizations and from any involvement in referendum or ballot issues.
The GAO, in a preliminary report, found that Legal Services violated all those prohibitions at the Denver training session.
As one example, the GAO found that Jeanne Connolly, the former Legal Services assistant director of government relations, violated the political advocacy provision by urging "members of the audience to engage in political activities by encouraging their friends to write letters to members of Congress on behalf of the Legal Services program."
Connolly, who is no longer with Legal Services, said yesterday she believes that the GAO reached the "wrong interpretation" and that it "was perfectly legal for Legal Services employes to lobby for their authorization."
At that time, she said, the Reagan administration had already made it clear that it would like to eliminate the Legal Services program.
"People could see that the Legal Services program was coming under attack and they were calling and asking what they could do. We just pointed out that one thing they could always do was write to their congressmen," she said.
The GAO found that although Legal Services officials like Connolly and former president Dan Bradley, who was present at the session, "did not technically violate the regulations , they are not blameless . . . .
" They advocated a public policy of fighting threatened cuts in the Legal Services and other federal social benefit and entitlement programs . . . . Because the corporation encouraged grantees to engage in prohibited activities, it was in no position to discipline grantees for their violations," the GAO said.
The report also criticized Don Wharton of the Oregon Legal Services program, who said at the training session that Legal Services fund recipients in his state were "building a state-wide coalition dedicated to the survival of Legal Services."
Alan Rader, an attorney at a Los Angeles Legal Services program called the Western Center on Law and Poverty, was criticized for discussing a 1980 campaign he conducted to defeat Proposition 9, a referendum on cutting state income taxes. The GAO said Rader obtained a $61,655 Legal Services grant to run his effort.
The GAO said that although there have been violations, the government would be "unable" to recover the funds that were improperly spent. Meanwhile, the GAO will continue to look into other charges of Legal Services wrongdoing referred by Hatch.