B-210338, B-202116, SEPTEMBER 19, 1983, 62 COMP.GEN. 654

B-210338, B-202116, SEPTEMBER 19, 1983, 62 COMP.GEN. 654

CORPORATIONS - LEGAL SERVICES CORPORATION - CONDUCTING TRAINING PROGRAMS - ADVOCACY OF PUBLIC POLICIES DURING JANUARY 1981, THE DENVER REGIONAL OFFICE OF THE LEGAL SERVICES CORPORATION (LSC) HELD A TRAINING SESSION FOR GRANTEE PERSONNEL OF THE REGION. THE TRAINING SESSION SPEAKERS INCLUDED CORPORATION HEADQUARTERS OFFICIALS AND OFFICIALS FROM GRANTEES, WHO PRESENTED MATERIAL ON THE LSC SURVIVAL PLAN. THESE OFFICIALS ADVOCATED THE PUBLIC POLICY OF RESISTING THE THREATENED REAGAN ADMINISTRATION CUTS IN THE LEGAL SERVICES AND OTHER SOCIAL BENEFITS PROGRAMS. THESE SAME SPEAKERS ENCOURAGED THOSE IN ATTENDANCE TO ENGAGE IN POLITICAL ACTIVITIES OF BUILDING COALITIONS IN ORDER TO MOUNT A GRASS ROOTS CAMPAIGN TO LOBBY CONGRESS TO VOTE AGAINST MEASURES TO CURTAIL THESE PROGRAMS. THIS ACTIVITY CONSTITUTED A VIOLATION OF 42 U.S.C. 2996FB)(6) WHICH PROHIBITS THE USE OF CORPORATE FUNDS BY GRANTEES TO CONDUCT TRAINING PROGRAMS THAT ADVOCATE PUBLIC POLICIES OR ENCOURAGE POLITICAL ACTIVITIES. CORPORATIONS - LEGAL SERVICES CORPORATION - COALITION AND NETWORK BUILDING THE LSC HELD A TRAINING SESSION IN ITS DENVER REGION IN JANUARY 1981. REPRESENTATIVES OF GRANTEES IN THE 5-STATE REGION ATTENDED. CORPORATE OFFICIALS AND GRANTEE STAFF ATTORNEYS PRESENTED LECTURES AND WORKSHOPS ON HOW GRANTEES COULD BUILD COALITIONS WITH COMMUNITY GROUPS AND AGENCIES TO FORM A GRASS ROOTS ORGANIZATION TO LOBBY CONGRESS FOR LEGAL SERVICES AND OTHER SOCIAL BENEFIT PROGRAMS. GRANTEE REPRESENTATIVES DESCRIBED COALITION BUILDING PROJECTS THAT WERE UNDERWAY. THIS ACTIVITY CONSTITUTES A VIOLATION OF 42 U.S.C. 2996FB)(7) WHICH PROHIBITS GRANTEES FROM USING CORPORATE FUNDS TO BUILD ORGANIZATIONS SUCH AS COALITIONS AND NETWORKS. CORPORATIONS - LEGAL SERVICES CORPORATION - ADVOCACY OR OPPOSITION OF BALLOT MEASURES DURING A JANUARY 1981 TRAINING SESSION AT THE LSC DENVER REGION, ALAN RADER, A STAFF ATTORNEY WITH THE WESTERN CENTER ON LAW AND POVERTY IN LOS ANGELES, AN LSC GRANTEE, GAVE A PRESENTATION ON HOW HE HAD ORGANIZED A CAMPAIGN WITH LSC FUNDS TO DEFEAT A 1980 CALIFORNIA TAX REDUCTION BALLOT MEASURE ENTITLED "PROPOSITION 9." HE HIRED CAMPAIGN COORDINATORS AND ORGANIZED BROAD-BASED COALITIONS WITH COMMUNITY GROUPS AND AGENCIES. THIS ACTIVITY CONSTITUTES A VIOLATION OF 42 U.S.C. 2996ED)(4) WHICH PROHIBITS THE CORPORATION AND ITS GRANTEES FROM USING CORPORATE FUNDS TO ADVOCATE OR OPPOSE BALLOT MEASURES. CORPORATIONS - LEGAL SERVICES CORPORATION - ENFORCEMENT RESPONSIBILITIES - COMPLIANCE OF RECIPIENTS WITH LSC ACT THE LSC AND CERTAIN GRANTEES CONDUCTED A TRAINING SESSION IN THE LSC DENVER REGION IN JANUARY 1981 DURING WHICH GRANTEE OFFICIALS VIOLATED CERTAIN RESTRICTIONS ON TRAINING AND COALITION BUILDING ACTIVITIES CONTAINED IN 42 U.S.C. 2996FB)(6) AND (7). THE CORPORATION FAILED TO CARRY OUT ITS ENFORCEMENT RESPONSIBILITIES UNDER 42 U.S.C. 2996EB)(1) TO INSURE THE COMPLIANCE OF RECIPIENTS AND THEIR EMPLOYEES WITH THE PROVISIONS OF THE LEGAL SERVICES CORPORATION ACT OF 1974, AND ASSUMED A CONTRARY ROLE OF ENCOURAGING GRANTEES TO VIOLATE THE AFOREMENTIONED PROVISIONS.

TO THE HONORABLE ORRIN G. HATCH, UNITED STATES SENATE, SEPTEMBER 19, 1983:

THIS IS IN RESPONSE TO YOUR RECENT LETTERS REQUESTING THIS OFFICE TO RENDER A LEGAL OPINION CONCERNING WHETHER ANY OF THE DOCUMENTS AND OTHER MATERIALS THAT YOU RECENTLY OBTAINED FROM THE LEGAL SERVICES CORPORATION (LSC) FILES AND TURNED OVER TO THIS OFFICE CONTAIN EVIDENCE OF VIOLATIONS OF CERTAIN RESTRICTIONS IN THE LEGAL SERVICES CORPORATION ACT OF 1974 (42 U.S.C. 2996).

BACKGROUND

AT THE END OF 1980, REPRESENTATIVE SENSENBRENNER PROVIDED THIS OFFICE WITH CERTAIN INTERNAL MEMORANDA HE HAD OBTAINED FROM THE LSC AND REQUESTED AN OPINION ON WHETHER THESE DOCUMENTS INDICATED THAT THE CORPORATION HAD VIOLATED FEDERAL ANTI-LOBBYING LAWS. WE RENDERED OUR OPINION IN 60 COMP.GEN. 423 ON MAY 1, 1981, HOLDING THAT THE MATERIAL IN THE MEMORANDA INDICATED THAT LSC HAD ITSELF ENGAGED AND ALLOWED ITS GRANT RECIPIENTS TO ENGAGE IN LOBBYING ACTIVITIES PROHIBITED BY FEDERAL LAW. YOU HAVE NOW PROVIDED US WITH SEVERAL HUNDRED ADDITIONAL INTERNAL MEMORANDA AND OTHER MATERIALS FROM THE LSC HEADQUARTERS AND REGIONAL OFFICE FILES COVERING PRIMARILY THE 1981 CALENDAR YEAR PERIOD AND HAVE REQUESTED A DETERMINATION CONCERNING WHETHER THESE MATERIALS CONTAIN EVIDENCE INDICATING THAT LSC OR ITS FUND RECIPIENTS VIOLATED STATUTORY RESTRICTIONS ON ITS TRAINING AND COALITION BUILDING ACTIVITIES AS WELL AS RESTRICTIONS ON ADVOCATING OR OPPOSING BALLOT MEASURES, INITIATIVES AND REFERENDUMS.

IT WOULD REQUIRE SEVERAL MONTHS FOR US TO REVIEW THE ENORMOUS VOLUME OF MATERIAL YOU HAVE SUPPLIED AND WE PLAN TO ACCOMPLISH THIS TASK IN CONNECTION WITH OUR INVESTIGATION OF THE LSC SURVIVAL PLAN THAT YOU REQUESTED. HOWEVER, IN ORDER TO COMPLY WITH THE SHORT TIME FRAME OF YOUR REQUEST TO PROVIDE YOU WITH A RESPONSE REGARDING THE ISSUES REFERRED TO ABOVE BY MID-SEPTEMBER 1983, WE HAVE SELECTED CERTAIN MATERIAL THAT, IN OUR OPINION, INDICATE VIOLATIONS OF RESTRICTIONS YOU MENTIONED.

TRAINING SESSION

ONE PIECE OF DOCUMENTARY EVIDENCE WE REVIEWED WAS A VIDEO CASSETTE RECORDING OF A TRAINING SESSION AT A DENVER REGIONAL PROJECT DIRECTORS MEETING CONDUCTED BY THE CORPORATION AND CERTAIN GRANTEES BEGINNING ON JANUARY 12, 1981, AT THE HILTON HARVEST HOUSE IN BOULDER, COLORADO. SIMILAR MEETINGS WERE HELD AT THE OTHER REGIONAL OFFICES DURING DECEMBER AND JANUARY 1981. SEVERAL OFFICIALS FROM THE CORPORATION HEADQUARTERS IN WASHINGTON AND FROM GRANTEE ORGANIZATIONS LOCATED IN THE WESTERN REGION OF THE COUNTRY WERE PRESENT AT THE SESSION AND MADE PRESENTATIONS. THESE OFFICIALS INCLUDED DAN BRADLEY, PRESIDENT OF THE CORPORATION, JEANNE CONNOLLY, ASSISTANT DIRECTOR OF THE CORPORATION'S GOVERNMENT RELATIONS OFFICE, ALAN HOUSEMAN, DIRECTOR OF THE LSC RESEARCH INSTITUTE, JONATHAN ASHER, EXECUTIVE DIRECTOR OF THE LEGAL AID SOCIETY OF METROPOLITAN DENVER, ALAN RADER, STAFF ATTORNEY WITH THE WESTERN CENTER ON LAW AND POVERTY IN LOS ANGELES, A CORPORATION-FUNDED CALIFORNIA STATE SUPPORT CENTER, AND DON WHARTON FROM THE OREGON LEGAL SERVICES CORPORATION, A CORPORATION-FUNDED OREGON STATE SUPPORT CENTER. THE SESSION WAS ATTENDED BY APPROXIMATELY 100 PERSONS, INCLUDING PROGRAM OFFICIALS AND STAFF ATTORNEYS FROM STATES COMPRISING THE DENVER REGION AND REPRESENTATIVES OF OUTSIDE ORGANIZATIONS.

WE HAVE SUMMARIZED AND IN SOME CASES QUOTED FROM THE PRESENTATIONS OF THE ABOVE-MENTIONED SPEAKERS. THIS MATERIAL IS INCLUDED AS APPENDIX I (EXCLUDED FROM THIS PUBLICATION BUT AVAILABLE UPON REQUEST TO THE GENERAL ACCOUNTING OFFICE). IN ANALYZING THE CONTENT OF THE FIRST DAY PRESENTATIONS CONTAINED ON THE RECORDING, WE MUST CONCLUDE THAT THE REMARKS OF THE SPEAKERS PROVIDE EVIDENCE OF VIOLATIONS OF STATUTORY RESTRICTIONS ON THE USE OF CORPORATION FUNDS FOR CERTAIN ACTIVITIES WHICH WE SHALL EXPLAIN BELOW.

TRAINING PROHIBITION

THE TRAINING PROHIBITION IS CONTAINED IN 42 U.S.C. 2996FB)(6) AND READS AS FOLLOWS:

(B) NO FUNDS MADE AVAILABLE BY THE CORPORATION UNDER THIS SUBCHAPTER, EITHER BY GRANT OR CONTRACT, MAY BE USED--

(6) TO SUPPORT OR CONDUCT TRAINING PROGRAMS FOR THE PURPOSE OF ADVOCATING PARTICULAR PUBLIC POLICIES OR ENCOURAGING POLITICAL ACTIVITIES, LABOR OR ANTILABOR ACTIVITIES, BOYCOTTS, PICKETING, STRIKES AND DEMONSTRATIONS, AS DISTINGUISHED FROM THE DISSEMINATION OF INFORMATION ABOUT SUCH POLICIES OR ACTIVITIES, EXCEPT THAT THIS PROVISION SHALL NOT BE CONSTRUED TO PROHIBIT THE TRAINING OF ATTORNEYS OR PARALEGAL PERSONNEL NECESSARY TO PREPARE THEM TO PROVIDE ADEQUATE LEGAL ASSISTANCE TO ELIGIBLE CLIENTS;

THIS PROVISION RESTRICTS GRANTEES AND CONTRACTORS FROM USING FUNDS PROVIDED BY THE CORPORATION TO SUPPORT OR CONDUCT TRAINING PROGRAMS FOR THE PURPOSES OF ADVOCATING PARTICULAR PUBLIC POLICIES OR ENCOURAGING POLITICAL ACTIVITIES AS DISTINGUISHED FROM THE DISSEMINATION OF INFORMATION ABOUT SUCH POLICIES OR ACTIVITIES.

THE LEGISLATIVE HISTORY CONTAINED IN THE HOUSE COMMITTEE ON EDUCATION AND LABOR REPORT TO ACCOMPANY H.R. 7824, THE LEGAL SERVICES CORPORATION ACT OF 1974 (H. REP. 93-247, 93RD CONG., 1ST SESS. 11) IS INSTRUCTIVE REGARDING THE INTENT OF CONGRESS CONCERNING THIS PROVISION. THE SECTION-BY-SECTION ANALYSIS EXPLAINS THE PROVISION AS FOLLOWS:

THE COMMITTEE WOULD LIKE TO ASSURE THAT THE LEGAL SERVICES PROVIDED TO ELIGIBLE CLIENTS ARE OF THE HIGHEST QUALITY. ALTHOUGH A RECIPIENT, THEREFORE, SHOULD BE FUNDED TO CARRY OUT AN APPROPRIATE TRAINING PROGRAM, THE COMMITTEE EXPECTS THAT NO GRANTEE-- UNDER THE GUISE OF FULFILLING PROGRAM TRAINING FUNCTIONS-- WILL ADVOCATE ANY POLITICAL ACTION INCLUDING, BUT NOT LIMITED TO, BOYCOTT, DEMONSTRATIONS, STRIKES OR PICKETING. TRAINING PROGRAMS SHOULD SEEK TO FULLY INFORM ATTORNEYS AND THEIR CLIENTS ABOUT INDIGENTS' LEGAL RIGHTS AND HOW SUCH RIGHTS CAN BE IMPLEMENTED, BUT THE TRAINING SESSIONS SHOULD NOT BE ORGANIZED TO ADVOCATE PARTICULAR POLITICAL ACTIONS. MOREOVER, WHILE INFORMATION IS DISSEMINATED ABOUT PUBLIC POLICIES THAT AFFECT POOR PEOPLE'S LIVES, AND WHILE TRAINING PROGRAMS SHOULD SET FORTH RELEVANT INFORMATION CONCERNING ALTERNATIVE MEANS THAT CAN BE UTILIZED TO ENFORCE POOR PEOPLE'S RIGHTS, THE TRAINING SESSIONS SHOULD NOT BE ORGANIZED TO ADVOCATE ANY PARTICULAR POLITICAL ACTION. THE PROVISION, SETTING FORTH THE RESPONSIBILITIES OF TRAINING PROGRAMS, IS NOT INTENDED TO PROHIBIT ATTORNEYS, WHO ARE PAID FOR BY CORPORATION FUNDS, FROM PROVIDING LEGAL ADVICE TO ELIGIBLE CLIENTS AND THEIR ORGANIZATIONS.

IT IS CLEAR FROM THE LEGISLATIVE HISTORY THAT GRANTEES AND CONTRACTORS ARE RESTRICTED FROM USING FUNDS PROVIDED BY THE CORPORATION FOR TRAINING PROGRAMS THAT ADVOCATE PARTICULAR PUBLIC POLICIES OR ENCOURAGE POLITICAL ACTIVITIES, BUT ARE ALLOWED TO PROVIDE INFORMATION ABOUT PUBLIC POLICIES AND HOW THEY MAY AFFECT CLIENTS. DURING TRAINING PROGRAMS FOR ATTORNEYS AND OTHER STAFF PERSONNEL, GRANTEES AND CONTRACTORS MAY LEGITIMATELY DISSEMINATE INFORMATION ABOUT SUCH PUBLIC POLICIES THAT IMPACT ON POOR PEOPLE AND DISCUSS LEGAL REMEDIES THAT MAY BE ATTEMPTED ON BEHALF OF SUCH CLIENTS. HOWEVER, THEY ARE PROHIBITED FROM ADVOCATING SPECIFIC PUBLIC POLICIES OR URGING THE USE OF POLITICAL ACTIVITIES IN CONNECTION WITH TRAINING PROGRAMS. GRANTEES AND CONTRACTORS MAY NEITHER DIRECTLY CONDUCT SUCH TRAINING PROGRAMS NOR PROVIDE SUPPORT TO OTHER ORGANIZATIONS THAT ARE CONDUCTING SUCH PROGRAMS WHERE SUCH SUPPORT INVOLVES THE USE OF FUNDS PROVIDED BY THE CORPORATION.

THE JANUARY 1981 DENVER REGIONAL PROJECT DIRECTORS MEETING WAS AN OFFICIAL CORPORATION SPONSORED TRAINING FUNCTION. NUMEROUS GRANTEE ORGANIZATIONS WITHIN THE BOUNDARIES OF THE MULTI-STATE DENVER REGION, AND SOME FROM WITHOUT, SENT REPRESENTATIVES TO THE SESSION AND PAID THEIR SALARIES, TRAVEL AND TRANSPORTATION EXPENSES FROM FUNDS PROVIDED BY THE CORPORATION. A MEETING AGENDA AND PARTICIPANTS' LIST WAS PUBLISHED WHICH WE ASSUME WAS PROVIDED TO PARTICIPANTS IN ADVANCE (SEE APPENDIX II). (APPENDIX II IS EXCLUDED FROM THIS PUBLICATION BUT AVAILABLE UPON REQUEST TO THE GENERAL ACCOUNTING OFFICE.) THE AGENDA CHARACTERIZED MANY OF THE PRESENTATIONS IN SUCH DESCRIPTIVE TERMS AS TO PUT PARTICIPANTS ON NOTICE THAT THE PRESENTATIONS WOULD ALMOST SURELY CONSTITUTE VIOLATIONS OF STATUTORY RESTRICTIONS ON THE USE OF CORPORATE FUNDS. FOR EXAMPLE, SOME OF THE PRESENTATIONS BY GRANTEES WERE LISTED AS: "MOBILIZATION AND COALITION BUILDING CASE STUDIES-- THE CALIFORNIA PROP. 9 AND OREGON EXPERIENCES"; STRATEGY WORKSHOPS IN NETWORK BUILDING SKILLS"; "CLIENT AND COMMUNITY ORGANIZATION NETWORKING"; AND "MOBILIZATION AND COALITION BUILDING." DURING THE SESSION, SPEAKERS FROM THE CORPORATION AND GRANTEE ORGANIZATIONS ADVOCATED PARTICULAR PUBLIC POLICIES AND ENCOURAGED POLITICAL ACTIVITIES. SOME SPEAKERS ADVOCATED A POLICY OF RESISTANCE TO REAGAN ADMINISTRATION-ANNOUNCED OBJECTIVES TO REDUCE THE BUDGET FOR, AND SCALE DOWN, ALL SOCIAL BENEFIT PROGRAMS. FOR EXAMPLE, MR. HOUSEMAN DESCRIBED THE NATURE OF THE THREAT BY STATING:

WHAT IS AT STAKE IS NOT SOLEY THE SURVIVAL OF THE LEGAL SERVICES PROGRAM. WHAT IS AT STAKE IS THE SURVIVAL OF MANY SOCIAL BENEFITS-- ENTITLEMENT PROGRAMS THAT WE STRUGGLED, SINCE 1965, TO MAKE REAL FOR POOR PEOPLE. WE HAVE STRUGGLED SINCE 1965 TO BRING INTO THE BELT FEDERAL, STATE AND LOCAL BENEFITS. WHAT IS AT STAKE IS A NUMBER OF OTHER KINDS OR PROGRAMS LIKE AFFIRMATIVE ACTION, CIVIL RIGHTS PROGRAMS. THAT, IN THE END, IS WHAT IS AT STAKE IN THIS BATTLE. THOSE, IN THE END, ARE FAR MORE IMPORTANT THAN LEGAL SERVICES. LEGAL SERVICES IS A TOOL TO GET THEM. BOTH OF THOSE KINDS OF THINGS, BOTH OF THOSE PROBLEMS-- LEGAL SERVICES, SOCIAL BENEFITS, ENTITLEMENT PROGRAMS, CIVIL RIGHTS. THOSE ARE WHAT ARE AT STAKE IN THIS BATTLE.

DON WHARTON STATED THAT HIS GROUP DECIDED THAT IT WOULD BE A KIND OF MALPRACTICE IF HIS GRANTEE ORGANIZATION FAILED TO FIGHT FOR ALL THOSE PROGRAMS OF SOCIAL BENEFITS THAT PEOPLE HAD WORKED SO HARD FOR OVER THE PAST DECADE. MR. HOUSEMAN'S PRESENTATION WAS ENTITLED "STRATEGIES FOR THE FUTURE" AND ADVOCATED A POLICY THAT THE BUDGET, STRUCTURE AND AUTHORITY OF THE LEGAL SERVICES CORPORATION BE PRESERVED AT THEN CURRENT, OR NEAR THEN CURRENT, LEVELS IN THE FACE OF THE THREAT THAT THE REAGAN ADMINISTRATION MIGHT ADOPT A POLICY TO SIGNIFICANTLY REDUCE THE BUDGET AND CURTAIL THE OPERATIONS OF THE CORPORATION. MR. HOUSEMAN ANALYZED SPECIFIC PROPOSALS THAT MIGHT BE ADOPTED BY THE REAGAN ADMINISTRATION AND DISCUSSED SOME COUNTER STRATEGIES. HE POINTED OUT REAGAN COULD APPOINT MANY NEW DIRECTORS TO LSC'S BOARD WHO MIGHT BE HOSTILE TO AGGRESSIVE LEGAL SERVICES AND THE STAFF ATTORNEY SYSTEM. THE COUNTER STRATEGY WAS TO ATTEMPT TO PERSUADE MODERATE REAGAN SUPPORTERS SUCH AS FORMER SENATOR ED BROOKE TO APPLY FOR APPOINTMENT TO THE LSC BOARD. MR. HOUSEMAN ALSO ANTICIPATED OPPONENTS WOULD ATTEMPT TO IMPOSE ADDITIONAL RESTRICTIONS ON LEGISLATIVE REPRESENTATION AND CASES THAT INVOLVE SUITS AGAINST THE GOVERNMENT, ALIENS, EDUCATION AND ABORTION. HE ANTICIPATED MAJOR EFFORTS TO ELIMINATE THE NATIONAL AND STATE SUPPORT CENTER SYSTEM AND RECOVERY OF ATTORNEYS' FEES IN SUITS AGAINST THE GOVERNMENT. HIS COUNTER TO THESE THREATS WAS TO ESTABLISH A MASSIVE NATIONWIDE GRASS ROOTS LOBBYING EFFORT IN ORDER TO INFLUENCE CONGRESS TO VOTE AGAINST ANY LEGISLATION DESIGNED TO IMPLEMENT ANY OF THESE MEASURES. MOST OF THE SPEAKERS ENCOURAGED THOSE IN ATTENDANCE TO ENGAGE IN POLITICAL ACTIVITIES. THESE ACTIVITIES INCLUDED BUILDING COALITIONS AND NETWORKS WITH OTHER ORGANIZATIONS WITH SHARED INTERESTS, SUCH AS ELDERLY GROUPS, PRIVATE ATTORNEYS, LEAGUE OF WOMEN VOTERS CHAPTERS, LABOR UNIONS, CHURCH GROUPS AND COMMUNITY ORGANIZATIONS TO ESTABLISH A GRASS ROOTS LOBBYING CAMPAIGN TO LOBBY CONGRESS IN SUPPORT OF LEGAL SERVICES AND OTHER SOCIAL BENEFIT AND ENTITLEMENT PROGRAMS AND IN OPPOSITION TO REAGAN ADMINISTRATION PROPOSALS TO CURTAIL THESE PROGRAMS. FOR EXAMPLE, MR. WHARTON TOLD GRANTEES THAT THEY WERE IN A POLITICAL CAMPAIGN AND URGED THEM TO BUILD COALITIONS WITH GROUPS SUCH AS UNIONS, ATTORNEYS AND MINORITY GROUPS TO BE EFFECTIVE. FOR ANOTHER EXAMPLE, JEANNE CONNOLLY URGED 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. SHE ALSO SUGGESTED THAT GRANTEES DESIGNATE A STAFF PERSON TO WRITE LETTERS FOR OUTSIDE COMMUNITY ORGANIZATIONS AND AGENCIES TO SEND TO MEMBERS OF CONGRESS REQUESTING THEIR SUPPORT FOR THE PROGRAM. WE CITE THIS AS AN EXAMPLE OF POLITICAL ACTIVITIES PROHIBITED BY THE TRAINING PROHIBITION IN 42 U.S.C. 2996FB)(6). HOWEVER, SUCH ACTIVITY MAY VIOLATE ANTILOBBYING PROVISIONS CONTAINED IN 42 U.S.C. 2996EC), APPLICABLE TO THE CORPORATION AND 42 U.S.C. 299FA)(5), APPLICABLE TO GRANTEES, TO THE EXTENT THAT SPECIFIC LEGISLATION WAS PENDING BEFORE THE CONGRESS THAT THEY WERE ATTEMPTING TO INFLUENCE. SEE, FOR EXAMPLE, 60 COMP.GEN. 423, SUPRA.

IN SUM, THE ABOVE ACTIVITY CONSTITUTES A VIOLATION OF THE TRAINING PROHIBITION CONTAINED IN 42 U.S.C. 2996FB)(6) BECAUSE GRANTEE OFFICIALS AT THE DENVER MEETING WERE SUPPORTING AND WERE CONDUCTING A TRAINING PROGRAM FOR THE PURPOSE OF ADVOCATING PARTICULAR PUBLIC POLICIES AND WERE ENCOURAGING GRANTEES TO ENGAGE IN POLITICAL ACTIVITIES. ALTHOUGH CORPORATION OFFICIALS DID NOT TECHNICALLY VIOLATE THIS PROVISION, THEY ARE NOT BLAMELESS FOR REASONS SET FORTH IN THE NEXT SECTION. CORPORATION ENFORCEMENT RESPONSIBILITY

WE SHOULD POINT OUT THAT 42 U.S.C. 2996FB)(6) IS A RESTRICTION ON THE USE OF CORPORATE FUNDS FOR TRAINING ACTIVITIES BY GRANTEES AND CONTRACTORS. THE CORPORATION HAS A RESPONSIBILITY UNDER 42 U.S.C. 2996EB)(1)(A) TO INSURE COMPLIANCE OF RECIPIENTS AND THEIR EMPLOYEES WITH THE PROVISIONS OF THE LEGAL SERVICES CORPORATION ACT OF 1974. THAT SECTION READS AS FOLLOWS:

(1)(A) THE CORPORATION SHALL HAVE AUTHORITY TO INSURE THE COMPLIANCE OF RECIPIENTS AND THEIR EMPLOYEES WITH THE PROVISIONS OF THIS SUBCHAPTER AND THE RULES, REGULATIONS, AND GUIDELINES PROMULGATED PURSUANT TO THIS SUBCHAPTER, AND TO TERMINATE, AFTER A HEARING IN ACCORDANCE WITH SECTION 2996J OF THIS TITLE, FINANCIAL SUPPORT TO A RECIPIENT WHICH FAILS TO COMPLY.

THIS PROVISION AUTHORIZED THE CORPORATION TO ENFORCE RESTRICTIONS IN THE ACT ON FUND RECIPIENTS. INSTEAD OF CARRYING OUT THIS STATUTORY ENFORCEMENT AUTHORITY, THE CORPORATION ASSUMED A CONTRARY ROLE OF ENCOURAGING GRANTEES TO ENGAGE IN TRAINING ACTIVITIES PROHIBITED BY 42 U.S.C. 2996FB)(6). THE CORPORATION SCHEDULED THE DENVER REGIONAL OFFICE TRAINING SESSION, INVITED RECIPIENTS TO SEND REPRESENTATIVES TO BE TRAINED, ESTABLISHED THE AGENDA TO PRESENT MATERIAL ON THE LSC SURVIVAL PLAN AND ARRANGED FOR HIGH LEVEL CORPORATE OFFICIALS AND GRANTEE REPRESENTATIVES FROM OTHER REGIONS TO MAKE PRESENTATIONS THAT IN CERTAIN CASES ADVOCATED ACTIVITIES THAT VIOLATED PROVISIONS OF THE ACT. IT SHOULD ALSO BE NOTED THAT EVEN APART FROM SUBSECTION (1)(A), EVERY GRANTING AGENCY HAS AN AFFIRMATIVE DUTY TO INSURE THAT ITS GRANTEES DO NOT EXPEND GRANT FUNDS FOR UNALLOWABLE PURPOSES.

THE CORPORATE OFFICIALS AND GRANTEE REPRESENTATIVES ADVOCATED A PUBLIC POLICY OF FIGHTING THREATENED CUTS IN THE LEGAL SERVICES AND OTHER FEDERAL SOCIAL BENEFIT AND ENTITLEMENT PROGRAMS AND ENCOURAGED PERSONS IN ATTENDANCE TO ENGAGE IN POLITICAL ACTIVITIES INCLUDING THE BUILDING OF NETWORKS AND COALITIONS OF ORGANIZATIONS SO AS TO EFFECTIVELY OPERATE A NATIONWIDE GRASS ROOTS CAMPAIGN TO LOBBY CONGRESS IN SUPPORT OF POLICIES ADVOCATED BY THE CORPORATION. BECAUSE THE CORPORATION ENCOURAGED GRANTEES TO ENGAGE IN ACTIVITIES PROHIBITED BY THE ACT IT WAS IN NO POSITION TO DISCIPLINE GRANTEES FOR THEIR VIOLATIONS BY TAKING THE SANCTION REQUIRED IN 42 U.S.C. 2996EB)(1)(A).

PROHIBITION AGAINST CREATING ORGANIZATIONS

THE PROHIBITION AGAINST THE USE OF APPROPRIATED FUNDS TO CREATE ORGANIZATIONS AND COALITIONS IS CONTAINED IN 42 U.S.C. 2996FB)(7) AND READS AS FOLLOWS:

NO FUNDS MADE AVAILABLE BY THE CORPORATION UNDER THIS SUBCHAPTER, EITHER BY GRANT OR CONTRACT, MAY BE USED--

(7) TO INITIATE THE FORMATION, OR ACT AS AN ORGANIZER, OF ANY ASSOCIATION, FEDERATION, OR SIMILAR ENTITY, EXCEPT THAT THIS PARAGRAPH SHALL NOT BE CONSTRUED TO PROHIBIT THE PROVISION OF LEGAL ASSISTANCE TO ELIGIBLE CLIENTS;

AS WITH THE TRAINING PROHIBITION DISCUSSED ABOVE, THIS PROVISION PROHIBITS GRANTEES AND CONTRACTORS OF THE CORPORATION FROM USING FUNDS PROVIDED BY THE CORPORATION TO ORGANIZE ANY ASSOCIATION, FEDERATION OR SIMILAR ENTITY. HOWEVER, THIS PROVISION IS NOT TO BE INTERPRETED IN A MANNER THAT PROHIBITS ELIGIBLE CLIENTS FROM RECEIVING LEGAL ASSISTANCE.

THE LEGISLATIVE HISTORY OF THIS PROVISION PROVIDES INFORMATION ESSENTIAL TO AN UNDERSTANDING OF THE INTENT BEHIND THE STATUTORY LANGUAGE. ORIGINALLY THE LEGAL SERVICES CORPORATION ACT OF 1974 CONTAINED A MORE DETAILED PROHIBITION AGAINST ESTABLISHING ORGANIZATIONS. IN THE SECTION- BY-SECTION ANALYSIS OF THE HOUSE COMMITTEE ON EDUCATION AND LABOR REPORT TO ACCOMPANY H.R. 7824, THE LEGAL SERVICES CORPORATION ACT OF 1974 (H. REP. 93-247, 93RD CONG., 1ST SESS. 11), THE ORIGINAL PROVISION WAS SET FORTH AND EXPLAINED. THE ANALYSIS STATED THAT FUNDS MADE AVAILABLE BY THE CORPORATION MAY NOT BE USED EITHER BY GRANTEES OR CONTRACTORS:

(5) TO ORGANIZE, TO ASSIST TO ORGANIZE, OR TO ENCOURAGE TO ORGANIZE, OR PLAN FOR, THE CREATION OR FORMATION OF, OR THE STRUCTURING OF, ANY ORGANIZATION, ASSOCIATION, OR COALITION, ALLIANCE, FEDERATION, CONFEDERATION, OR ANY SIMILAR ENTITY, EXCEPT FOR THE PROVISION OF APPROPRIATE LEGAL ASSISTANCE IN ACCORDANCE WITH GUIDELINES PROMULGATED BY THE CORPORATION.

THE COMMITTEES BELIEVES THAT RECIPIENTS AND THEIR EMPLOYEES SHOULD NOT BE PERMITTED TO UTILIZE PROGRAM FUNDS TO ORGANIZE ANY ORGANIZATION, ASSOCIATION, COALITION, ALLIANCE, FEDERATION, CONFEDERATION, OR SIMILAR ENTITY. THE COMMITTEE EXPECTS THAT PURSUANT TO GUIDELINES ISSUED BY THE CORPORATION, RECIPIENTS SHALL PROVIDE APPROPRIATE LEGAL ASSISTANCE TO ELIGIBLE CLIENTS AND ORGANIZATIONS OF ELIGIBLE CLIENTS. RECIPIENTS AND THEIR EMPLOYEES ARE PROHIBITED FROM ORGANIZING A GROUP, BUT SHALL BE PERMITTED TO PREPARE PAPERS OF INCORPORATION AND RENDERED OTHER LEGAL ASSISTANCE AS NECESSARY.

IN 1977, CONGRESS DECIDED TO CLARIFY THE PROHIBITION AND AMENDED THE ORIGINAL PROVISION IN PUBLIC LAW 95-222, 91 STAT. 1619, DECEMBER 28, 1977, TO READ AS IT DOES TODAY. THE HOUSE REPORT NO. 95-310, 95TH CONG., 1ST SESS. 14, THAT ACCOMPANIED THE LEGAL SERVICES CORPORATION ACT AMENDMENTS OF 1977 (H.R. 6666) EXPLAINS THE CLARIFYING AMENDMENT AS FOLLOWS:

THE VAGUE AND OVERLY BROAD LANGUAGE IN CURRENT LAW PROHIBITING THE USE OF CORPORATION FUNDS "TO ASSIST" OR "TO ENCOURAGE" THE ORGANIZATION OF ANY GROUP HAS CAUSED LEGAL SERVICES PROGRAMS TO REFRAIN FROM PROVIDING THE ADVICE AND LEGAL ASSISTANCE CONGRESS INTENDED SHOULD BE AVAILABLE TO CLIENTS WHO ARE ENGAGED IN ORGANIZING ACTIVITIES. THE AMERICAN BAR ASSOCIATION, AMONG OTHERS, HAS CRITICIZED THE PRESENT LAW AS UNCONSTITUTIONALLY VAGUE AND VIOLATIVE OF FIRST AMENDMENT RIGHTS. SECTION 7(B)(7) CURES THIS VAGUENESS. IT PROHIBITS THE USE OF CORPORATION FUNDS FOR DIRECT ORGANIZING ACTIVITIES, BUT PERMITS ADVICE AND LEGAL ASSISTANCE TO CLIENTS WHO MAY THEMSELVES BE ENGAGED IN SUCH ACTIVITIES.

THE COMMITTEE RECOGNIZES A DISTINCTION BETWEEN PROPER ACTIVITIES SUCH AS (1) ASSISTING GROUPS OF POOR PEOPLE TO ORGANIZE BY PROVIDING ADVICE ON MATTERS OF INCORPORATION, BY-LAWS, TAX PROBLEMS AND OTHER MATTERS ESSENTIAL TO THE PLANNING OF AN ORGANIZATION; (2) PROVIDING COUNSEL TO POOR PEOPLE REGARDING APPROPRIATE BEHAVIOR FOR GROUP MEMBERS; AND (3) ENCOURAGING POOR PEOPLE AGGRIEVED BY PARTICULAR PROBLEMS TO CONSIDER ORGANIZING TO FOSTER JOINT SOLUTIONS TO COMMON PROBLEMS ON THE ONE HAND, AND THOSE ACTIVITIES THAT ARE IMPROPER ON THE PART OF LEGAL SERVICES PROGRAMS IN THAT THEY USURP THE RIGHTFUL ROLES OF POOR PEOPLE, AS POTENTIAL MEMBERS OF SUCH ORGANIZATIONS, NAMELY, ACTUALLY INITIATING THE FORMATION OF OR ORGANIZING DIRECTLY, AS ASSOCIATION, GROUP, OR ORGANIZATION.

THE LEGISLATIVE HISTORY MAKES IT PLAIN THAT GRANTEES AND CONTRACTORS MAY NOT USE FUNDS PROVIDED BY THE CORPORATION TO INITIATE THE FORMATION, OR ACT AS ORGANIZER, OF ANY ORGANIZATION, NETWORK OR COALITION. HOWEVER, PROVIDERS OF LEGAL SERVICES MAY GIVE ADVICE TO ELIGIBLE CLIENTS AND ASSIST THEM WITH MATTERS THAT WOULD ENABLE THEM TO PLAN, ESTABLISH AND OPERATE AN ORGANIZATION THAT THE CLIENTS BELIEVE IS IN THEIR BEST INTEREST. FOR EXAMPLE, THIS PROVISION WOULD NOT PROHIBIT A FUND RECIPIENT FROM PROVIDING LEGAL ADVICE NECESSARY TO ESTABLISH A NEIGHBORHOOD DAY CARE CENTER OR A TENANTS' ORGANIZATION WHENEVER SUCH ORGANIZATIONS ARE NEEDED BY CLIENTS FOR THEIR OWN PARTICULAR INTERESTS AND DIRECT BENEFIT. ON THE OTHER HAND, RECIPIENTS SHOULD NOT ACT AS ORGANIZERS OF ORGANIZATIONS ON THE BASIS OF THE RECIPIENTS' PERCEPTION THAT A PARTICULAR ORGANIZATION WOULD BE BENEFICIAL TO CLIENTS AS A CLASS OR TO THE LEGAL SERVICES PROGRAM. ALSO RECIPIENTS SHOULD NOT INITIATE THE FORMATION OF ORGANIZATIONS WHERE THE INITIATING ACTION IS WITH THE RECIPIENTS AND NOT WITH THE CLIENTS. FOR EXAMPLE, THIS PROVISION WOULD PROHIBIT A CORPORATION FUNDED PROVIDER OF LEGAL SERVICES FROM ORGANIZING A GROUP TO CAMPAIGN FOR THE REDUCTION OF DEFENSE SPENDING ON THE THEORY THERE WOULD BE MORE FUNDS AVAILABLE FOR FEDERAL PROGRAMS THAT ASSIST POOR PEOPLE.

ALMOST WITHOUT EXCEPTION, EACH OF THE FIRST-DAY SPEAKERS AT THE DENVER REGIONAL PROJECT DIRECTORS MEETING THAT WE NAMED ABOVE DEVOTED A LARGE PORTION OF TIME TO A DISCUSSION OF COALITION BUILDING AND NETWORKING, WHICH IS THE ESTABLISHMENT OF INFORMAL ORGANIZATIONAL RELATIONSHIPS ON MATTERS OF MUTUAL INTEREST. MS. CONNALLY DESCRIBED THE STATE COORDINATOR SYSTEM THAT THE CORPORATION AND GRANTEES HAD ESTABLISHED IN EACH STATE WHICH SERVED AS A COMMUNICATIONS LINK BETWEEN THE CORPORATION HEADQUARTERS AND AN INFORMAL STATE-WIDE ORGANIZATION OF LEGAL SERVICES PROGRAM SUPPORTERS COMPRISED OF VARIOUS ORGANIZATIONS AND INDIVIDUALS. LEGAL SERVICES GRANTEE ORGANIZATIONS SERVED AS THE CORE OF STATE COALITIONS AND PROVIDED FINANCIAL AND OTHER SUPPORT. MR. HOUSEMAN OUTLINED A PLAN TO ESTABLISH WHAT HE TERMED AS AN "OUTSIDE WASHINGTON LOBBYING ENTITY" THAT HE REFERRED TO AS "ACTION FOR LEGAL RIGHTS." HE STATED THAT THE ORGANIZATION WAS SCHEDULED TO BE FORMALLY INCORPORATED WITHIN THE NEXT WEEK. HE FURTHER INDICATED THAT PLAN CALLED FOR LSC SUPPORT CENTERS (GRANTEE FUND RECIPIENTS) TO BECOME AFFILIATED WITH THE ORGANIZATION, ALONG WITH OUTSIDE ENTITIES SUCH AS MIGRANT FARM WORKERS GROUPS.

MR. RADER DESCRIBED A SUCCESSFUL CAMPAIGN THAT HIS SUPPORT CENTER FUNDED WITH CORPORATION FUNDS IN CALIFORNIA TO DEFEAT PROPOSITION 9, A TAX REDUCTION BALLOT MEASURE. HE MENTIONED THAT HIS PROGRAM HAD HIRED FOUR FIELD COORDINATORS AND BUILT A COALITION FROM ORGANIZATIONS SUCH AS PUBLIC EMPLOYEE UNIONS AND ORGANIZATIONS INTERESTED IN EDUCATION, ELDERLY GROUPS AND VOLUNTARY AGENCY GROUPS. MANY OF THE 30 DIFFERENT CORPORATION FUNDED LEGAL SERVICES PROGRAMS IN CALIFORNIA COMMITTED STAFF TIME TO THE CAMPAIGN AND WERE INVOLVED IN BUILDING THE COALITION OF ORGANIZATIONS INVOLVED IN THE CAMPAIGN TO DEFEAT PROPOSITION 9.

DON WHARTON FROM THE OREGON LEGAL SERVICES PROGRAM EXPLAINED THAT THE CORPORATION FUND RECIPIENTS IN HIS STATE WERE WELL ON THEIR WAY TO BUILDING A STATE-WIDE COALITION DEDICATED TO THE SURVIVAL OF LEGAL SERVICES. OREGON LEGAL SERVICES PROGRAMS HAD ASSIGNED STAFF MEMBERS TO PERFORM LIAISON FUNCTIONS WITH ORGANIZATIONS COMPRISING THE COALITION. THE STATE-WIDE COORDINATOR, A LEGAL SERVICES PROGRAM DEPUTY DIRECTOR, WAS RESPONSIBLE FOR COORDINATING THE ACTIVITIES OF THESE STAFF PERSONS. LOCAL PROGRAMS WERE PROVIDING FUNDS TO PAY THE SALARY OF A NEWLY HIRED MEDIA AND MATERIALS PERSON WHOSE EFFORTS WERE DEVOTED TO THE COALITION.

THESE REMARKS BY THE ABOVE-NAMED SPEAKERS REVEAL THAT A LARGE NUMBER OF LEGAL SERVICES RECIPIENTS WERE EXPENDING FUNDS PROVIDED BY THE CORPORATION ON ORGANIZING ENTITIES SUCH AS COALITIONS AND NETWORKS IN CONNECTION WITH THE LEGAL SERVICES SURVIVAL PROGRAM. THESE ORGANIZING ACTIVITIES WERE INITIATED AND CONDUCTED BY FUND RECIPIENTS THEMSELVES RATHER THAN IN THE COURSE OF PROVIDING A DIRECT LEGAL SERVICE TO CLIENTS. IN OUR OPINION, SUCH ACTIVITIES BY LSC FUND RECIPIENTS VIOLATED THE PROHIBITION CONTAINED IN 42 U.S.C. 2996FB)(7) AGAINST THE USE OF FUNDS PROVIDED BY THE CORPORATION TO FORM ORGANIZATIONS. HERE AGAIN, THE CORPORATION AVOIDED ITS RESPONSIBILITIES UNDER 42 U.S.C. 2996EB)(1) TO INSURE THE COMPLIANCE OF RECIPIENTS AND THEIR EMPLOYEES WITH THE PROVISION OF THE LEGAL SERVICES CORPORATION ACT OF 1974 AND INSTEAD ENCOURAGED GRANTEES TO ENGAGE IN THE PROHIBITED ACTIVITIES.

PROHIBITION AGAINST ADVOCATING OR OPPOSING BALLOT MEASURES

THE PROHIBITION AGAINST THE USE OF APPROPRIATED FUNDS TO ADVOCATE OR OPPOSE ANY BALLOT MEASURES, INITIATIVES OR REFERENDUMS IS CONTAINED IN 42 U.S.C. 2996ED)(4) AND READS AS FOLLOWS:

(4) NEITHER THE CORPORATION NOR ANY RECIPIENT SHALL CONTRIBUTE OR MAKE AVAILABLE CORPORATE FUNDS OR PROGRAM PERSONNEL OR EQUIPMENT FOR USE IN ADVOCATING OR OPPOSING ANY BALLOT MEASURES, INITIATIVES, OR REFERENDUMS. HOWEVER, AN ATTORNEY MAY PROVIDE LEGAL ADVICE AND REPRESENTATION AS AN ATTORNEY TO ANY ELIGIBLE CLIENT WITH RESPECT TO SUCH CLIENT'S LEGAL RIGHTS.

THIS PROVISION RESTRICTS THE CORPORATION AND ITS FUND RECIPIENTS FROM MAKING USE OF CORPORATE FUNDS OR ANY PERSONNEL OR EQUIPMENT BELONGING TO ANY LSC PROGRAM ORGANIZATION TO SUPPORT, ADVOCATE, OPPOSE, OR URGE THE DEFEAT OF ANY BALLOT MEASURES, INITIATIVES, OR REFERENDUMS AT THE STATE, LOCAL OR NATIONAL LEVELS OF GOVERNMENT. ON THE OTHER HAND, A PROGRAM ATTORNEY IS FREE TO PROVIDE ADVICE AND REPRESENTATION, AS AN ATTORNEY, TO AN ELIGIBLE CLIENT WITH RESPECT TO SUCH CLIENT'S LEGAL RIGHTS.

A REVIEW OF THE LEGISLATIVE HISTORY OF THIS PROVISION DOES NOT SHED MUCH LIGHT ON WHAT CONGRESS INTENDED BEYOND THE PLAIN MEANING OF THE LANGUAGE OF THE SECTION. THE CONFERENCE REPORT OF THE LEGAL SERVICES CORPORATION ACT OF 1974 (S. REP. 93-845, 93RD CONG. 2D SESS. 22) MAKES THE FOLLOWING COMMENTS CONCERNING THIS PROVISION:

THE HOUSE BILL AND THE SENATE AMENDMENT PROHIBITED THE CORPORATION AND ANY RECIPIENT FROM MAKING AVAILABLE CORPORATE FUNDS, PROGRAM PERSONNEL, OR EQUIPMENT FOR USE IN ADVOCATING OR OPPOSING BALLOT MEASURES, REFERENDUMS, OR INITIATIVES. THE SENATE AMENDMENT CONTAINED AN EXCEPTION TO THIS PROHIBITION WHERE SUCH PROVISION OF LEGAL ADVICE AND REPRESENTATION IS NECESSARY BY AN ATTORNEY, AS AN ATTORNEY, FOR ANY ELIGIBLE CLIENT WITH RESPECT TO SUCH CLIENT'S LEGAL RIGHTS AND REPRESENTATION. THE HOUSE BILL CONTAINED NO COMPARABLE PROVISION. THE CONFERENCE AGREEMENT PROHIBITS ADVOCATING OR OPPOSING SUCH MEASURES, BUT PROVIDES THAT AN ATTORNEY MAY PROVIDE LEGAL ADVICE AND REPRESENTATION AS AN ATTORNEY TO ANY ELIGIBLE CLIENT WITH RESPECT TO SUCH CLIENT'S LEGAL RIGHT. WHILE THE PROHIBITION ELEMENT OF THE PROVISION IS ENTIRELY CLEAR, IT MIGHT BE HELPFUL TO OFFER OUR INTERPRETATION OF THE SCOPE OF THE EXCEPTION. UNDER THE EXCEPTION, A PROGRAM ATTORNEY IS AUTHORIZED TO PROVIDE LEGAL ADVICE AND REPRESENTATION, AS AN ATTORNEY, WITH RESPECT TO SUCH CLIENT'S LEGAL RIGHTS. THE WORDS "AS AN ATTORNEY" ARE SIGNIFICANT BECAUSE THIS RESTRICTION LIMITS THE ATTORNEY'S ROLE TO THAT OF PROTECTING THE CLIENT'S RIGHTS AND NOT OF SERVING AS A CAMPAIGN MANAGER, PUBLIC RELATIONS ADVISOR OR MAJOR CONTRIBUTOR. PERSONS DESIRING TO OFFER A BALLOT MEASURE NEED LEGAL ADVICE TO KNOW WHAT LEGAL RIGHTS THEY HAVE UNDER THE LAW OF THE JURISDICTION IN WHICH THEY ARE LOCATED. ACCORDINGLY, A PROGRAM ATTORNEY IS AUTHORIZED TO PROVIDE ELIGIBLE CLIENTS WITH ADVICE CONCERNING THEIR LEGAL RIGHTS TO OFFER BALLOT MEASURES. SUCH ADVICE WOULD NORMALLY CONTAIN INFORMATION ON THE REQUIREMENTS OF LAW THAT THE CLIENT MUST SATISFY. FOR EXAMPLE, THERE IS A GENERAL REQUIREMENT THAT BALLOT MEASURES BE CIRCULATED AMONG RESIDENTS OR REGISTERED VOTERS OF THE JURISDICTION IN THE FORM OF A PETITION TO OBTAIN A CERTAIN NUMBER OF SIGNATURES IN ORDER TO HAVE IT PLACED ON THE BALLOT. OPPONENTS OF A MEASURE FREQUENTLY ALLEGE SOME DEFECTS) IN THE PETITION, SUCH AS IRREGULARITIES WITH THE QUALIFICATIONS OF THOSE SIGNING THE PETITION. CONSEQUENTLY, THE MATTER MAY BECOME THE SUBJECT OF LITIGATION. A PROGRAM ATTORNEY, AS AS ATTORNEY, MAY REPRESENT AN ELIGIBLE CLIENT WHO IS SPONSORING OR OPPOSING A BALLOT MEASURE WHERE THE CLIENT'S LEGAL RIGHTS TO OFFER OR OPPOSE THE PETITION ARE AT STAKE.

ON THE OTHER HAND, WE THINK THAT A PROGRAM ATTORNEY WOULD BE PRECLUDED BY THE ABOVE PROHIBITION FROM PROVIDING ANY ASSISTANCE IN THE FORM OF CORPORATE FUNDS OR PROGRAM PERSONNEL AND EQUIPMENT TO A CLIENT WAGING A CAMPAIGN IN SUPPORT OF, OR IN OPPOSITION TO, A BALLOT MEASURE THAT IS ALREADY ON THE BALLOT AND BEFORE THE VOTERS. IN THIS SITUATION, THE CLIENT'S RIGHTS TO OFFER OR OPPOSE A MEASURE ARE NOT AT ISSUE SO AS TO REQUIRE THE REPRESENTATION OF AN ATTORNEY.

PRIOR TO LAUNCHING THE CAMPAIGN AGAINST PROPOSITION 9, MR. RADER DRAFTED A LEGAL MEMORANDUM CONSTRUING 42 U.S.C. 2996ED)(4) AS ALLOWING PROGRAM ATTORNEYS TO ENGAGE IN A BALLOT MEASURE CAMPAIGN SO LONG AS THEY ARE REPRESENTING AN ELIGIBLE CLIENT. MR. RADER ARGUED THAT THE BALLOT MEASURE RESTRICTION SHOULD BE CONSTRUED IN THE SAME MANNER AS THE RESTRICTION ON LEGISLATIVE ADVOCACY CONTAINED IN 42 U.S.C. 2996F. MR. RADER ALSO ARGUED THAT THE PROVISION REQUIRING "REPRESENTATION AS AN ATTORNEY" IN 42 U.S.C. 2996ED)(4) CONCERNING BALLOT MEASURES SHOULD BE CONSIDERED TO BE AMENDED BY IMPLICATION, INASMUCH AS A SIMILARLY WORDED PROVISION IN 42 U.S.C. 2996(A)(5) WAS AMENDED BY CONGRESS IN 1977 TO READ "REPRESENTATION BY AN EMPLOYEE OF A RECIPIENT." THEREFORE, ACCORDING TO MR. RADER, LEGISLATIVE ADVOCACY ACTIVITIES COULD BE PERFORMED BY NON-ATTORNEY EMPLOYEES OF RECIPIENTS.

WE ARE NOT PERSUADED BY MR. RADER'S ARGUMENTS. SECTION 2996ED)(4) OF 42 U.S.C. IS A BLANKET PROHIBITION ON BOTH THE CORPORATION AND RECIPIENTS WHICH IS A MUCH BROADER PROHIBITION AGAINST BALLOT MEASURES THAN IS THE ONE AGAINST LEGISLATIVE ADVOCACY CONTAINED IN 42 U.S.C. 2996FA)(5) WHICH AFFECTS ONLY ACTIVITIES OF FUND RECIPIENTS AND INCLUDES SEVERAL EXCEPTIONS. ALSO, TO BE EFFECTIVE, AN AMENDMENT OF A PROVISION MUST BE EXPRESS. AMENDMENTS BY IMPLICATION, LIKE REPEALS BY IMPLICATION, ARE NOT FAVORED IN THE LAW, AND GENERALLY WILL NOT BE UPHELD BY THE COURTS IN DOUBTFUL CASES. THE CONGRESS IS GENERALLY NOT HELD TO HAVE CHANGED A PROVISION IT DID NOT HAVE UNDER CONSIDERATION WHILE ENACTING THE AMENDMENT, UNLESS THE TERMS OF THE AMENDMENT ARE SO INCONSISTENT WITH THE PROVISIONS OF THE PRIOR LAW THAT THEY CANNOT STAND TOGETHER. SEE 1A SUTHERLAND, STATUTORY CONSTRUCTION (4TH ED. 139 140, CITING CASES).

IN OUR OPINION, BASED ON MR. RADER'S DESCRIPTION, THE CORPORATION, THE WESTERN CENTER ON LAW AND POVERTY AND CERTAIN OTHER UNIDENTIFIED CALIFORNIA LEGAL SERVICES GRANTEES VIOLATED THE PROVISION OF 42 U.S.C. 2996ED)(4) IN PROVIDING FUNDS AND PERSONNEL SUPPORT FOR THE PROPOSITION 9 TASK FORCE THAT OPERATED A LARGE SCALE OPPOSITION CAMPAIGN TO THE PROPOSITION 9 BALLOT MEASURE DURING THE FIRST HALF OF CALENDAR YEAR 1980. MR. RADER IN THIS CAMPAIGN AGAINST PROPOSITION 9 EXPENDED FUNDS MADE AVAILABLE BY THE CORPORATION. HE OBTAINED A "SPECIAL NEEDS" GRANT FROM THE CORPORATION FOR THE PROPOSITION 9 TASK FORCE IN THE AMOUNT OF $61,655 AND ALSO OBTAINED STAFF COMMITMENTS FROM APPROXIMATELY 30 CALIFORNIA LEGAL SERVICES PROGRAMS FUNDED BY THE CORPORATION. THE COST OF THESE STAFF COMMITMENTS IS UNKNOWN AND WOULD BE VERY DIFFICULT TO COMPUTE, CONSIDERING THE LAPSED TIME. HOWEVER, WE KNOW THAT THE CAMPAIGN LASTED APPROXIMATELY 3 MONTHS AND THAT MANY STAFF PERSONS AT FIELD OFFICES THROUGHOUT CALIFORNIA DEVOTED AT LEAST HALF THEIR TIME TO THE CAMPAIGN. WITH THE GRANT, ACCORDING TO MR. RADER, THE TASK FORCE HIRED 4 COORDINATORS WHO HAD EXPERIENCE WORKING WITH POOR PEOPLE AND IN POLITICAL CAMPAIGNS. FUNDS WERE ALSO EXPENDED ON CLERICAL STAFF, TRAVEL, PRINTING AND POSTAGE ASSOCIATED WITH CAMPAIGN ACTIVITIES. THE TASK FORCE ASSEMBLED A COALITION OF ORGANIZATIONS, TRAINED THEIR MEMBERS ON THE ISSUES INVOLVED IN OPPOSING PROPOSITION 9, AND IN VOTER REGISTRATION AND IN GET-OUT-THE-VOTE TECHNIQUES. THE TASK FORCE ACTIVITIES DESCRIBED BY MR. RADER WERE THE PRECISE SORT OF ACTIVITIES THAT ARE PROHIBITED BY THE STATUTE'S INJUNCTION AGAINST USING CORPORATE FUNDS TO OPPOSE A BALLOT MEASURE THAT IS ALREADY ON THE BALLOT AND WHERE CLIENT'S LEGAL RIGHTS ARE NOT AT ISSUE.

SUMMARY

IN SUMMARY, WE WISH TO POINT OUT THAT WE HAVE NOT MADE A THOROUGH REVIEW OF ALL THE LSC DOCUMENTS PROVIDED US BY YOUR OFFICE CONCERNING THE LSC SURVIVAL CAMPAIGN. THEREFORE, WE ARE UNABLE TO DETERMINE WHETHER THE JANUARY 1981 DENVER REGIONAL PROJECT DIRECTORS MEETING IS REPRESENTATIVE OF LSC ACTIVITIES DURING THE PERIOD IN QUESTION. INDEED, WE SELECTED THE MATERIAL ON THIS TRAINING SESSION BECAUSE IT APPEARED TO CONTAIN EVIDENCE INDICATING VIOLATIONS OF THE STATUTORY PROHIBITIONS, THAT YOU CITED IN YOUR REQUEST, BY LSC FUND RECIPIENTS. AFTER REVIEWING THE TRAINING SESSION MATERIAL, WE DETERMINED THAT CERTAIN LSC FUND RECIPIENTS HAD VIOLATED THESE STATUTORY PROHIBITIONS, AS HAS BEEN DESCRIBED ABOVE.

ALTHOUGH APPROPRIATED FUNDS WERE EXPENDED BY THESE FUND RECIPIENTS CONTRARY TO LAW, WE ARE OF THE OPINION THAT THE GOVERNMENT WOULD BE UNABLE TO RECOVER THE ILLEGALLY EXPENDED SUMS FROM THE RECIPIENTS. IN EACH INSTANCE THE CORPORATION AUTHORIZED AND ENCOURAGED FUND RECIPIENTS TO MAKE THE EXPENDITURES. BY SEPARATE CORRESPONDENCE, WE ARE RECOMMENDING THAT THE CORPORATION TAKE APPROPRIATE ACTION TO AMEND ITS REGULATIONS GOVERNING THE ACTIVITIES OF FUND RECIPIENTS AND CORPORATION OFFICIALS IN ORDER TO PROHIBIT SUCH EXPENDITURES IN THE FUTURE.

IN ACCORDANCE WITH YOUR REQUEST, WE ARE CONTINUING OUR WORK ON THE OVERALL INVESTIGATION OF THE LSC SURVIVAL CAMPAIGN AND MEMBERS OF OUR STAFF WILL CONTACT YOUR OFFICE FROM TIME TO TIME TO DISCUSS THIS PROJECT.