Nonprofit Legal Services Corporation Lives Large on Taxpayer Dollars

Published January 1, 2007

Free legal help is getting more expensive for taxpayers, and much of the money is going to waste.

The Legal Services Corporation (LSC), which received $330.8 million in federal funding in fiscal 2006, distributes money to 138 local nonprofit legal aid organizations across the country to help provide free legal services for the indigent. However, the Associated Press reported in September that audits from the group’s internal inspector general, Kirt West, identified questionable spending practices among LSC board members.

According to West, “Our review found spending practices that may appear excessive and inappropriate to LSC’s status as a federally funded, nonprofit corporation, particularly in light of its mission in distributing taxpayer dollars to fund legal services for the poor.”

The reports noted the LSC may be overpaying on its plush K Street headquarters by as much as $1.8 million on rent and $7 million on unneeded space in its 10-year lease.

Luxury Meeting Places

On top of that, board members do not even use the LSC office for meetings in Washington, DC. The board meets at the luxurious Melrose Hotel, several blocks from the headquarters, because the board wants “convenience to their rooms” and doesn’t want to “feel confined,” according to West.

They also claim the LSC space is too small to accommodate all board meeting attendees. However, West says the headquarters’ meeting room is slightly larger than the room used at the hotel.

Meal charges at the hotel have included a $59 three-entrĂ©e buffet, $28 deli buffet, and $14 “Death by Chocolate” desserts that LSC clients could only dream about.

Board members even voted to make their meal allowance 200 percent higher than the allowance they give employees who may charge meals to the LSC for business purposes.

Questionable Spending

The board’s refusal to meet at LSC headquarters has meant charges from $20,145 to $55,125 in locales from Washington, DC to San Juan, Puerto Rico. Other questionable expenditures and activities included:

  • $200 for a taxi ride in Ireland;
  • $423.99 for brief trips around Washington, DC by hiring a driver and car for a day instead of taking cabs;
  • improperly approved taxpayer-financed expenses for outside activities; and
  • first- and business-class upgrades on airfare without the required advance approval.

While board members are living the high life, the LSC has reported turning away half of its underprivileged applicants for lack of resources. In the past, the Government Accountability Office has caught the LSC inflating the number of cases it works, so the proportion of applicants refused help may be even higher.

Shoot-the-Messenger Mentality

In April 2006, with examples of unseemly behavior piling up, board members met (over meals costing $8,726) to discuss firing the inspector general. When members of Congress caught wind of the board’s plans, they sent a letter to the board’s chairman warning them not to shoot the messenger.

Later, at Congressional hearings, the board denied wanting to fire West, but transcripts of the meeting proved otherwise, further reducing the board’s credibility.

The LSC is no stranger to controversy. In the past, LSC grantees have challenged states’ abortion restrictions, defended illegal immigrants charged with serious crimes, sued states to pay for sex-change operations, and fought to give alcoholics and drug addicts Social Security Disability Insurance benefits.

Grantees also have engaged in political advocacy, against the orders of Congress.

Alexa Moutevelis ([email protected]) is media associate at Citizens Against Government Waste. This article appeared in CAGW’s October 2006 Wastewatcher report. Used by permission.