Board Meeting Transcripts 2004

BOARD MEMBERS PRESENT: 
Frank B. Strickland, Chair 
Lillian R. BeVier, Vice Chair 
Thomas A. Fuentes 
Robert J. Dieter 
Herbert S. Garten 
Thomas R. Meites 
Maria Luisa Mercado 
David Hall 
Michael D. McKay 
Florentino Subia

STAFF AND PUBLIC PRESENT:
Helaine M. Barnett, President
Victor M. Fortuno, Vice President for Legal Affairs
David L. Richardson, Treasurer & Comptroller
Randi Youells, Vice President for Programs
John Eidleman, Acting Vice President for Compliance and Administration
Leonard Koczur, Acting Inspector General
Laurie Tarantowicz, Assistant Inspector General and Legal Counsel
David Maddox, Assistant Inspector General for Resource Management
Alice Dickerson, Director, Office of Human Resources
Mattie C. Condray, Senior Assistant General Counsel
Patricia Hanrahan, Special Counsel to the Vice President for Programs
Michael Genz
Cynthia Schneider, Senior Program Counsel, Office of Program Performance
Lisa Rosenberg
Jeanne Charn, Director, Bellow-Sacks Access to Civil Legal Services Project
Lillian Johnson, Executive Director, Community Legal Services
Alan Houseman, Executive Director, Center for Law and Social Policy
Colline Meek, Executive Director, Oklahoma Indian Legal Services
Lillian May
Bill O. Whitehurst
Don Saunders, Director of Civil Legal Services,
National Legal Aid and Defenders Association
Pat Batie, Assistant to General Counsel
Bernice Phillips, nominee to Board

 

C O N T E N T S
	P A G E
Chairman's report	7
Members' reports	8
President's report	10
Acting Inspector General's report	13
Consider and act on nominations for the Chairmanship of the Board of Directors	43
Consider and act on nominations for the Vice Chairmanship of the Board of Directors	48
Consider and act on the report of the board's Provision for the Delivery of Legal Services Committee	50
Consider and act on the report of the  board's Finance Committee	73
Consider and act on the President's and Acting Inspector General's  recommendations for FY 2004 Consolidated Operating Board or Revised Temporary  Operating Budget	76
Consider and act on space reallocation options at LSC headquarters and  related financial implications	77
Presentation on loan forgiveness by John Eidleman	89
Consider and act on the report of the board's Operations and Regulations Committee	127
Consider and act on the report of the board's Search Committee for LSC President and Inspector General	129
Consider and act on proposed resolution governing board member compensation	131
Consider and act on proposed Resolution authorizing the chairman to appoint a member to the Board of Directors of Friends of the Legal Services Corporation	135
Consider and act on board's meeting schedule for the remainder of calendar year 2004	143
Consider and act on other business	159
Public comment	159
Consider and act on whether to authorize  an executive session of the board to address items listed under Closed Session	162

MOTIONS:

46,  48,  49,  76,  81,  130,  133,  136,  162

P R O C E E D I N G S

MR. STRICKLAND: Let me call to order the continuation of the recessed meeting of the board of directors of the Legal Services Corporation, and note for the record that we are now going to proceed to hear some non-action items, reports and the like, and at 11:00 we'll also note for the record that at that point in the meeting we are going to begin to take up action items.

So with that notation -- and our agenda was approved yesterday, I believe. Is that correct? We approved the agenda yesterday?

MS. MERCADO: Yes.

MR. STRICKLAND: And we also approved minutes. So the first order of business is to introduce officially to the board in her first meeting here our new president. And I thought I would tell you a story about a recent introduction of Helaine that may underscore the fact that we made the right decision in appointing her as our president.

It was my pleasure to introduce her to the technology initiative grant conference in Austin, Texas recently. And actually, I didn't introduce her. I was just telling about her appointment. She came later in the week.

So it was a little bit of a disconnect. I was not introducing her, but I was describing her, the process that led us to select Helaine. And after I described the process, I identified everybody on the search committee and explained the process that we followed.

But when I came to the point of mentioning her name, there was spontaneous applause in the room. So I thought that was a very telling report on the fact that we had made the right decision.

So I don't think Helaine needs any further introduction, but I'm delighted to say that we believe we have at the helm the right person at the right time. And I'm delighted to welcome Helaine Barnett officially. And let's have a round of applause for her.

(Applause)

MR. STRICKLAND: Now, the items that we can take up at this point, I've asked our general counsel and his able assistant, Pat Batie, to mark the agenda as to the items that we can consider. And first is the chairman's report.

So I already told you one thing that I've been involved in recently was to attend a portion of the TIG conference in Austin, which is well attended, about 100 or 120 people at that conference. And I think they had a very good meeting, from what I've been told.

I also enjoyed the hospitality of Bill Whitehurst while I was in Austin. I told him I'd never been to Austin before, and I can tell you I know a lot more about Austin now, and it was a very enjoyable visit.

Also I traveled to Washington on January 19th for the purpose of introducing Helaine to the LSC staff. I didn't think it was fair or reasonable to just say, well, why don't you just show up on January 20th.

So the staff was assembled, and I thought Helaine's remarks were very thoughtful and well-received by the staff. And she concluded by telling them, "Call me Helaine." So I think she set the tone for her leadership right at that moment, and I think everybody was impressed with that. I certainly was.

I believe that's all that I have in the chairman's report. And I will now ask if any members of the board have reports they would like to make. I'll just make that as a collective statement. If anybody, any member, has a report.

Yes, sir?

MR. DIETER: Just one item to report on. And I guess in Colorado, the University of Denver Law School and the University of Colorado Law School have instituted loan assistance repayment programs. The DU program is quite well-funded, and University of Colorado one is not so well-funded. But this year's graduating class is making a class gift to bring up the amounts.

And the Colorado Bar Foundation is going to proceed to set one up because the law school programs are designed to benefit graduates of the law school programs, not necessarily practitioners within the state.

So anyway, that's all I have to report from Colorado.

MR. STRICKLAND: Any other members have reports they'd like to make?

MR. McKAY: Mr. Chairman?

MR. STRICKLAND: Yes, sir?

MR. McKAY: It was my privilege to represent the board at the NLADA meeting in Seattle in November. And I gave a brief report on where we were going as a board, and of course the staff helped me on the presentation and you, Mr. Chairman, reviewed it before I gave it to make sure I did not drift from accurately representing where the board was going. It was an honor to represent the board, I think it was well-received, and the speech was posted on the LSC website.

It was also my privilege to represent the board at a technology symposium at the University of Washington in Seattle earlier this month. And again, I received assistance from Randi Youells and her staff. And I thought that was well-received, and even now that presentation, along with the other speakers, is being reproduced on the University of Washington cable television channel and our local C-Span channel, which is TVW. And I think that went well as well.

MR. STRICKLAND: David Hall, aren't you going to be representing the board at a function next week? You might tell us about that.

MR. HALL: Sure. There's a function planned for this Friday to celebrate African American Heritage Month, and the focus of the program is going to be looking at 30 years of African American participation in legal services.

And I've been graciously asked to be the keynote speaker for that event, and I think there are some other distinguished guests who are coming. And I look forward to that event.

MR. STRICKLAND: That should be a great event. And thank you for representing the board at that occasion.

Now let's hear the first president's report from Helaine Barnett.

MS. BARNETT: thank you, Mr. Chairman. At the outset, I would like to acknowledge and thank the chairman of the board, Frank Strickland, for graciously extending himself to me over the period before I started with the Legal Services Corporation, and for coming to Washington to introduce me personally to the LSC staff on my very first day at work, which was January 20th.

While it obviously would be premature for me to make a report to the board after only eight days, I can share with you and believe you will be pleased to know that I received a very warm welcome from the entire LSC staff, and I'm very pleased to be here.

The day, as the chairman explained, started with an all-staff meeting, where I shared my management philosophy, my work ethic, and my expectations of how we will work together. I then toured the offices and met individually with all members of the staff who were in the office. I also had a meeting with the inspector general.

And in key meetings with the executive team and with all the directors of staff, I am currently in the process of being briefed and educated and am getting an introduction to understanding the work of LSC.

I have had preliminary briefings on such matters as the budget process and congressional relations, though obviously not an in-depth, substantive review.

During my first week, I attended, as you heard, the annual LSC conference of technology initiative grantees in Austin, Texas, and went to the reception for more than a hundred attendees on Thursday, January 22, and addressed the group at its plenary session on Friday morning, January 23.

I also attended on Friday, January 23, LSC's Diversity and Leadership Advisory Council's second annual one-day retreat, which took place at the same hotel on the same day.

On Thursday, January 29, I was the guest speaker at the New York State Bar Association's annual equal access to justice luncheon, held during the state bar's annual meeting in New York, which was attended by nearly a hundred bar leaders, statewide project directors of LSC-funded programs, members of the judiciary, and directors of pro bono programs and pro bono lawyers.

Next Saturday, February 7th, I will attend a reception given in San Antonio by the Texas equal access to justice committee while I am there for the ABA mid-year meeting. And it will be held at the office of an LSC-funded grantee.

So I have had a very busy first eight days, and I look forward to continuing to get immersed in my work and coming to grips with the problems, opportunities, and challenges of the Legal Services Corporation. Thank you.

MR. STRICKLAND: Thank you very much, Helaine. Lillian BeVier and I were talking this morning, and we both agreed -- and these were Lillian's words -- that you've given us an injection of energy, and we appreciate that very much. And we welcome you to our organization and look forward to working with you.

MS. BARNETT: Thank you so much.

MR. STRICKLAND: Len, can you come forward and give us the report of the acting inspector general, that is, that portion that we can receive in open session.

MR. KOCZUR: Thank you, Mr. Chairman. Since our last meeting, we continued our series of program integrity audits. We issued the final audit report on the California Rural Legal Assistance grantee.

In this report, we reported that the grantee did not comply with the program integrity regulation 1610.8 in that objective independence and -- excuse me -- objective integrity and independence was not maintained with the California Rural Legal Assistance Foundation. The program did not prepare statements of facts and identify clients in a limited number of cases, and improperly made grant payments for an organization.

We also reported that California Rural had not violated either the class action regulation or LSC's financial and alien eligibility requirements in its pursuit of cases under the California Business and Professional Code Section 17-200.

Under this part of the code, the grantee represents individuals who are not named in the case. It's somewhat similar to class action, but our finding was it was not class action. This is important because a number of programs in California bring this type of litigation for their clients.

CRLA did not agree with the report. We have asked them to provide an audit action plan to implement the recommendations. That plan is due on February 11. We'll review the plan. If they provide an acceptable plan to implement the recommendations, we'll refer the report to LSC management for follow-up to ensure the recommendations are implemented.

If the plan is not acceptable, we'll refer it with a recommendation that management require the recommendations to be implemented, and if they aren't implemented, to apply appropriate sanctions under the LSC regulations. Obviously, we'll work with LSC management in pursuing the audit action plan.

We also issued the report on Legal Services of Northwest Ohio. We found no program integrity violation here, but there were two cases where attorney's fees were claimed.

The fees were never collected because the case stopped prior to going to court, so we provided some recommendations that simply changing a few internal procedures and clarifying their instructions to the attorneys should eliminate the problem.

I might say there were two cases out of a number of cases, so it was not a systematic problem. It was just kind of two things that happened. It was senior attorneys, and they made a mistake, is what happened. It wasn't -- there's no systemic problem there.

We also began the second phase of our private attorney audit. This audit again is looking at the extent to which grantees are involving private attorneys in the program, as well as their compliance with the program integrity -- I'm sorry, the private attorney involvement regulation. We just started work in a program, Central California in Fresno, California. We expect that report to be out in about six weeks or so.

Yesterday I reported on the corporate audit. Essentially, we're waiting for the data for Friends to be provided to their auditor so a footnote can be included in the corporate financial statements concerning Friends.

We're also continuing our mapping evaluation project. If you recall, the first phase of this project was conducted in Georgia and was very successful, and certainly mapping has potential for providing management with a good tool for their programs.

In phase 2, we're working with five grantees in southern California, seeing how well mapping works in an area where there's a diverse population and a very large poverty population.

And we're also expanding the project at the grantees' request in that they would like to see the possibility of mapping matters, those things that don't rise to the level of a case but is something they spend time on and effort.

And this is a very -- it's difficult to do. There are some things, like community education programs, you can probably map pretty well because they're held at a site, an address, and you can identify that. Other things, such as referrals to other programs and all, those are not so clearly mappable.

But the grantees are really serious in this and would like us to make a real effort to see if we can apply this technology to that phase of their work.

Last week we had a meeting with these grantees and reviewed the progress of the project to date. We're mapping approximately 140,000 cases, and it looks like we'll have a better success rate than we did in Georgia in that we'll be able to map a lot more of the cases.

And finally, we expect to produce the first set of maps by April and report on this phase of the project by the end of July. We're continuing to work with the Georgia programs. In our initial phase, we used the 1990 census data because that was what was available at the time.

Now we're updating it with the 2000 census data, and it looks like that we're going to have better success in providing information about the rural areas, which for the Georgia Legal Service program that's very important because they have a vast area with a rural area to serve.

That concludes my report. In the executive session we'll talk about our investigations and our litigation, which is finally drawing towards a close.

MR. STRICKLAND: Any members have questions? Go ahead, Tom.

MR. MEITES: Since we do have a little time, maybe we can help you with these questions.

I read the California Rural Legal Assistance report, and I also read the materials that the program submitted. I think it would help me in my work, and perhaps the board as well, if you and perhaps others can walk us through what happens if you and California reach an impasse.

MR. KOCZUR: Okay. Certainly.

MR. MEITES: How much more your office does and how much more the staff does, and first try to resolve it; and if it's not resolved, what steps are available to ensure compliance.

MR. KOCZUR: Sure.

MR. MEITES: Now, I'm not suggesting in any way that you're not going to work this out. But when I read the papers, it occurred to me, I really don't know what happens next. So it would be helpful for you to tell us.

MR. KOCZUR: Certainly. Yes. The next step in the process, as I indicated, when we issued the final report, if you remember, we asked them to provide a plan to implement the recommendations despite their disagreement. As I said, that's due on the 11th.

We'll review whatever plan that they provide, and we'll make a decision and say, yes, this is acceptable, or no, it isn't. If it's acceptable, then we'll -- obviously we'll let CRLA know that immediately and we'll forward it to management because the plan will say, well, we intend to take this corrective action by a specific date.

It's management responsibility then to follow up to make sure that that action is taken, and we work together. I'm in communication with the Office of Compliance and Enforcement on that, which is the LSC management side that handles this.

If the plan -- if they don't submit a plan or if it's unacceptable, then again we'll still refer it to management with the recommendation that they require our recommendations to be implemented, and that if they're not implemented, sanctions be taken.

Now, this is not -- it's not something I just send over to them.

MR. MEITES: I understand.

MR. KOCZUR: There's dialogue back and forth. We talk with the folks. If necessary, we'll talk with the program director at CRLA in an attempt to work it out.

Then the Office of Compliance and Enforcement will get our recommendation. And if the recommendation is that they need to enforce -- or to require CRLA to implement our recommendation, then what normally happens is they'll talk with -- contact Vic's staff and get legal opinions, and they'll thoroughly review it and make a decision as to whether to agree with us or to agree with the grantee and go forward from there.

All during that process, we're talking back and forth. So it's not like we're completely out of it, out of the process. But it's their decision, clearly. And if the decision is to agree with the grantee, that's the decision at that point.

MR. MEITES: Maybe Vic could help us from here. Let's assume -- and if John's there as well -- let's assume that management determines that your recommendation is appropriate and the grantee -- I'll just use grantee from now on -- says, you're wrong. We're not going to do anything. What happens after that?

MR. EIDLEMAN: Well, the next step would be to try to encourage them to come up with a corrective action plan. And if we're at an impasse, then we will have to take some action in conjunction with the Office of Legal Affairs. We can put them on short-term funding.

I guess ultimately what we can do is tell them we'll no longer fund them as a program. But we have to go through several steps -- meeting with them informally and talking to them about the corrective action.

MR. MEITES: Vic, why don't you take over from there.

MR. FORTUNO: There are a few -- I think one of the things that you will hear about in Ops and Regs, and in the board more generally after Ops and Regs has had an opportunity to focus on it, is this notion of lesser sanctions. You'll hear some discussion of the need for a lesser sanctions role. And a situation like this may help to illustrate the need for something like that.

In any event, we do have certain tools available to us at this point. Some of those would be, for example, provided for in a suspension of funding, which is provided for at 45 CFR Part 1623. And that rule provides that the Corporation can, in certain instances of noncompliance, suspend funding.

And that would be all or a part of the grantee's funding for a period up to 30 days. So the check, if you will, that they would get for that 30-day period can be withheld in its entirety or in part for any part of that 30-day period.

What that does is it's a temporary withholding. It's not a permanent deprivation because at the end of 30 days or whatever the period set in that particular instance happens to be, the funds are released.

There is some due process built into the rule so that there's an opportunity for the grantee to address management and attempt to persuade management that under the circumstances, that's an inappropriate solution. But that is one mechanism.

The other is, for a more extreme case, 45 CFR Part 1606 speaks of termination of funding. And termination of funding is defined to include a reduction in funding.

It doesn't have to be termination of the entire grant; it could be reduction of the grant. So if it's a 5 percent reduction, that's -- but it's during the term of grant or contract. Then that's considered a termination. And that rule entails a great deal more in the way of due process protections.

Those are two of the salient tools or approaches available to the Corporation. There may be, under certain circumstances, the option of disallowing the cost, and that's under our questioned cost regulation.

But those are, I think, the most significant tools available.

MR. MEITES: Two other questions. Does any of that require board action?

MR. FORTUNO: No.

MR. MEITES: And the last -- the other question is: How often does management actually have to use these sanctions? Once a year? Five times a year?

MR. FORTUNO: Well, no. The suspension, the 1623 solution, has been used -- of late you see it occur maybe a couple times a year. Randi -- I don't know if Randi is here, but Randi would have a better handle on the number of times that it's actually employed. But I think it averages two, maybe three times a year, tops.

In terms of the termination of funding, that is much most costly. It's a much more protracted matter, entails the allocation of very considerable resources.

The Corporation no longer has an option it used to have, which was back in the days of so-called presumptive refunding, there was a reg at 45 CFR Part 1625 which provided that, unlike the termination reg, which concerns a reduction in funding during the term of grant or contract, the denial of refunding reg applied to once the contract term had expired and you were about to renew the contract.

Since it was a time of, as I said, so-called presumptive refunding, there was a mechanism which allowed the Corporation to deny refunding to or reduce by more than 10 percent the amount of funding to a grantee. And that entailed some of the same kinds of protections.

And I have to say that I've probably done more of those hearings that everybody else in the history of the Corporation combined. I can tell you that they're draining. They're expensive. In many instances, the total cost, when you factored in staff time and everything else, ran in the range of a half million dollars or more.

One case I can recall entailed 21 days of testimony. We had over a hundred exhibits, many of which were voluminous. And there is -- it entails a hearing, a full-blown hearing before an independent hearing examiner appointed by the Corporation. We've used retired judges in the past and others.

And once that process runs its course, then the independent hearing examiner issues a recommended decision, which unless either party seeks review by the president, the head of the agency, if you will, for this process, the recommended decision becomes final.

If it's appealed, then there is a de novo review. Once that process runs its course and the head of the agency, the president, issues a decision, then typically what would happen is that we would find ourselves in federal district court.

There was a request for TRO, preliminary injunction. We would litigate that at the district court level. We'd get through that process. We'd find ourselves in the circuit court.

So that's what I mean by it's a lengthy -- it's a cumbersome process. It's not one of these solutions where it's applied, it's certain, it's swift, it's over with. This is a very protracted process, and in fact can go on for a year, sometimes two years.

MR. MEITES: I gathered the remarks of all three of you that not only is it your desire to resolve these disputes before any of this happens, but that you are usually successful at being able to do that. Is that right?

MR. KOCZUR: Yes. That's correct. At least in the last six or seven years, we have never gone to the process that Vic described. The audit resolution process, we called it, I just described has resolved these issues before there have been any -- there might have been a short-term suspension of funding for a month or so, but beyond that there has -- the issues have been worked out.

So we have never -- again, the process that Vic describes, that's in place. But it certainly hasn't been in the immediate past. It hasn't been necessary.

MR. MEITES: Thank you.

MS. BeVIER: I wonder if you could explain a little bit more about the presumptive refunding and so forth, and kind of how long the grants are and -- I mean, I would have thought that if there was concern about compliance, and it was really deep and you were, you know, in the middle of -- and you were convinced that the compliance was not forthcoming, that another grantee would be the appropriate recipient of LSC money.

MR. FORTUNO: Well, the presumptive refunding scenario is one that existed prior to the advent of competition. There are no longer -- now that we have competition, it's no longer presumed refunding and, in fact, our competition reg makes clear that you're not to give preference to the existing grantee just on that basis.

It was at a time when there was no competition, when the funding was -- Legal Services inherited a situation from the Office of -- the Community Services Administration at OEO back in the old days when funding was handled by that entity. And that was then transferred over to LSC.

LSC continued the funding, and it was funding which, if a grantee received funding one year, it was presumed to get funding the next year unless they had done something such that the Corporation was justified in either reducing or denying altogether the funding to the grantee. So it was -- the burden was on the Corporation.

Now the grantee applies for funding and the Corporation makes a decision based on competition. It may be that there isn't as much competition as some folks might think or might want just because it's difficult, especially if you have a statewide program, to find an alternative provider.

But whereas now the Corporation makes that decision on a clean slate, so to speak, back then, that is, prior to the mid '90s, it was presumed that the grantee would continue to be funded unless the grantee did something that was sufficiently serious that 1625 could be employed to reduce the level of funding.

There was also what was -- I remember some of the news articles referred to it as the 10 percent solution, which is the reg, that is, 45 CFR 1625, that provided a mechanism for denying refunding defined the denial as a reduction by over 10 percent, so that anything up to 10 percent was not considered a reduction.

So the Corporation would, when it felt it had a serious situation but not one that warranted marshaling of those kinds of resources, dedication of those kinds of resources in that effort, would reduce the level of funding by 10 percent. And that has a significant impact on a grantee.

I should say that Randi Youells came up and mentioned in my ear just a few minutes ago that during the four years she's been here, we've done suspensions about twelve times in four years -- so it's an average of three times a year -- and that in some instances, just the notice is sufficient to motivate compliance.

The rule requires that we send out a preliminary determination of our intent to suspend funding. The grantee has an opportunity to come in and informally confer with the Corporation. And oftentimes, that's where it ends. There is no actual suspension implemented because the necessary action is performed prior to the actual implementation of the suspension.

MS. YOUELLS: I would also like to note that out of those twelve, most of them were self-generated: failure to submit an audit, for example, in a timely manner. Very few of those were generated by us. The grantee did something that required us to move very quickly.

And in answer to your earlier question, grant terms range anywhere from one to three years. Approximately one-third of our grantees are in competition every year. Competition takes place ever year. We are in the competition cycle now for this year.

And at the end of the year, the president makes a decision as to who we are going to award the grants to and for how long we are going to give them a grant term. And we do consult with the Office of Compliance and Enforcement before we make those recommendations to the president.

A grantee may get a one-year funding term if there are problems, and we do not want to give them a three-year term. If a grantee has been problem-free for a period of time, then we like to give them the security of a three-year grant that requires them to go into competition three years later.

MS. BeVIER: That's very helpful, actually.

MR. FORTUNO: And certainly compliance deficiencies can be factored into the competition.

MR. STRICKLAND: I think Maria -- beg pardon. Did you finish?

MS. BeVIER: Yes. I just said it's helpful to know some of this. It's timely, too.

MR. STRICKLAND: Maria Luisa and then Herb had questions.

MS. MERCADO: Okay. A couple of questions.

During the period in time, if the Office of Compliance has already looked at the particular issue that the inspector general has looked at and the Office of Compliance did not find there to be a violation but the inspector general did find that there was a violation, so if there's a difference of opinion, how do you resolve that? You know, who has the trump card on that? And that's one question. I guess you can answer that. I've got a couple more.

MR. KOCZUR: Could I? It's management's -- management makes that decision, management being OCE, Vic's staff, and so forth. Once we refer our report to OCE, it's out of our hands. Certainly we talk and we debate. But it's -- we don't have a vote in that, so to speak. It's the management's call.

MR. FORTUNO: That's right. Ultimately it's a management decision. d

MS. MERCADO: And as far as any suspension of funding that goes on, what occurs or what happens to the clients that are being represented as far as staff and resources? If you suspend funding, who is providing the legal assistance to the poverty community for the grantee that you've suspended funding for?

MR. FORTUNO: I defer to the Office of Program Performance. But I can say that some folks will question the effectiveness of a suspension because they note that it's simply a temporary withholding, that eventually the grantee will get funding.

And certainly in the case of a grantee that's living hand to mouth, where its sole funding or its principal funding is LSC, if it's living, as I said, hand to mouth, that suspension can have a significant impact on the grantee. But I'll let Randi address that specifically how.

MR. KOCZUR: If I could say one thing. I don't believe we've, at least from the audit standpoint, going to a suspension, at least as long as I've been here. Usually it's enough we would -- if we tell the grantee, we the audit staff, that we're going to recommend suspension, that's enough to correct the deficiency.

Usually the deficiency we have found is we've had a real problem getting some audit reports in. There's two or three programs that are chronically late. And we work along, and at some point in the process we say, enough's enough.

We need that report, and if you don't give it to us by this date, as you've said you will, we're going to recommend suspension. At that point, we would -- it would become -- we would recommend to Randi that the suspension take place.

And almost invariably, we get this corrective action. We get the audit report before the suspension can be put in place. And I don't recall, at least from the IG's standpoint, that a suspension has taken place as a result of our work or because an audit report has not been received.

MS. YOUELLS: It's important, I think, to remember that a suspension of funding is only for a period of one month. It is all or partial grant. It is designed primarily to get the grantee's attention.

Having said that, we certainly do weigh very carefully the impact on services to clients before we go down that route. And before we go down that route, I have numerous conversations with grantees trying to schmooze them into complying with what we want them to comply with, and bring up to them the fact that loss of funding could have a very serious effect on client services. So it's not something we do lightly.

MS. MERCADO: Well, I'm just wondering, as far as our ethical obligations as lawyers, I'm thinking of personnel that represent clients in the community, when you're in the middle of litigation and you're in the middle of a case, regardless of whether or not it actually goes to court or not, representing that client and funding is suspended, what is done to protect the client's interests at that point in time?

Assuming that there will be a difference and that there is a standoff or a standpoint on a particular issue that may not be an audit report, which is slightly different, then what do you do with the clients having their cases go forward or their representation go forward?

MR. FORTUNO: Well, I think that strictly speaking, it may be more of an issue for the grantee and their attorneys because I think it's they who have the attorney-client relationship.

And I think ethically, if you're representing your client, I don't think that you can drop out of a case simply because funding has dried up and you refuse to proceed with it. I think that the only way you can get out of a case is with permission of the court. You have to ask consent of the court, and you have to do so in a way that doesn't prejudice the interests of the client.

So I think that in the first instance, what we're talking about is the ethical obligation of a grantee. That's not to say that LSC isn't without some sort of moral obligation. But I think that strictly speaking, from an ethical standpoint, I think in the first instance that's really a question for the grantee attorney who has the attorney-client relationship with the individual client.

MS. YOUELLS: And in fact, we do call that to their attention during those preliminary discussions that take place as we're looking at a suspension of funding. And we remind our grantees that should we be in the position where we have to suspend funding, it is their ethical obligation to ensure that existing clients continue to be served.

Many grantees have other dollars that they can use. Of course, they can contact the private bar. But it is their ethical obligation and it's something that as we weigh seriously, so must they weigh seriously the impact on their clients of going to a state of impasse with LSC.

MR. EIDLEMAN: I'd like to add, though, that the programs are under -- if they have funding that's suspended or even put on month-to-month funding because that kind of unknown for staff attorneys would distract them from representing their clients, and we certainly, before we take any action, take that into consideration.

MR. STRICKLAND: Herb, did you have a question?

MR. GARTEN: My question as to the practical effect of the 30-day suspension has been covered very adequately. Thank you.

MR. STRICKLAND: Rob?

MR. DIETER: I had one question that came up in the materials was, as I understood it, there were, you know, two attorneys employed by the grantee. One of the attorneys was employed 90 percent of the time, but 10 percent of the time in -- you know, for an agency that did unrestricted activities.

And there was, in passing, a reference that involving that person in their 10 percent capacity was -- you know, fell within the spirit of the private attorney involvement requirement, that each grantee spend 12-1/2 percent of their money on private attorney involvement.

And I wondered if you -- when we audit private attorney involvement expenditures, do we account for the kind of a situation where the private attorney in theory is in reality a part-time employee of Legal Services Corporation, or is that broken down to that kind of an issue?

MR. KOCZUR: Yes. That type of thing is examined, certainly. I don't know the specific reference in the report to that.

MR. DIETER: It was page 4(i)(8), whatever there's a -- on the co-counsel cases response. Because it seemed to me the spirit of private attorney involvement is to try to get attorneys that are not part-time employees of legal services to be involved in cases.

MR. KOCZUR: That's certainly the objective of the PAI part.

MR. DIETER: Sort of -- it's at paragraph -- the last part of the second paragraph under (a).

MS. TARANTOWICZ: You said page 4?

MR. DIETER: Well, it's (i)(8), and there's a 4 above it, in the appendix 1, I guess it is.

MR. STRICKLAND: While you're looking for that reply, let me note --

MR. KOCZUR: That is in the CRLA report.

MR. STRICKLAND: While you're looking for something to reply with, let me note for the record that we're now past 11:00 so that we're in a position to take up action items. I just wanted to insert that into the record.

Go ahead.

MS. TARANTOWICZ: It is true that CRLA used co-counseling arrangements to fulfill their PAI requirement. But the one instance, I think, that you are referring to, where the 90/10 attorney would co-counsel sometimes on behalf of the other organization, I do not believe they counted towards their PAI.

MR. DIETER: Okay, because it appeared that that's what some of the justification was. But we audit whether that's happened?

MR. KOCZUR: Yes.

MS. TARANTOWICZ: Right.

MR. DIETER: Okay.

MR. STRICKLAND: Anything else? This all flowed from Len's report. Any other questions relative to the report of the acting inspector general?

(No response.)

MR. STRICKLAND: Let me ask you one other thing, Len. I don't think this was in any official communication between your office and CRLA, but maybe it was a website.

But there was a column written by thee executive director of CRLA, and I certainly don't remember it verbatim, but there seemed to be some discussion about, from his perspective, that LSC was imposing some requirements on CRLA that previously weren't imposed.

Do you have a comment on that, what he might be talking about?

MR. KOCZUR: Well, there's a couple of things. The article you're talking about, I believe, was not on the CRLA website, but it was on the Los Angeles Legal Aid Foundation website --

MR. STRICKLAND: Right.

MR. KOCZUR: -- which reported what the program director was saying. These are not new -- no. It's something -- we're out there auditing what was -- what the regulation requires. And there was nothing new. And I don't know what more to say about it. It's not --

MR. STRICKLAND: Okay. That's enough. That answers my question. That's fine.

Does anyone else have other questions of Len or anybody at the table?

(No response.)

MR. STRICKLAND: Okay, Len. Thank you very much.

MR. KOCZUR: You're welcome.

MR. STRICKLAND: Well, we are now at the point in the agenda where we can take up action items. And I think we'll just take them up in the order that they are on the agenda.

So we'll go back to the item 5 on the agenda, consider and act on nominations for the chairmanship of the board of directors. The bylaws of the Corporation require that that be done annually. And the current chair and vice chair were elected in April.

Technically, we could probably wait until April to deal with that. But since this is what is referred to in the bylaws as the annual meeting, I opted to go ahead and put this on the agenda now so that it would appear at the annual meeting hereafter.

So with respect to item 5, I would entertain any nominations for the position of chair.

MR. FUENTES: Mr. Chairman?

MR. STRICKLAND: Yes, sir?

MR. FUENTES: Mr. Chairman, I'd like to speak to this for a moment because it doesn't seem all that long ago that we were in Santa Fe. And yet here we are again, and we find two matters, item No. 5, the nomination of the chairman, and 6, the vice chairman. I'd like to speak to those, if I could, as a member of this board. It's a very natural and comfortable thing to do.

I think that this entire board can be very proud of the leadership that you and our good vice chairman have demonstrated. You have been articulate and you have been calm, and you have been studied and serious in the leadership that the two of you have given to this board.

I think we can all be proud as members of this board of the good judgment and the good listening which the two of you have done. There have been at times differences of opinion, a variety of opinion expressed by this board, and both of you have been very open to hearing all of that opinion.

You brought professional preparation to this role, which was acknowledged in Santa Fe by your selection by this board. And you have demonstrated, in my opinion, a commitment to the cause of access for equal justice. You were appointed, as we are, by this White House, and you have proven yourselves to be talented voices.

I think that we have faced since Santa Fe some significant issue, especially in the area of staffing and personnel. And you have given us leadership in addressing these issues in a timely fashion, in an urgent fashion where necessary, with sensitivity and clear thinking.

So it's a privilege, really, to offer for nomination for reelection as chairman of the board of directors Frank Strickland of Georgia.

MS. MERCADO: Second.

MR. STRICKLAND: Yes, Herb? Thank you very much for that.

MR. GARTEN: I would like to move a second to that, and also briefly comment that most of us first met you in Santa Fe. And I am pleased and honored to have been in the position to serve with you.

I think we've had a wonderful period since the Santa Fe meeting, heightened by our selection of a new president. And I commend you, and I commend Lillian, for what you've done during the past year to demonstrate the bipartisanship that is so important to legal services and to the community, legal services community.

So I take great pleasure in seconding that nomination.

MR. STRICKLAND: Thank you very much for those kind words to both of you. And before we proceed to a vote, I would make a comment that are there any other nominations?

M O T I O N

MS. MERCADO: I move the nominations cease.

MR. STRICKLAND: Any objection to closing nominations?

(No response.)

MR. STRICKLAND: Well, let's proceed to a vote and then I'll make my comment. All those --

MS. BeVIER: You have to put your head down.

MR. STRICKLAND: Secret ballot. But all those in favor of the nomination please signify by saying aye.

(A chorus of ayes.)

MR. STRICKLAND: Thank you very much.

And I would like to comment by saying that if I hadn't been appointed to the board, I wouldn't know any of you. And I can say that about most all the people in the audience. And that's been an absolute delight, to get to know all of you and to work with you professionally. And to get to know some of you personally as well has been an important event in my life.

So I thank all of you for the opportunity to work together, and I look forward to continuing that work in the future. And the same goes for all of our friends and constituents in the audience. I thank you for your hard work and effort, and I look forward to a lot more of it.

And I do thank you, Tom, particularly for your kind words, and a second from Maria Luisa and Herb. I very much appreciate it.

Let's move then to a -- I'll entertain nominations for the position of vice chair of the board. Is there a nomination?

MR. FUENTES: Mr. Chairman?

MR. STRICKLAND: Yes, sir?

M O T I O N

MR. FUENTES: I would move the reelection, the nomination, of Vice Chairman Lillian BeVier of Virginia.

MR. STRICKLAND: Is there a second to that?

MR. GARTEN: Second.

MR. STRICKLAND: Seconded by Herb. Is there any discussion?

MS. MERCADO: Again, my only concern, and it's nothing against Ms. BeVier, but my only concern is that I still believe that as a policy, we ought to have bipartisan chair and vice chair.

And, you know, anyone would be equally up to par to be the vice chair. I have no doubt about that. I think that's my only reservation. And again, it's not anything with you. I just wanted to say that.

MR. STRICKLAND: Oh, we understand that. And we had that discussion in Santa Fe as well.

Any further discussion?

MS. MERCADO: Mr. Chair?

MR. STRICKLAND: Yes?

MR. MEITES: I would like to support the nomination of Lillian. It has been a pleasure working with her. She and I and Mike are laboring under the burden of these regulations, and with her assistance and Mike's assistance and her service as vice chair, I'm sure we'll continue our labors.

MR. STRICKLAND: Thank you. Thank you very much.

Any other comments?

(No response.)

MR. STRICKLAND: Is there a motion that nominations be closed?

M O T I O N

MR. McKAY: So move.

MR. STRICKLAND: All those in favor of that motion, please signify by saying aye.

(A chorus of ayes.)

MR. STRICKLAND: Those opposed, nay.

(No response.)

MR. STRICKLAND: The ayes have it. And I would declare Lillian elected by acclamation, and congratulations.

MS. BeVIER: Thank you.

MR. STRICKLAND: And do you have any comments that you'd like to make at this point?

MS. BeVIER: No. I would echo everything that you said. It's been a privilege and kind of an unexpected delight, I have to say, to be associated with this corporation. And I very much look forward to working with our new president.

MR. STRICKLAND: All right. Then let's move to item 14 on the agenda, and to consider and act on the report of the Provision for the Delivery of Legal Services Committee. Chairman David Hall.

MR. HALL: Thank you, Chairman.

Many of you were there yesterday when we had our committee meeting. I will try to summarize as best I can what I thought was a very productive meeting of the Provisions Committee.

The focus of the session was on the issue of quality because we feel that that is the real pressing issue for the future of the clients and certainly of the grantees, but also that it is fundamental to our mission.

We were fortunate to have five presenters, one, of course, the vice president for programs, Randi Youells, who set the framework for this and was also very instrumental in working with me to select the individuals who came before us.

We had Jeanne Charn, who is the director of the Bellow-Sacks Access to Civil Legal Services project at Harvard Law School. We also had Lillian Johnson, who is the Executive Director of Community Legal Services from Arizona.

We had a presentation by Alan Houseman, who is the Executive Director of the Center for Law and Social Policy, and finally, Colleen Meek, who is the Executive Director of Oklahoma Indian Legal Services. They brought very diverse perspectives, though with common themes, in regards to this issue of quality.

There is no way in the time allotted that I can summarize all that they presented, though there were a few points that I would like to emphasize for the record. Without ascribing these comments to any particular individual, they were some common themes that I thought were very important.

One was that this notion of quality is more about systems than about individuals, and that therefore we need to begin to focus on how we measure systems and make sure those systems are providing quality.

The notion that a strong peer review is an important part of quality. There was a notion that -- or an indication that merit pay systems can play a role in the quest for quality.

Something that is certainly important to us is that from a funder's perspective, that there's a need for an external source of accountability in regards to the whole issue of quality, and that if we're going to assume that role, then we also need to be conscious of the funding aspect of that or providing some assistance to this whole process.

We were reminded that the client community that we are serving is very diverse, and therefore whatever standards we develop have to take that into account.

We were also told that the existing standards developed some time ago by the ABA and LSC are good standards that we should take into account and build in, that they probably need some revision and updating, but we should make sure that we don't reinvent the wheel, and look at some of the quality standards that are there.

We were also made aware that this is not a new issue, that there was an effort to begin to focus on quality and to focus on peer review, but because of some historical developments, the focus on compliance kind of took us away from that, but that this is now an appropriate time.

And we were also made aware of some other experts who have thought a lot about this issue and we should try to collaborate with. And finally, we were made aware of the fact that if you hire the right people and if you give them the right tools, that the issue of quality can move forward.

So I think the next steps of the Provisions Committee is to work jointly with President Barnett and Vice President Youells to try to decide on -- to design a strategy for moving forward in regards to this issue of quality.

What I hope we would have is probably some collaborative working group that is brought together that would continue to pursue this and report back to us in April, report back to the Provisions Committee in April, about the nature and structure of this process. And we imagine that process looking both at standards and also at this notion of peer review.

We had some brief reports from staff in two important conferences that had occurred recently, one on leadership and diversity and another on technology. It was the fourth annual technology conference. And according to those who were in attendance, both of those events were well attended and very informative and consistent with the programmatic thrust of LSC.

There were some other discussions and conversations we had at the Provisions Committee. But overall, I thought that this was the essence of our time, and a very productive meeting. And we again want to thank those who took the time out to come and present to the Provisions Committee.

MR. STRICKLAND: Thank you very much for that report. I echo what you're saying about the quality of their report on quality, their reports on quality. I thought they were outstanding reports.

Does any member have questions of David?

MR. MEITES: I have a naive question.

MR. STRICKLAND: Go ahead.

MR. MEITES: Sophisticated, because I wasn't here yesterday.

I read through the materials, particularly Mr. Houseman's report. And there are many different kinds of efforts made to study quality. He says four different categories, and even within the categories, there are different approaches.

It strikes me, if you put aside our special purpose grantees, but our general grantees have -- represent clients who have same generic kinds of legal issues.

By using all these different formats and these different study tools, it strikes me that isn't the universe being inefficient? It's as if General Motors has twelve different study forms for its dealers. They're all selling cars.

Why is it not possible to develop a uniform set of nationwide criteria that all of our 150-plus non-specialized grantees can use?

MR. HALL: Well, I don't think no one is saying that you can't develop some general standards in this regard. But I think there is a difference between manufacturing cars and serving human beings.

And one of the standards that LSC has always had is that you have to engage the particular local committee and try to figure out what are the most pressing needs that that community has. And that's different from region to region.

Even holding aside the Native American population and migrant worker population, even within that broader area, there are still differences. And so I think all that -- what we heard yesterday was a notion that yes, there are some uniform things that all of us should be doing, but that we have to involve the grantee in helping us identify what their particular goals are because that is influenced by the people who they're serving.

So I think there is a way of addressing both the uniformity and also taking into account the differences. And I didn't see a resistance from the people in the field who are actually doing that of trying to develop a way to get to that particular point.

MR. MEITES: Thank you.

MR. STRICKLAND: One comment that I might make is that a discussion that I had with Lillian Johnson after the meeting was to this effect, that -- well, I asked her how long she'd been the executive director of her program. The answer was 21 years.

And that led to a discussion about, is there anyone in the wings to succeed you? And I wasn't targeting her; I was really asking that as a generic question for people -- the two directors in Georgia have been in their positions twenty years.

So I was raising the question, and I think that this board ought to consider it. And in particular, I would suggest to Helaine that you might want to begin to take a look at developing -- making some sort of specific effort to develop the next group of leaders to succeed these -- and we were struck when we took a tour of the LSC building the other day and met people, and the obvious question that Helaine would ask: How long have you been with the organization? And I think the shortest tenure that we found was about four years. And it ranged -- then it jumped up sharply to ten, twelve, fifteen, twenty years.

So the broad brush issue is the concept of making some affirmative effort to develop a group of successor leaders to become executive directors and so on. So I just mention that for future reference.

Yes?

MS. MERCADO: And Randi Youells can sort of add to this. Part of what the diversity in leadership initiative that we did a couple years ago was to look at not only the factor of diversity in leadership as far as, you know, race, gender, and ethnicity, but also age, to develop the new leaders that are coming forward from legal services.

And some of them will be from the ranks, and some of them may not be. But exactly because of the grain, so to speak, of our leadership, that they all sort of were factors that came into play, not only that we needed a more diverse leadership as far as gender and race and ethnicity, but also in age and experience as well.

And I'm sure that Ms. Youells -- and that was a partnership with the ABA and NLADA and ourselves, that we had these different national -- and I know there's an ongoing group that is working on that. And maybe we need to flesh it out a little bit more.

MS. YOUELLS: The Leadership and Diversity Advisory Council, in fact, was on retreat last week and spent a significant time discussing whether or not we could pursue what we loosely call a mentoring project, to begin to address some of those concerns.

We also have spent a lot of time in the last several years working with our grantees on both the twin issues of succession planning -- what happens when the baby boomers who hold those positions move on out in the next ten or twelve years, and who is waiting in the wings -- but also to expand the definition of leadership so that we don't have such a hierarchical view of the executive director being the leader in the program, the litigation directors and managing attorneys and a leadership team.

So there are some efforts going on on those levels. The Leadership and Diversity Advisory Council, in fact, decided last night after Lillian's conversation with Chairman Strickland that they wanted to meet again in Atlanta in conjunction with the equal justice conference, and invite Chairperson Strickland to come and meet with them on mentoring.

So those things are certainly something that LSC and in the field pay significant attention to.

MR. STRICKLAND: Thank you very much.

Herb?

MR. GARTEN: I thought the comments regarding peer review by Lillian Johnson and Colline were interesting. In the case of Johnson, I thought that she testified that it was peer review that was $6,000 on site involving seven people, five days on site. And it was remarkable to me that it was done at such a low cost, and apparently produced some very good results.

Then the interesting distinction with Colline was problems, and that you all came in there and supplied all kinds of recommendations. And she termed it peer review. So I wondered whether we were making our peer review available for programs where there are problems.

And I thought it was an interesting distinction between the one that had done it on the ground and peer review with respect to problems within the program itself.

So I'm wondering, have we spent much time on furthering and encouraging programs to engage in peer review?

MS. YOUELLS: Yes. We spend considerable time, especially in the larger programs that have peers within programs, that can work with various offices to encourage them to do that.

Internally at LSC, when we send out evaluation teams, either because there's a problem or because they're involved in post-merger planning, in the last three years we have made significant efforts to include what we call peers on each of those LSC evaluation teams. So, for example, we had a team in a grantee two weeks ago, and the team consisted of only one LSC staff person and two people who are from the field.

Having said that, we have not done a broad-based peer review where we conscientiously say we are going to have groups of peers go out and do as they do in universities with accreditation. We have not done that, largely because of costs.

Team visits, LSC-sponsored team visits especially, are not cheap. If we put people on teams and they're in the field for five days, we pay them a consultant fee, of course, and then all of their travel and housing expenses.

So if you have a team of six people that is visiting a program for a period of five days, then you are talking about around $2400 in consulting fees added onto the expenses of just being on site.

But we do make a concerted effort now to make sure that our teams that go out from LSC have people that you and I would define as peers.

MR. EIDLEMAN: I'd just like to add that I think you heard Colline say yesterday that the Office of Compliance and Enforcement also gave some technical assistance. And they are available is a program has an issue, has a problem. They can come out and give them assistance how to follow the regulations. And that's being done on a somewhat regular basis.

MR. STRICKLAND: Yes, Rob?

MR. DIETER: Well, following up with Herb's comment on that, I was curious about the cost of that. That's why I asked her.

Because I was wondering whether or not we make available to the grantees, just, you know, as part of our funding, saying we're going to set aside $50,000 to sponsor fifteen peer review visits within the programs, and somehow come up with a system that's a fair allocation of how people are selected.

But really, you know, to follow up on Colline's comments that giving the right people the right tools, whether we're doing enough, really, to help them, you know, engage in this kind of activity. Because in talking just informally with some people about this, you know, I think when LSC gets involved in the review, you kind of get a little different view than if you've got a peer there looking at things and you can talk frankly and openly about the issues you have and get management's suggestions.

And as I understand it, a peer review would extend over, you know, four or five days of visits, where they're really shadowing each other around. And they may bring their office administrator with them to talk to the other office administrator while they're going to court to see what they do.

Do we have money to do that?

MS. YOUELLS: In your board materials at the last meeting, we included a report on a special project we had funded where we picked three grantee management from Colorado, West Virginia, and the other state escapes me at this moment.

But we actually said, we're going to give you money, and the purpose of this money is for you to meet with each other, work with each other, and solve problems together on a peer basis. And we're going to step back and we are not going to intervene.

And as I said last week at the Leadership and Diversity Advisory Council, although that was hard for me because I tend to have control issues, the report coming out of that experience was that it was fabulous.

And the Leadership and Diversity Advisory Council last week talked about trying to identify within the LSC budget -- and President Barnett and I briefly chatted about this, but have not had any more extensive conversations -- to come up with, for example, $50,000, $5,000 per team, and say, okay, we're going to make this money available to teams of three people representing different programs, geographical areas. And what we want you to do is begin to model for each other, consult with each other, and become familiar with the program.

So that's right now in the discussion stage. I agree with you. The experiment that we funded last year between John Dasher and two other program directors turned out to just be -- they were glowing about how much they learned from each other, how they were able within a zone of privacy to talk about confidential problems that some of them may have solved. And they were just very high on that. So we are looking at our budget right now.

MR. DIETER: Okay. The other -- as an aside, in terms of performance review and performance criteria and measurement quality and that sort of thing, I guess I'd just point out there is a website, results.gov -- I don't know if you're familiar with it -- which is the President's management initiative.

And it explains how they have instituted a review of all of the federal departments. And on that is a quarterly scorecard showing achieving goals, you know, end neutral, not achieving goals, and which direction they have come from the last quarter.

And not everybody on there has got a green light every quarter or anything. I'm surprised, looking at it, there's a lot of red dots.

MS. YOUELLS: There's a lot of red dots.

MR. DIETER: And, you know, we're not a federal agency. But in looking at how we can try to get better performance from our grantees, I think that that kind of a philosophy that I understand that they've worked on in the departments is something that we should probably look at as well, maybe. You know, you seem familiar with it.

MS. YOUELLS: I totally agree with that. And in fact, in June we are having our second outcome summit. And this one is just for grantees, where we are trying to slowly take the community down a path where the legal services community appreciates that we must begin to take a look at results and we must be able to assess common outcomes. And so that is something we're paying a lot of attention to.

MR. STRICKLAND: Mike?

MR. McKAY: Not to make this another Provisions Committee meeting, but it seems to me, following up on Rob's comments, that there are -- I know that there are other departments in government that have outstanding peer reviews. And as a former member of the Department of Justice, I thought they were very strong.

And so perhaps at one of our next meetings, following up on the comments from the presentations yesterday about peer review, we might ask for some information from those other departments. Again, the Department of Justice is outstanding.

When my office, the U.S. Attorney's office in Seattle, was reviewed, we had the heads of different shops around the country, not from main Justice, coming in looking at us, although it was coordinated by main Justice.

So I think that's -- following up on your comment, Rob, I think that would be -- we could start stealing some of these ideas from other folks who have already been doing it for a while.

MR. STRICKLAND: Yes, Maria Luisa?

MS. MERCADO: On the -- and I think that the ultimate goal on the peer review is to create ultimately better, effective, quality legal services for our clients.

But again, I mean, part of what this board is going to have to incorporate and part of what our staff and our partners are going to have to look at, that we all understand that it's important to have peer review. That also means dollars.

And so we need to look at -- whether looking what, you know, Justice did, or looking at how the other -- what the cost of that entails. We have some figures of $5,000 or $6,000. And given that you cannot peer review every program every year, that there's, you know, a staggered review of however many programs we have over a period of years, what is that equal to in dollar amounts, that in doing our budget mark for the coming years, that we can incorporate that in it. Because it is essential to our program.

MR. DIETER: Well, if I could just comment, I agree totally. But we have certain limited funds. And that's sort of what I raised in the context of whether spending $100,000 acquiring additional rent is in reality the most effective use of the taxpayers' money to support our grantees who deliver the services, you know, to the client community.

And I think it's important for us as a board and for management to constantly ask that question of ourselves as we look at our budget because -- kind of going off here, but in the few visits that we've had to local, you know, community providers, I mean, they're -- I'm sure that if -- they can use additional space. Perhaps they have more pressing needs than we have.

And I think it's important for us to try to support them as much as we can. And that's why I wanted to raise this issue of whether there's a way to try to encourage more of these peer review visits because my understanding is they're quite valuable and people are very open to them, and they seem pretty cost-effective.

MS. MERCADO: Well, and the flip side of that is that it's sort of like preventive medicine, that if you take care of it at the front end, then hopefully it doesn't end up with the inspector general or compliance, with a program that has problems.

When you see the difference in how the programs are treated: Oklahoma program, they sent in the people ahead of time to help them with the problems, as opposed to going in and doing the compliance arm or the, you know, policing type of format of dealing with whatever problems a grantee might have had, that there is a difference in how we treat those grantees. And that's maybe part of an even bigger policy that we have to look at.

But definitely, it's better in the front end if we give them that peer assistance and peer review to have the last amount of problems that nobody else is going to have to question us about.

MR. STRICKLAND: I noticed Don Saunders has come to the microphone. Don?

MR. SAUNDERS: Mr. Chairman, if I might, my name is Don Saunders. I'm the director of civil legal services for the National Legal Aid and Defenders Association.

And I don't want to jump in very much into this discussion. But I just wanted to say on behalf of our membership that we're very excited about the discussion yesterday, have been working a lot with Randi and OPP on this issue.

We're also working closely with the American Bar Association and its Standing Committee on Legal Aid, which meets next week. And I think they're going to be looking at the whole standards question. So what I wanted to do is offer a collaborative relationship when this discussion goes forward.

One of the issues about Lillian's presentation on peer review, she was developing that from her program. And there's a different dynamic when the main funder of legal services calls something a peer review vis-a-vis a monitoring visit and all those different relationships.

We're very supportive, and I think our membership really welcomes the idea, of peer review. And I would just hope that as we move forward to the April meeting of Provisions, that we can have some good collaborative discussions in working very carefully with the American bar and others on this very critical and important issue.

We certainly commend the board for putting that out there. We're very supportive of it. But we would like to participate with you in partnership as we move toward those goals.

MR. STRICKLAND: Thank you, Don.

Are there any action items?

MR. HALL: There isn't an action item. I just want to, you know, briefly respond to Don Saunders.

I think -- and again, the whole committee hasn't had a chance to discuss this, but at least only briefly yesterday. My whole notion is that, you know, we should move forward in a collaborative way, that we are not the only one who has an investment in this issue, and we recognize the ABA and NLADA as being important partners.

And I think the notion of looking at what other government agencies are doing, et cetera, are things that we can begin to strategize with Helaine about and move with that spirit.

MR. STRICKLAND: Yes, sir. Tom?

MR. FUENTES: Mr. Chairman, I'd just like to commend Chairman Hall. I don't know who all participated in the selection of the speakers that you brought to us, but I thought that was one of the most informative sessions or hour or two that we've had as a board. And it was very helpful. So thank you.

MR. STRICKLAND: All right. Let's -- David, thank you for that report. And I echo Tom's comments about the quality of the people who were talking about quality. I thought it was an outstanding presentation. Let's take up the report of the Finance Committee, to consider and act on its report.

MR. DIETER: Okay. Mr. Chairman, we met yesterday and sort of had a wide-ranging meeting. We have two action items, which I'll take up in order.

First we heard a report on the temporary operating budget and expenses through November 30, 2003, which is two months of the current fiscal year, from David Richardson. And that is on pages 5 through 11 of the board book, for the members who weren't present yesterday at the meeting.

We looked at the budgeting process and the projected expenses over the year and how they compared to the congressional appropriation for management and administration of the budget, and we suggested to David that he report in the future the benchmarks two ways, one in how we're achieving the benchmark towards the budget, and one how we're -- where we are in terms of the benchmark with our current congressional appropriation. And that way, we'd be able to monitor how well we're doing with respect to the spending of the carry-over that we have.

The IG also reported at that time that they would present a plan to review their funding plans and their approach towards their budget carry-over, which has been carried forward for a number of years percentage-wise in a large amount of their budget. And I understand that that's going to be done at the next board meeting.

Regarding item 4 on our agenda, is to consider and act on the recommendations for fiscal year 2004, that's the first action item. And I handed out at the committee meeting Resolution 2004-002, which I think everybody has got a copy of, and I gave Tom and Lillian a copy.

And this resolution would authorize a budget with the figures that are noted here in the resolution part of the -- or the concluding part of the resolution. The only one that I'd highlight is the $14,360,781 for management and administration.

That is the budget figure that we reviewed with David, and I wanted to highlight for Tom and Lillian that we wanted to make everyone aware that in reality, the congressional appropriation that we have for the management and administration line for the current fiscal year is really $13,160,711.

So it's our hope that by passing -- our recommendation is that the board pass this resolution, and with the understanding that Dave will be reporting these benchmarks so that we can track how we're doing with respect to our actual congressional appropriation and our funds available so that we don't get in a situation where we're spending more money than we can support in coming years if our congressional appropriations don't keep up with the pace of the past. And we don't want to get in a situation where we're having to let people go or cut back on programs.

M O T I O N

MR. DIETER: So at this time, then, I guess we'll ask the board to take up action item No. 1, which is to adopt Resolution 2004-002.

MR. STRICKLAND: All right. We'll consider that to be in the form of a motion to adopt that resolution. Is there a second to the motion?

MR. HALL: Second.

MR. STRICKLAND: Any discussion?

(No response.)

MR. STRICKLAND: All those in favor of the adoption of Resolution No. 2004-002, please signify by saying aye.

(A chorus of ayes.)

MR. STRICKLAND: Those opposed, nay.

(No response.)

MR. STRICKLAND: The ayes have it, and the resolution is adopted.

MR. DIETER: The next item that we considered on the agenda was to consider and act on space reallocation options. There were five options presented to us ranging in cost from 12,800 to 96,900. And after a lot of discussion that I think most people were present at, we are recommending to the board that the board authorize the president to enter into a 30-day option with the landlord to explore various leasing arrangements up to 2,251 square feet at $38 a square foot, with the proviso that the build-out costs be borne by the landlord; and that the chairman of the board, together with management, report back to the full board within that 30-day period with the recommendations, if any, as to how they recommend that we proceed; and that the matter be presented to the full board for final decision at that time.

I think that -- does that fairly represent what we talked about, Tom?

MR. GARTEN: Although I provided for some additional items, and that was whatever they came up with, the maximum rental would be $38 a foot based upon the recommendation of 2551, is what my notes show.

MR. DIETER: Oh, I had 2251. The dollar amount was 96,138.

MR. GARTEN: The dollar amount was 96,138, again based, as you indicated, based upon the landlord absorbing the cost of the improvements, which are reflected to be about $95,000; and also based upon negotiating options on the original lease plus the additional space, if possible; and also providing for negotiating a right of first refusal on additional space that might become available.

After all this is done, as you indicated, the board meeting would be called, a telephonic board meeting, to consider what had been negotiated and act upon it at that time.

MR. FUENTES: Mr. Chairman, respectfully, I think a key item that was not stated is that the report to be brought to the board for the full board's consideration, the recommendation should include or must include a justification of staffing plan growth necessity requiring this additional space.

MR. DIETER: Yes. I understood that would be implicit in the proposal. But they do have to present a needs justification in conjunction with their recommendation for the options, if any, that they decide.

And, you know, in deference to management, this is something that arose at the very, very last minute and the figures were only presented during the committee meeting. So this motion to the chair is really in the nature of providing us with more information to justify a decision.

MR. STRICKLAND: Herb?

MR. GARTEN: Just to add this comment, that considerable discussion was had with regard to business discussion or business considerations. For example, the fact that the space might not be available, and that it was important that we reserved the space in addition to the needs that might be established for considering for the future.

Once the space would be sublet to someone else, it might not be available to the Corporation for a period of ten years. So consideration will also have to be given by the board to that factor in coming up with the ultimate decision as to whether to approve whatever is negotiated by the chair and the president.

MR. DIETER: Okay. How do you want us to --

MR. STRICKLAND: Well, we don't have a -- I suppose all that is going to be spread on the minutes. And we don't have a resolution -- at least, I don't think we do.

MR. DIETER: Okay. I'll try to summarize it.

MR. STRICKLAND: Capsulize that. If you want to summarize it. And Herb and Tom -- Herb was the principal mover of that in the committee, as I recall.

MR. DIETER: Right.

MR. STRICKLAND: And Tom also had some comments. So as you frame it, I'm sure they'll help you out if it's not accurate.

MS. MERCADO: We can also have our general counsel.

MR. DIETER: What?

MS. MERCADO: We can also have our general counsel.

M O T I O N

MR. DIETER: All right. Well, the Finance Committee is moving -- submits a motion to the full board its recommendation that we authorize the chairman, together with the LSC president and management, to enter into a 30-day option with the landlord at the current headquarters to explore the feasibility of leasing up to 2521 feet at $38 a square feet -- square foot, excuse me -- for a total maximum rental of $96,938. And there are four lesser options that were presented.

And so we're authorizing you to explore any alternatives below that outside limit, with the understanding that the build-out costs for any new lease or swap would be borne out by the landlord; and that the management also explore with the landlord entering into a ten-year extension of the current lease, or an option to renew for an additional ten years at the expiration of the current lease, which would also apply to any new space that is rented; and a right of first refusal with respect to any new space that might become available during the term of our lease; and that the management report and the chairman report this to the board with a needs and justification presentation so that -- with recommendations, if any, so that the board can make a final decision on whether to proceed further in terms of entering into any contract with the landlord.

MR. GARTEN: I'll second that.

MR. STRICKLAND: All right. Is there any further discussion?

(No response.)

MR. STRICKLAND: All right. Hearing none, let's proceed to a vote. All those in favor of the motion, please signify by saying aye.

(A chorus of ayes.)

MR. STRICKLAND: Those opposed, nay.

(No response.)

MR. STRICKLAND: The resolution is adopted.

MR. DIETER: The other item that we had a brief report on from the inspector general was a status report of the Corporation's fiscal year annual audit.

It's my understanding that annual audit is still in progress because it's awaiting the audit results of Friends of Legal Aid, but that that would not materially affect our own figures in the respect that our audit shows that all of our accounting has been in compliance with generally accepted accounting principles insofar as Len has been able to determine without the Friends figures. And he doesn't anticipate any problems as a result of that further information, but needs that information in order to make a final report.

Item 7 was the report regarding the loan repayment assistance programs and retirement programs. And due to time constraints, we decided to have that presentation to the full board today.

And other than that, there aren't any -- there weren't any other items. I'd just point out that David prepared last night the temporary expenses through December for the current fiscal year, and that information would be available if anybody wants to look at it. So we have three months rather than two months at this point.

I looked at it. It didn't seem that the benchmarks were off except with those items that he had highlighted to us before. But that information is available to anybody who wants it.

MR. STRICKLAND: Yes, Herb?

MR. GARTEN: We also talked about the reports being available -- I think we did -- at an earlier period of time for review, if possible.

MR. DIETER: Yes. I talked to -- well, I guess -- I talked with Helaine after the meeting and also mentioned to David this morning that we would appreciate and find it helpful, if it was possible to do, for the Finance Committee to get the spreadsheets approximately two weeks in advance of the board meeting so that we would have time to review the material before it was replicated in the board book.

And that would still provide us at least a window to get the material to the board a week prior to the meeting, but that would give us time to kind of digest the information so that we don't have to spend quite so much time in the committee meeting exploring the numbers.

And also, that Helaine would review with David if there's a possibility of presenting maybe a summary sheet. It's just management and administration because in reality, most of the other numbers are flow-through numbers, but they tend to confuse or make it more difficult, I think, when we're reviewing those reports.

And then perhaps full reports can be attached as appendices or schedules, and we could concentrate more on looking at the numbers that in reality we need to monitor.

So those are -- I think Helaine is going to do that for us for the next meeting.

MR. STRICKLAND: But those are not action items?

MR. DIETER: Those are not action items.

MR. STRICKLAND: And neither is the report that John Eidleman is going to present. But before we get to that, Pat, do we have a lunch scheduled in our --

MS. BATIE: At 12:00.

MR. STRICKLAND: And it's 12:00. And are they -- I guess the caterers are expecting us to show up at the appointed hour.

So maybe we could agree to shorten the time that we take for lunch, but I would suggest that we probably all need a break now anyway; that perhaps we could shorten -- just go ahead and go to -- recess for lunch at this point and try to keep that to 45 minutes, with the goal of reconvening at 12:45.

Yes?

MR. FUENTES: Mr. Chairman, don't we run into -- by doing that, don't we run into the problem of being posted for 1:30? Wouldn't we do better to continue now and then take our break and come back at 1:30 so that we do what was posted as the time to start?

MR. STRICKLAND: We need Victor to advise us on that. We're going to get him whipped by the Federal Register notice this time, and we're going to do better on that the next time. But give us some advise, Victor.

MR. FORTUNO: If what you're looking at is just the agenda of projected times, that doesn't -- what does govern is the Federal Register notice, which simply has the meeting starting at -- or it started yesterday, was recessed, was reconvened today, and runs through till its conclusion, with a break for lunch.

I don't think that we need to worry about the other schedule, which was not published. I think what governs is we start at 11:00 and we proceed till conclusion, with a break for lunch.

MR. STRICKLAND: All right. Why don't we then take a break for lunch. We'll reconvene at 12:45 or as soon after that as possible, and try to expedite the rest of the meeting. So we are recessed for lunch. (Whereupon, at 12:01 p.m., a luncheon recess was taken.)

 

 

A F T E R N O O N    S E S S I O N

MR. STRICKLAND: Let me call back to order the meeting of the board of directors of the Legal Services Corporation so we can move on through the rest of our agenda.

I think we were at the point in the agenda where Rob Dieter had mentioned that an item that came before the Finance Committee relative to loan forgiveness program, rather than present that to the committee, we decided to ask John Eidleman to present his report to the board.

And we'll call on John to do that at this time. Thank you, John.

MR. EIDLEMAN: Mr. Chairman, members of the -- MR. STRICKLAND: Before you do that, I wanted to recognize the fact -- I don't know whether he's still in the room, But Justice Teitelman of the Missouri Supreme Court was with us for a period of time. Please stand and be recognized, Justice. Thank you.

(Applause.)

MR. STRICKLAND: And also, our nominee to the board, Bernice Phillips from Buffalo, New York. Bernice, would you stand and be recognized?

(Applause.)

MR. STRICKLAND: I apologize for not recognizing both of you before now. That's my oversight, and I hope you won't hold it against me.

John, go ahead with your report.

MR. EIDLEMAN: Thank you. Mr. Chairman and members of the board, Madame President, you heard in September at the Finance Committee board meeting from a number of witnesses that students who graduate from law school typically have anywhere between 80,000 or $100,000 in debt. You also heard that because of the low salaries that legal services programs pay, it's difficult for our recipients to both recruit and retain staff attorneys.

You heard a little testimony about the loan repayment assistance programs, or LRAP programs, and how they have been developed by law schools, legal services programs, and some legislatures to try and offset that heavy debt.

You also heard some testimony that many attorneys who have spent their entire career in legal services who are ready to retire cannot retire because there either are no pension plans or low-funded pension plans.

You were asked at that time to approach Congress for additional funds to try and deal with those two issues. What you asked staff to do was to find out exactly what is the state of debt and retirement programs in our recipients so that you can have the full landscape of what currently exists.

What staff did, and I had tremendous help from Cindy Schneider, who may be with us a little bit later; she's doing some pro bono work and had to be out this morning -- what Cindy and I and others did is we put together a survey and sent it to all of our recipients who are recipients as of January 2004. That's 142 programs. We received 105 responses.

The materials that I have here today are the results of our survey. We asked questions of our recipients: if they had an LRAP program or not; whether they had problems recruiting and retaining; whether they thought if they had LRAP it was a good tool to recruit and retain.

We wanted to know if they had any sense of the staff attorneys that were leaving their program, if they were leaving because of salary issues, and if so, was debt part of that issue.

So the materials I have, the first tab is a fact sheet -- which Cindy was going to go over with you -- that sort of gives you the picture of what's going on nationally in LRAP. The second tab is the executive summary of the survey. The third tab is the survey results, with some figures, some numbers, observations, and also some quotations that we received, comments about the survey.

The next page you'll find the cover letter we sent and a blank copy of the survey. Following that are all the responses, all the comments we received to each question where we asked comments. And the last tab has a number of tables.

The first table, we took all the recipients and broke them down by number of staff attorneys. The first column on the left is up to nine staff attorneys, then ten to nineteen, 20 through 39, 40 through 79, and finally, 80 through 170 staff attorneys.

The figure in each column indicates the number of staff attorneys in that program that responded, and the parenthetical number are the number of attorneys who have outstanding debt.

The first thing I would like to say about the survey is this is not a scientific survey. Not all of our recipients answered every question. In some places, we asked for comments such as, is debt a serious problem? And we got vague answers. Some said serious, some said moderate, some said something we couldn't interpret. So we tried to interpret those figures, those comments, to the best of our ability.

Even though it's not scientific -- Cindy just joined me -- even though it's not a scientific study, I don't think that undermines the validity of the survey. I think we have at this point more information and better information than we've ever had about what staff attorneys face and what our recipients face in trying to recruit and retain attorneys. We also certainly have much better information about retirement programs. I've sort of jumped into my part of the presentation. Cindy was going to lead off with talking about LRAP. If I may, I'd like to turn it back over to Cindy. Do you want to go, Cindy?

MS. SCHNEIDER: Yes. Sure. Thank you, John. And I apologize for being late, but I had another engagement this morning. My name is Cynthia Schneider, and I'm the deputy director of the Office of Program Performance. And I worked with John on this project.

I would like to just give you some background information on loan repayment and assistance programs. Two other major organizations have studied the issue in recent years because it has become such a growing problem.

In 2001, Equal Justice Works, a nonprofit organization, did a survey of third year law students and found that 66 percent of those responding to the survey reported that law school debt prevented them from taking a job in the public interest or a government job.

Last year, the ABA'S Commission on Loan Repayment and Assistance Programs issued their report on LRAPs and their recommendations on what could be done about the issue. And in their report, they stated that the average debt load of a law student is $80,000 when they graduate from law school.

Now, there are some programs available that have attempted to meet the problem. And these programs are limited, but I just wanted to briefly go over them. Some law schools, as well as other entities, offer fellowships for graduates who are going into legal services work or other public interest-type programs. These fellowships include some that you may have heard of: the Skadden fellowship program, which is sponsored by the law firm Skadden Arps, that's just one of them.

Recently I was in New York, and I heard that the New York Bar Association has begun to sponsor five fellowships a year to the tune of $5,000 per new lawyer. And in New York, the average debt load of the graduates who applied for the New York fellowship was $128,000.

Some other postgraduate debt relief programs include programs offered by law schools. The ABA, in fact, is pushing law schools to offer some type of loan repayment assistance program to their students who express an interest of going into legal services-type work. Fifty-six law schools have such programs, but many of these are very limited.

Some states -- and in the materials, I've listed them; they include Arizona, Florida, Maine, Maryland, Minnesota, New Hampshire, North Carolina, and Texas -- have sponsored some type of loan repayment assistance program with state funds. Most often, these are with IOLTA funds.

Then we have a program that was begun by the Massachusetts Legal Assistance Corporation. And this is a nonprofit group that was established by state law in Massachusetts to fund civil legal services. And the Massachusetts IOLTA money is distributed by Mass Legal Assistance Corporation.

And what they've done is established a loan forgiveness fund with their IOLTA grants. It's voluntary on the part of their grantees. But IOLTA monies can be used to make loans to their grantees' employees who have student debt. And these loans then are forgiven after a certain number of years.

But the new -- the young lawyer, the new lawyer, has to remain with legal services for a certain number of years for these loans to be forgiven. And what is nice about this particular program is that monies from this loan forgiveness fund is not taxable to the employee.

Several other states or organizations that distribute IOLTA funds have established these loan forgiveness funds as well with their IOLTA grants.

And finally, many of our LSC grantees have created their own LRAP programs. This is what John will report on and what we've seen in the -- found through our survey.

These LRAP programs that our grantees have, monies from these programs that go to the employee, they are taxable income to the employee.

Nevertheless, despite, you know, this variety of loan repayment assistance programs, student debt is still a major factor in new law graduates taking -- going into legal services work or staying with a legal services program.

In your materials, and after our presentation I'll pass it out, we had a chart -- or maybe John can do it now; thanks -- a chart of the average -- or entry level salaries of our grantees.

And the majority of the entry level salary falls in the $28,000 to $40,000 range. So we still are certainly not competitive with the private attorney world, and this salary range prevents graduates with high debts from taking -- going into legal services work.

The final point, just as a point of reference, this is something you may be interested in. The law, federal law, allows federal agencies to establish programs under which they may repay federally insured student loans that their employees have incurred.

These loan repayment assistance programs that a federal agency may establish is done with their monies, their budget -- it comes out of their general budget -- and there's no specific funds allocated for this program. It's purely voluntary on the part of the federal agency.

I think when I got here, John was beginning to describe how our -- how we conducted the survey. And now I'll turn it back to John.

MR. EIDLEMAN: Thanks, Cindy. Some of the conclusions I think we can draw from the survey is that based upon the responses we got, about a third of all staff attorneys in our recipients have debt that they must pay off.

If you look at the chart that I've attached, some programs, everyone on the staff. There's one program, there's seven staff attorneys and they all have debt. Some of the larger programs, half the staff are faced with debt. So that's one conclusion.

Out of the 105 responses we received, 35 of our recipients have some type of LRAP program. We asked those 35 programs whether or not they found that having LRAP was beneficial in both recruitment and in retention.

According to our responses, it looks like overwhelmingly the programs think they're helpful. Seventy-seven percent of those respondents thought it was helpful in recruitment and 80 percent retention. The theme we kept hearing over and over again was low salaries. Low salaries have a tremendous effect on both recruitment and retention.

The LRAP program is sort of an offset to one of the many burdens that a young attorney takes when they come to work for legal services. So our recipients see having an LRAP as a benefit they can offer, and it makes them much more competitive with other governmental agencies.

We were also told that having an LRAP allows staff attorneys who have been there for a number of years to stay for a little bit longer because that one burden is being ameliorated.

We then asked all of our recipients, both those with and without LRAP, whether or not they had problems recruiting staff attorneys. We found that about 65 percent of them said they do have problems with recruitment.

We then asked whether high debt was an impediment to recruitment. About 57 percent of those responding thought it was a serious adverse effect on recruitment, about 14 percent said they didn't think it was adverse to recruitment, and about 26 percent said it had a moderate effect on the recruitment efforts.

We then asked whether or not there were problems with retaining staff attorneys. We were told about 63 percent of the respondents thought it was -- they did have problems retaining staff. About 33 percent of those said it was a serious problem, and 27 percent said it did not have a serious impact.

I think one conclusion we can draw from this is that programs that currently have LRAP think much more strongly that they are beneficial for both recruitment and for retention.

We then asked, of those attorneys who are leaving programs, are they leaving because of low salaries? We heard that about 21 percent of those leaving are leaving because of the salaries, and of those, about 12 percent are leaving because of the low salaries and their outstanding student loans.

We then asked questions about recruitment of minority candidates. Here, about 72 percent of the programs said they have problems recruiting minorities, which is higher than the overall recruitment figure.

But when we asked whether or not high student debt had an adverse effect on recruitment, it was a little bit more mixed. About 33 percent said it had a serious impact on recruitment of minorities, where 37 percent stated that it did not have a serious impact. So I'm not sure what that means except that recruiting of minorities is a much more complex issue.

We then asked questions about retirement. And it was a little bit surprising to see of those who responded, about 96 percent of those recipients do have some type of retirement plan. The 403(b) seems to be the most popular, with about 52 percent, and the 401(k) is the second, with about 20 percent, 20.8 percent.

Most of these programs, most of these plans, do have contributions from both the employees and employers, but only about 41 percent is there a match made by the employer.

I think some things we can conclude here is that there's a real generation gap in our programs. Very many of the recipients feel that they can't do both the LRAP and the retirement, so they have to make a choice. And very often, for retirement purposes, younger attorneys don't contribute to retirement programs. Maybe two factors: One, they have high student debt; and the other, when you're young, you don't think about retirement.

Some programs indicated because of the inadequate retirement funds, staff cannot retire. One example, one comment we received was that after 20 to 25 years in practice in their program, the retiring staff attorney would have no more than one year's worth of salary to retire on.

I think we can conclude from this survey that, first of all, low wages, low salaries, have a tremendous effect. Second, high school debt is an exacerbating factor on those low salaries.

Yesterday we heard quite a bit about assessing quality. And I fear that if something is not done about the debt that students face, we're not going to have quality personnel come in, so the clients will be deprived of the best attorneys.

We also heard this morning about the fine work that's being done to try and have successors in legal services programs. But if we don't bring in new blood, we can't attract new attorneys, we're going to have the same program.

One of my colleagues, Mike Genz, told me yesterday that he was visiting a program recently, and I believe three or four of the staff attorneys he talked to said they had to move in with their parents in order to survive and continue doing legal services work. So this is quite a profound example, I think, of what young staff attorneys face.

Thank you.

MR. STRICKLAND: Any questions for either Cindy or John? Go ahead, Tom.

MR. MEITES: I have a short question. You said that there is a program where federal agencies could use some of their funds to repay the student loans of their employees. Are we a federal agency that is eligible for that?

MS. SCHNEIDER: No, we're not.

MR. MEITES: All right. Is there anything that you see that the Corporation can do to assist our grantees in either establishing or funding these LRAPs? MR. EIDLEMAN: Management hasn't formed an opinion because we were asked merely to get some information and bring it back. When the management team talked with the president, we would need more time to talk that over and come back with a recommendation, if that's your desire.

MR. MEITES: Well, I'm really curious because we're at one remove. Our employees have retirement plans.

MR. EIDLEMAN: Yes.

MR. MEITES: And we're comfortable with that. We're basically sitting here saying that our grantees should do more for their employees. Well, that's gratuitous on our part if we can't help them to do it.

MR. EIDLEMAN: Correct.

MR. MEITES: So my sense would be, it would be helpful if there -- you can tell us if there's you think we can do, or maybe there's nothing and we should just stop pestering people about it.

MR. EIDLEMAN: Well, I would defer to the president. I don't want to speak out, because we haven't had a chance to discuss this. In the materials, you see some of the comments. There are suggestions made about asking for additional funding, asking for a line item. But I'm in no position to say that's where we want to go as an organization.

MR. STRICKLAND: Yes. Herb, did you have a -- Herb or David?

MR. GARTEN: You referred to this Massachusetts legal assistance program. What distinguishes their program to create a situation where the repayment is not taxable?

MS. SCHNEIDER: This is what they chose to do, how they set it up under the Internal Revenue Code, how they set up their loan forgiveness fund with grant funds, that it resulted in nontaxable income to the employee.

MR. GARTEN: Well, I'd be interested in knowing the background or IRS rule to that.

MR. EIDLEMAN: We can certainly give that to you. It's my understanding that if the payment comes from your employer, it's taxable; if it comes from another entity, it's nontaxable. And there are a number of -- Massachusetts and other states have gotten opinions from experts, but not from the IRS, on this.

MR. GARTEN: Well, whatever opinion it is.

MR. STRICKLAND: David, did you have a question?

MR. HALL: Yes. I guess it's not so much a question but more a comment. I see the report as the kind of first step down a path that we as a board were interested in, and that what we have now are some evidence that indicate that at least people in the field, our grantees -- for the most part, though the information is not totally one-sided by any stretch of the imagination -- but there seems to be a sense from the standpoint of our grantees that there's an interest and there's a need in these types of programs.

To me, there's a whole nother step, even taking this date at face value, that we have to look at, and that is: If this need is real, then how do we go about address it, and what are the implications of that?

Because on one level, especially in a period of tight funding, if we embrace this, we may be making some other tradeoffs in regards to increasing attorneys versus holding on to the ones that we already have.

And so just speaking personally, I think it's an issue that we have to keep looking at. It's also an issue that the Provisions Committee has expressed some interest in being involved in these discussions.

And I think that this is probably just a preliminary step in an ongoing direction that I believe the board needs to pursue, and certainly as chair of Provisions, I think it has some implications to some of the things that we are looking at in regards to quality and other issues.

So I guess I'm just urging us, even with, I'm sure, a lot of questions that all of us may have about this report, to keep this issue on the table. And I'm also suggesting that whatever structure we create to continue the dialogue, that I would like to see the Provisions Committee involved in it.

MR. STRICKLAND: Herb?

MR. GARTEN: Yes. I think -- and I agree with everything that you've said. And I would like to suggest that we explore the possibility -- what I heard was that there are separate entities set up to make these awards that create a nontaxable situation on repayment.

We have an organization in existence, the Friends of LSC. And possibly that organization can be used to solicit funds from foundations for this very, very worthwhile project.

So I would like to see us explore such a possibility or something similar to it. And I think it has great possibilities.

MR. STRICKLAND: Excellent suggestion. And since Friends of LSC -- its name alone suggests that that may be the place for us to start in terms of a parallel organization.

Any other comments? Lillian? Tom?

MS. BeVIER: It seems -- I think it's a very pervasive problem that you've identified, and I appreciate your bringing it to us.

What is of concern to me at this point is I think your suggestion, Herb, is a wonderful one. But in terms of the board, you seem to have suggested, well, we need to ask for more money. That is one alternative, that we just create an additional request, that is, to help us help our grantees.

The other thing I think we need to face is implied by what David said, and I think maybe explicitly. If we're going to do this with the present funding, which I think is the much more realistic thing if we can't get help from Friends of Legal Services, we're going to have to make some decisions about what goes because we can't have this and what we presently have in terms of program design and other things.

So I would like staff, Finance Committee -- I'm not sure whose task it would be to think through what those tradeoffs might be so that we can be clear. I mean, it's not the only possibility of funding, but it is certainly one of the ones that I think is implied in here, is that maybe we ought to readjust our priorities.

MR. STRICKLAND: Tom?

MR. FUENTES: I certainly concur with the remarks of the vice chairman. I think that this problem is one that is affecting us, but it is so much larger and so much more pervasive in so many elements of legal training and preparation, and we need to engage others to help us.

I trust this is a public document now that we have it. I would think that a document like this ought to be sent to the chairman or the head of -- the deans of law schools across the country and express from this national organization our concern.

I sit as the chairman of the board of a law school, and we hear reports at all of our meetings about this kind of debt burden. The $80,000 figure we've mentioned here is, frankly, a low figure for our entire student body and alumni graduating.

I would like to suggest that a letter of plea and of sharing this report be sent to the deans of -- or at least the chairmen or the deans of law schools across the country. Maybe we could engage them in a dialogue that would get the conversation going.

MR. STRICKLAND: Excellent suggestion.

Maria Luisa?

MS. MERCADO: I guess in looking at some of the choices that the vice chairman has stated is that in effect, we're looking at sort of parallel issues that we're going to have to deal with.

One is the issue of the huge debt that these students have, and therefore not being able to recruit new lawyers into the legal services community. And, of course, that correlates with the drain of the leadership and who's going to come after us.

MR. STRICKLAND: Right.

MS. MERCADO: And then you have the issue of extremely low salaries to begin with, which also deals -- aside from the debt that they have, also dealing with that.

And I don't know that it's too different or they're all sort of combined, and how do you get them up either to a salary that can deal with the debt that they have, or either helping pay their debts since the salary isn't increased.

Because we've done the comparative studies -- the ABA has done the comparative studies -- that our staff and attorneys are woefully below any other public sector, whether it's public defender or city attorneys or county attorneys or anybody else. Definitely much lower than the U.S. Attorneys, assuming that we were considered a federal agency. We're not anywhere near that amount.

And so that there are a lot of issues. And understandably, knowing the tight constraints with the budgets that we have, trying to figure out the way that we can retain those lawyers and recruit new lawyers so that we can hopefully service more people in the process.

And I think it's a much more greater thing to do than just saying, we're going to cut some of the service that legal services needs to do. I mean, we've talking about quality and having peer review. And unfortunately, all that requires somebody with some time and money and resources to fund it.

And certainly, the work ahead of us, especially the provisions committee, it's going to be a long one. And hopefully, with the help of the NLADA and ABA, we can come up with some answers. And that will require some partnerships with outside foundations or outside corporations.

MR. STRICKLAND: All these are excellent suggestions, and I hope that our new president is making some mental notes on these, or actually some written notes.

Oh, sorry.

MR. DIETER: I've got a question. I guess on page 2 of the executive summary, on the salary issues, I want to be sure I understood. The statistics there said that 21 percent who leave do so because of low salary. So out of a hundred people, that would be 21 people.

And then there's the next paragraph here, 12 percent -- I understand that of that 21, 12 percent. So that's roughly two people out of a hundred.

MR. EIDLEMAN: Correct.

MR. DIETER: More people are leaving because of low salaries than loan assistance.

MR. EIDLEMAN: Yes.

MR. DIETER: And I don't want to diminish, I guess, the magnitude of the problem or not. But I guess, you know, as we look at it in terms of budgetary priorities, to some extent, I mean, the report shows that Lillian's concerns were answered, at least under the existing framework, where the grantees were asked, if we were going to institute this and it would cut your grant, would you be in favor of it, seeing that that was sort of like 95 percent were against doing something like that.

And so it is a problem. From my point of view, where does the responsibility lie and the amelioration best addressed? And just to enlarge the discussion a little bit, in looking at the ABA report, the report doesn't address any efforts towards law schools, what they can do to reduce tuition and what they can do to counsel their students about the realities of incurring this kind of debt with not having a realistic expectation of how you're going to pay it off; and whether or not people are entering law school with undergraduate debt that is putting them at risk, and whether it might be advisable to work a year or two to try to reduce that before you go in and before you know how you're going to perform in law school, et cetera.

But there also is another differential, which is that the average debt from a public law school is considerably less than the average debt carried by people who graduate from nonpublic, and then whether you're a resident or a nonresident. So there's a lot of -- there are a lot of factors that go into this aggregate $80,000 figure.

And so there is this problem. And whether we are the appropriate one, the most effective one, to address it, or whether Friends might be a better and more successful entity to try to address it, you know, is a question that we need to look at.

And just the question of the tradeoff between whether we're going to spend money to try to get money to the programs where they can make the decision whether, for example, retirement is more important to their employees than a loan assistance repayment program, or whether they'd rather just try to increase salaries -- all of those kinds of choices and flexibility is something that I think if we go forward on this issue, we need to really, really look at and not just get a myopic view of, this is the best way we can do to spend money to support the compensation problem that employees face.

MR. EIDLEMAN: I think this is an extraordinarily complex issue. And I'm not advocating that we just ask for money. I think we need to work with law schools. I think we need to work with state legislatures. I think we need to work along with our recipients.

I think it would be important for every member of the board and us as an organization to speak about this issue so that everyone is aware of it. And I think it's going to take a lot of thoughtful people coming together to figure out what can be done, and what we can do and what others can do together in collaboration.

We mentioned the Massachusetts plan. That's one possibility to be looked at. I think, Mr. Dieter, when our recipients addressed that issue, I'm not sure they understood the question we were asking.

To set up a plan like Massachusetts wouldn't mean that we would reduce anyone's grant; it would mean that they would voluntarily say, hold some of this money, but give it to us for this one purpose. And the benefit there is that the staff attorney doesn't have a taxable event.

But I'm certainly hoping that, as Mr. Hall said, we continue to talk about this issue and figure out what can be done.

MS. SCHNEIDER: On the issue of the law schools' role in causing this debt, at one time both John and I staffed John Erlenborn, who served as a liaison member of the ABA's Commission on Loan Repayment and Forgiveness.

And I remember one commission meeting where the issue of should the commission make a recommendation as to the whole tuition issue? And they chose not to get involved in that.

But the ABA's report does make a recommendation as to financial planning, debt counseling, to be provided by law schools, or they suggested law schools do engage in that with their students.

The ABA -- the commission also put together a tool kit for states that are interested in pursuing legislation on how state funds can be used to set up these loan forgiveness programs. And the ABA commission's report, as well as the state tool kit, it's all available online.

MR. DIETER: Yes. Because the ABA report shows that the cost of living went up from '92 to '02 28 percent, but the cost of tuition at public law schools went up 76 percent. And that's what's driving the --

MR. MEITES: You're doing yourself in.

MR. DIETER: I know I'm doing myself in on some level. But that's a whole nother issue, I guess.

But informally talking to some students, for example, to put another twist on the dimension, I was asking, you know, just generally what they think and what their ideas are because we have set up one up and we're working with the bar, et cetera.

And, you know, they said, well, what do you do with someone who got into a school that offered them a free ride, a full scholarship, but declined to accept at a higher tier school where they were going to have to take out student loans?

And there's all kinds of choices that are made along the way that get us to this point. And I guess in my own mind, I'm trying to -- my bias, I guess, is to try to see what we can do to raise the salaries as much as possible for everyone, and have the choices be made at that level, rather than really try to steer us towards this, that might impact our ability to increase salaries.

I'm sort of thinking out loud about that.

MR. STRICKLAND: Herb?

MR. GARTEN: This is far better than raising salaries. You raise the salaries, 30, 40 percent of it is paid out in taxes. And if you're going to do it in a way that's not going to be taxable, you're going to get more for your dollar.

MR. DIETER: Well, I'm just talking whether we should engage in that or whether Friends ought to be the entity that concentrates on that.

MR. GARTEN: I think we have to investigate this, and I think --

MR. DIETER: Yes.

MR. STRICKLAND: David?

MR. HALL: Yes. For the sake of, you know, not being repetitive, I think all of these questions are valid questions and this is a very complicated issue.

But none of that takes away from the fact that this is a compelling issue. It's not just a compelling issue for us, I agree. It's a compelling issue for the whole industry that we are a part of.

But it affects us in a very unique way because we are serving a population that is going to be more greatly affected by this problem than others. And one has to do with the salaries themselves, but it is also a part of the fact that students coming out of law school, regardless of what may have generated those, you know, high loan bills -- and many of us who are law professors around this table are in part responsible for that because the choice could be asked, are we willing to reduce our salary so that we could correct that problem? And I think we would get the uniform answer that we would get from the people in the field around that.

MR. DIETER: Do you want a second on that motion?

MS. BeVIER: I would say look at Friends of LSC.

MR. HALL: So I just think this is a compelling and prime issue that we have to be involved in, not alone but with other individuals who are concerned about it. And there are a lot of different avenues that have been pursued. I mean, that's what the report indicates, that there are different ways to do this. And we certainly can't, with the information we have now, make a decision even close to that.

But I do think this says to us that this has to be one of the issues that's on our agenda and that we give some serious investigation and thought to.

MR. STRICKLAND: Absolutely. Yes?

MS. BeVIER: Just one thought with respect to the law schools. I think that tuition-lowering is a nonstarter. Law schools are generally pretty aware of this problem, and I think willing to work with people and develop ideas. It's not something that is not on the radar screen of the deans because it's very much on the minds of their students.

And so when you're thinking about the avenues with respect to law schools, just think of other things than asking them to reduce tuition, especially because in these days, that's -- they're getting less funding from states and they're getting less funding from central universities. So they need the tuition.

MR. DIETER: If I could just add one -- on that, I think the motivation for law schools to do this is it's a recruiting tool, as I understand. And students are looking at this as a reason to choose one school over another.

And so I think that law schools are going to be very responsive, you know, to this and really are sensitive to them in terms of, you know, having the information and being very aware of the issue.

And as I said, I don't mean to, you know, diminish the problem. But it's a matter of where can the problem be addressed most effectively, who should be involved in it, and what should our appropriate role be in that solution?

MR. EIDLEMAN: American University here in Washington has a program now where they'll pay the entire fund, the entire amount, for the student, if they promise to go into legal services. There's only a few students they will fund. But they look at the students' background, what they've done in undergraduate school, and they will actually pay the entire tuition for them for the three years.

Now, that's rather controversial because how do you know when a person is going to law school whether they actually will fulfill that obligation? But those are the kind of things that are being thought about.

MR. STRICKLAND: All right. Thank you very much, Cindy and John, for your report.

Don, did you have any comment on that subject? Sorry, I didn't mean to exclude you.

MR. SAUNDERS: Just one very briefly. We certainly appreciate -- we were one of the ones in September that asked you to look at this, and we appreciate the work you've done and the energy you showed toward it.

I won't take your time now to respond to Mr. Meites' question. But there certainly are a number of strategies. For example, we are working with the ABA to try to get legal aid lawyers eligible for the kind of federal agency relief that you heard specifically -- so there are some specific agenda items that the Corporation could embrace, including the law school one.

But I could not agree more with Professor Hall that this is an important issue and one that you should look at. And there are some specific strategies, although it's a very, very complex issue.

But we would very much like an opportunity to get into some detail about what's going on. And certainly LSC, as the leading funder of legal aid in this country, needs to be a strong partner in what is a really combined and complex effort.

MR. STRICKLAND: Thank you. Thank you very much, Don.

Mr. Whitehurst, please come forward.

MR. WHITEHURST: Just real quickly, I just wanted the board to know that although the commission, the ABA Commission on Loan Repayment, has finished its work and rendered its report, that function has been delegated now to SCLAID.

And so that is continuing. And, in fact, we have -- I have appointed virtually all of those who were on the commission to serve on the committee so that their expertise will continue in this effort.

And I will tell you that it is a priority of SCLAID, and hope that it will continue to be a priority of this board, and look forward to working with you on that. But we will continue our efforts and will be available to work with you on it.

MR. STRICKLAND: Thank you, Bill.

MR. GARTEN: Can I ask --

MR. STRICKLAND: Yes, sir. I'm sorry, I didn't realize there were more questions. Go ahead.

MR. GARTEN: Bill, do you think there would be any value in setting up a joint commission between LSC, NLADA, and SCLAID rather than working independently?

MR. WHITEHURST: Well, in fact, he just -- John just leaned over and asked me whether they could have a liaison to this. And absolutely. And we will work however you want to work on it because it definitely needs to be a collaborative effort.

A lot is going on in this area, and there are bills, as you know, in the Senate that talk to this. There are law schools. This really started at Yale. Yale was a major beginner of this loan repayment idea. It started, really, in the law schools. The law students have taken over a lot of it.

At the University of Texas now, it's on the dean's agenda. We don't have any solutions for it, but I will tell you it is something that is discussed on a regular basis now. And a lot of that impetus is from the students.

And so I think a lot is going on, and it would be helpful to work together on it so that we're not reinventing the wheel. The commission did -- I don't know if any of you have had the chance to look at the work that the commission did. But they did a tremendous job in developing this report.

The sad -- what we didn't want to happen was for the report to come out and then nothing continue through the ABA in implementing it. So the implementation stage will continue through the SCLAID committee, and we'd love to work with LSC on it. And I will be in touch on that.

MR. STRICKLAND: On the subject of working together, perhaps we could communicate after the meeting about a liaison person from LSC, whether it should be someone from board or the staff or both.

MR. WHITEHURST: Yes. Whatever you want.

MR. STRICKLAND: And the same with respect to NLADA, and we can try to pull that together. MR. WHITEHURST: Yes. However you want to do it. We're very open to that and --

MR. STRICKLAND: All right. Let's talk about that. I don't think we can try to resolve that right this minute at the board meeting.

MR. WHITEHURST: Yes. I just wanted you to know that it's ongoing, that it's not stopped with the commission report.

MR. STRICKLAND: Thank you very much.

All right. Let's move to the next item then on the agenda, which is: Consider and act on the report of the Ops and Regs Committee.

MR. MEITES: Mr. Chairman, we had a very brief meeting this morning, at which we considered our one action item on the agenda. And we determined that now that we have a president, that it would be best that the question of not just the treasurer's reporting lines, but indeed the entire organizational chart, be referred to the president since, as we understand it, in the first instance it is the president's prerogative to determine the organization of the staff.

The one caveat is that if in fact the president believes that there's changes needed in the responsibilities of the various officers and/or new officers need to be appointed, that is for the board.

And so we have determined that we would ask the president, when she has a clear view of the staffing arrangements that she chooses to make, to report to our committee as to what those arrangements are.

But I would like to remind the board that at our November meeting of our committee, we determined to defer further consideration of questions regarding pending regulations until the new president is in place.

And in particular, our committee at the November meeting had scheduled a discussion on the questions of group representation and retainers, which we determined to defer until the new president has a chance to meet with staff on these areas and express management's position.

We would hope that by the April meeting, the president and the staff is prepared to resume discussions with our committee on those two issues.

MR. STRICKLAND: No action items, then?

MR. MEITES: That is correct.

MR. STRICKLAND: Any questions of Tom Meites on this report?

(No response.)

MR. STRICKLAND: Thank you, Tom, for your report.

And let's move on, then, to: Consider and act on the report of the board's Search Committee for LSC President and Inspector General. It's really just the inspector general at this point.

We had such an outstanding success on our first go-round that we're going to get about the task of our search for inspector general. And we've decided to proceed along the same lines, that is, to -- and I think most all the board members were present when we had this discussion.

But it's our intent, and our committee recommends to the board, that we engage the firm of Heidrick & Struggles -- I don't have a number to give you at this point, but we do have an adequate budget in place for this search -- but to engage Heidrick & Struggles to conduct a professional search for us and proceed along the lines that we did for the presidential search, that is, to determine a number of candidates, narrow the field, and make a selection.

We don't have a particular timetable, but we would seek your authorization to -- well, I would make a motion, then, on behalf of our committee that the board authorize the search committee to engage Heidrick & Struggles to commence the search process for us.

M O T I O N

MR. FUENTES: I would so move.

MR. HALL: Second.

MR. STRICKLAND: Any discussion?

(No response.)

MR. STRICKLAND: All those in favor, please say aye.

(A chorus of ayes.)

MR. STRICKLAND: Those opposed, nay.

(No response.)

MR. STRICKLAND: And that resolution is adopted. And that completes that report of that committee.

No. 18 on the agenda is a resolution on proposed -- a proposed resolution on board member compensation. That's page 100 in your agenda book, Resolution 2004-001.

I will try to explain that resolution, and if I fail, I'll call upon someone with more expertise to lend some assistance. But a couple of reasons for the resolution.

One is that there are a number of instances where board members are called upon to attend functions to represent the Corporation officially. You've heard some examples of those today, where Mike McKay has spoken to a couple of organizations officially representing the Corporation, and in addition had to prepare for that and so on.

And there are other instances where a board member may be called upon to do that. So we wanted to clarify the circumstances under which a board member could receive a meeting fee.

And the other purpose of the resolution is to clarify the basis upon which meeting fees are determined. As I understand it, the computation for a member's attendance fee is 1/260th of the salary of the president of the Corporation.

And we're not trying to change our compensation; in fact, it specifically says we're going to leave it alone. But we want to clarify the basis for the compensation so that if it's something -- and I might tell you that it's about 12 or 13 years out of date.

But -- in other words, the current compensation as stated in the resolution is $320, and the maximum, if you computed 1/260th, is $490. Is that correct, David?

MR. RICHARDSON: That is correct, sir.

MR. STRICKLAND: So we're not seeking a raise; we're simply trying to clarify the basis upon which members' attendance fees are determined so that it's in our official resolutions, and to authorize certain other instances where board members who devote time to official business of the Corporation can receive the meeting attendance fee for doing so.

And it's quite common that some of those instances end up taking an entire day of the board member's time. Another example would be David Hall addressing the occasion next Friday. That's certainly an official function for him to do that, to represent the board. And that would be an immediate instance where I see that that would apply.

M O T I O N

MR. STRICKLAND: So I would move the adoption of -- just in case there's some discussion here, I'd move the adoption of Resolution 2004-001 at this time.

Is there a second to that?

MS. MERCADO: Second.

MR. STRICKLAND: Is there any further discussion or questions? Yes, sir?

MR. FUENTES: Mr. Chairman, on the first page, item No. 4, "Meeting with a member of Congress and/or his or her constituent as requested by the member." That is the member of Congress, not the member of the board?

MR. STRICKLAND: Yes, it is. Yes. That is correct. I must say I had that experience recently, where I was requested to meet with a group of growers relative to some issues about our grantee's representation of migrant farm workers in south Georgia.

It's not the first time we've heard about that issue. But this rose to the level of one of our U.S. senators addressing a letter to me asking me, not somebody designated by me -- maybe because he knows me and he decided to turn the heat up a little bit, but -- and because I live in the state where the issue arose.

But that involved a briefing by John Eidleman and Cindy Schneider in advance of the meeting, and then John came down to Atlanta and we met with the growers. So that's another instance where I think other board members may be asked -- for example, if a congressman or a senator wants to go to a migrant farmworker program in your state and observe some things there, that a board member in that state or from a nearby state might be asked to join that activity.

So we decided to add that to the list. And you're quite right, it's at the request of the member of Congress, not the member of the board.

So any other questions concerning that resolution?

(No response.)

MR. STRICKLAND: All right. Hearing none, I would entertain a vote, then, at this time. All those in favor of Resolution 2004-001, please signify by saying aye.

(A chorus of ayes.)

MR. STRICKLAND: Those opposed, nay.

(No response.)

MR. STRICKLAND: The resolution is adopted.

Now, you were handed a copy of a resolution that the previous board used relative to delegating to the chair the authority to make an appointment to the board of Friends of LSC.

The reason why this is on the agenda is that the term of office of Jack Martin, a member of the Friends board, has expired. And I believe that he has indicated -- he's the former general counsel of the Ford Motor Company, now retired. And my understanding is that Jack is interested in continuing to serve.

So the net effect of this resolution is likely to mean that if you delegate that authority to me, as was the case with the previous chair, that I would end up appointing Jack Martin, or nominating him to be elected by the board of Friends.

But on that general subject, we were talking at lunch about the makeup of that board and whether -- for example, I don't think there are any women on that board. So I think we need to use -- while we don't have authority to appoint more than one person, that we could use our powers of persuasion to convince the board of Friends that they should consider either enlarging the board or, if any members' terms have already expired, to make an appointment to provide some diversity on the Friends board, is the ultimate goal here.

But the immediate -- that's just an editorial comment. But the immediate item for us to consider is this resolution. Did everybody get a copy of this? It was handed around by Vic a moment ago.

M O T I O N

MR. STRICKLAND: This is Resolution 2001-009. And I would move the adoption of that resolution.

MR. DIETER: Second.

MR. STRICKLAND: Any further discussion on that?

MS. MERCADO: You will just amend it to have it dated for today. Right? Instead of 2001, we would --

MR. STRICKLAND: Oh, yes. This is just the form --

MS. MERCADO: This is a format, so that just --

MR. STRICKLAND: -- the form of the resolution. But it would be --

MS. MERCADO: So whatever number we are.

MR. STRICKLAND: -- it would be the same resolution, but it would have -- you're right. It would not be this number. We'll give it the correct number. Vic will tell us the correct number in sequence for our 2004 resolutions.

But the motion is to adopt this form of resolution, but current terms.

MS. BeVIER: And also in substance.

MR. STRICKLAND: Beg pardon? Substance and form of the resolution. You're right. I got you.

MR. FUENTES: Mr. Chairman?

MR. STRICKLAND: Yes, sir?

MR. FUENTES: A very small matter. But in earlier resolutions that we have done in this meeting, we refer to you and your office as chairman. And then we see here a resolution that refers to you as chair.

A chair is a piece of furniture, and a chairman is a presiding officer. And I should like the resolutions of this board to refer to granting authority to a human being, not a piece of furniture. So I should like to see the word chairman always used in our board resolutions.

MR. HALL: Could I ask -- and it's another small piece -- that especially since we just talked about diversifying, that it be chairperson, since we may end up having both men and women in that role -- I mean, not necessarily as it relates to you, but I think as we --

MS. MERCADO: We just always had it as chair, because it is recognized by a lot of people.

MR. HALL: But since we're trying to get away from furniture to people, then, you know, let's --

MR. STRICKLAND: Or you can go to chairwoman if we had a chairwoman.

MR. GARTEN: I would suggest we leave it to the discretion of the chair.

MR. STRICKLAND: I will accept that. And in my -- I'm not trying to be difficult to deal with. But I think we just had some business cards made up for me that say chairman, board of directors. I may not use very many of them, but I think we've already had those made up. Anyway --

MS. BeVIER: When we get a person in the chair, we will change it. We've got Frank Strickland now.

MR. HALL: So that tells you you are furniture, then. If we don't have a person in there, we must have an object.

MR. STRICKLAND: All right. We must be getting late in the day.

MR. HALL: I did have another comment in regards to this.

MR. STRICKLAND: Yes?

MR. HALL: We've voted on this and so it's -- I assume --

MR. STRICKLAND: No, we haven't voted. I was getting ready to bring it to a vote.

MR. HALL: Okay. Why don't you do that. I'd like to raise something after we vote.

MR. STRICKLAND: I wanted to call for a vote on this resolution. And I think we'll worry about the exact language. But the substance and form of this resolution would be to delegate -- as we did with the previous chair, to delegate to the chair the authority to make an appointment to the Friends board.

So all those in favor of that resolution, please say aye.

(A chorus of ayes.)

MR. STRICKLAND: Those opposed, nay.

(No response.)

MR. STRICKLAND: And the resolution is adopted.

Go ahead, David.

MR. HALL: Just a point of inquiry. Is there a member of this board who sits on the Friends board?

MR. STRICKLAND: There is not.

MR. HALL: I think that's a matter we need to consider in the future as openings occur. Because I would imagine that in the beginning, when it was created, there was that connection. And now, because of changes in this board, that connection doesn't exist.

MR. STRICKLAND: That's correct. Tom Smegal, a former member of this board --

MR. HALL: Exactly.

MR. STRICKLAND: -- was on that -- and still is, but no longer a member of this board.

MR. HALL: But he's no longer on this board.

MR. STRICKLAND: We did have that discussion during lunch. Were you at -- you might not have been at our table.

MR. HALL: No, I wasn't.

MR. STRICKLAND: But it did come up, and we're certainly about the business of making that happen, to the extent that we can make Friends do anything.

MS. MERCADO: And also to the extent, as far as the diversity issue, not only as to gender but as to other representation. Because there isn't any of anybody else. And I think that the chair or chairman took all those into consideration in discussing with the board of the LSC Friends.

MR. STRICKLAND: Yes. I consider all those folks friends, in the literal sense. So I will talk to them about that.

MR. FUENTES: Mr. Chairman, how many members sit on that board?

MR. STRICKLAND: I don't know.

Vic, how many members are on the Friends board?

MR. FORTUNO: The board consists of six members. The members are Alex Forger, Tom Smegal, Jack Martin, David Richardson, myself, Vic Fortuno, and Hewlett Askew, Bucky Askew, who used to serve on the board of directors.

And we did at the very outset have two sitting LSC board members, and those were Tom Smegal and John Erlenborn. And they continued to serve on the board. Tom continues to serve. He's chair of the board. John Erlenborn resigned from the board of Friends when he was appointed president of LSC.

MR. STRICKLAND: Were you going to address anything else on that?

MR. FORTUNO: No.

MR. STRICKLAND: All right. I think that's all on that particular item.

No. 20 on the agenda is to take a look at our meeting schedule for the remainder of the year. Having asked everybody to bring their calendars, guess who didn't bring his calendar. But I have called in to check on some dates, and I can speak as if I had my calendar here.

Some time ago, the staff prepared a map of the United States, and it put a star on the map and a date as to locations where the board has met between 1999 and 2003, and with a view to looking at places we have not met recently, and perhaps should meet.

And while we don't have that map in front of us, I will go from memory, and perhaps someone on the staff could assist me if I don't state this correctly. But --

MR. FORTUNO: Mr. Chairman, if it's of any use, the map will be distributed --

MR. STRICKLAND: Oh, here we go. Good.

MR. FORTUNO: -- so that you will have it before you as you --

MR. STRICKLAND: Excellent. All right. While Pat is handing out those maps, it's color-coded in the sense that based on our previous look at this -- and this is the first time we've brought this to the board -- but we determined that there are some places that we ought to go.

And I don't know what color to call this, but Portland, Oregon is one of those locations where we have not been and perhaps should consider going. And San Juan, Puerto Rico is another, and I'm told that our program or programs in Puerto Rico make up LSC's largest grantee.

MR. FORTUNO: Yes. That's correct. Puerto Rico is our largest grantee, and it receives in excess of $20 million in LSC funding this year alone.

MR. STRICKLAND: Is there a single service provider in Puerto Rico?

MR. FORTUNO: It is essentially one service provider. There in fact is one very small program. I think it's affiliated with the law school there. But it's a tiny fraction of the major program. It's essentially a statewide or commonwealth-wide program, and that's Puerto Rico Legal Services.

MR. STRICKLAND: And the other locations here shown in yellow are Omaha and Des Moines. Someone told me we've been to Des Moines before, and there wasn't a clear indication whether or not we've been to Omaha. But I took that to mean no, that we've never been to Omaha. And those of you with institutional knowledge could -- shaking your head, saying we haven't been to Omaha.

MR. FORTUNO: I've been at LSC over 20 years, and never during that time have we been to Omaha. I'd remember.

MS. MERCADO: Definitely not in the winter.

MR. STRICKLAND: Well, and I'm a little concerned -- and I want to state publicly -- that I don't want anyone to perceive the notion of going to Puerto Rico as a so-called boondoggle because -- just because of the distance and the fact that it may be a warmer climate or something like that.

The fact that the grantee there receives $20 million, I would view that as a fairly serious matter; and that if we have never been there, I think it would be a significant statement for the Corporation to make to schedule a meeting there. But I just say that by way of information, as opposed to advocacy.

But with all that in mind -- and I don't think we have a handout on this, but Pat -- do you now have a handout on it? I'm telling you, I need to stop saying we don't have a handout. I'm getting embarrassed.

MR. FORTUNO: We use that as a trigger.

MR. STRICKLAND: Okay. Well, this handout shows you some cost information on having a meeting at a hotel in Puerto Rico or Portland, Oregon. And I think we're talking about our April and August meetings with regard to these locations.

So if everyone could take a look at those, and if Pat wants to give us more information about -- well, could someone, either Pat or David or someone knowledgeable about costs of holding meetings -- well, one more editorial comment.

I think it is important for the board to make an appearance, if you will, in places other than inside the Beltway. We know how to conduct a meeting here. It's easy to do. It's convenient for everybody to come to Washington. It's convenient for the staff. And it may well be considerably less expensive to hold a meeting here than in some other location because you don't have as many people traveling.

But by the same token, I think the board -- the Corporation and its board together have a responsibility to hold meetings in other locations. Among other things, it gives our grantee or grantees in those areas a chance to showcase their programs.

It gives the board members an opportunity to observe these programs up close. And I think it is an energizing event on both sides of the table. I came away from the meeting in New York making that statement, and I suspect if we had a meeting somewhere else, I would have the same reaction.

So having said all that, I'd be glad to entertain discussion about -- or let's get some information on costs. Just assume for discussion we're considering those two locations. How would the cost compare to go to a meeting in Portland and/or San Juan? Who can address that for us? And I don't mean right down to the nickel. But just for comparison.

MR. FORTUNO: I don't know that anybody has that information at their fingertips. But I would think that there would be a difference, a slight difference, in lodging. I don't know, for example, that there would be much of a difference in terms of airfare between Portland and Puerto Rico.

MR. RICHARDSON: Just by way of background, normally a board meeting here in Washington will cost you about $20,000, with all the travel, hotel cost, and meals.

When you travel outside of the Washington area into another location, you're looking at about $35,000 for a board meeting. It's dependent on how many staff and how many presentations that you take along with you. That's additional cost, is the staff travel.

MR. STRICKLAND: Well, no reflection on anybody on the staff. But one way to reduce that cost is to cut down the number of people on the staff who attend the meeting. I realize, and I think it's to be expected, that when we're meeting in Washington, because we're just down the street, that we'd have more staff people here than we might have at an out-of-town meeting. But that's one way to approach that.

But what do other board members think about my comment about the importance of meeting at other locations? I realize it costs more, and now we've had that quantified. But let's hear a few comments on that.

MR. HALL: Well, I would say I think our experience so far teaches us that by getting out and seeing how the grantees are actually working and hearing from them is a good thing. The trip to Santa Fe and going to the pueblo and seeing the place and hearing directly from the people, it gives you a different perspective.

So I don't think there's really a debate as to whether we should do it. The only question is how and where. And I would encourage us to make that a standard part of our meeting schedule.

MR. STRICKLAND: Herb, did you have a comment? MR. GARTEN: Yes. I would echo that, pointing out how important that visit to New York was to the programs there, in Queens and throughout the state, and the comments that we got from bar leaders, that being the first time that we ever met in New York.

MR. STRICKLAND: Yes. Tom?

MR. FUENTES: I certainly think there's great value to visiting other locations. It strikes me, though, that -- and with our next meeting, it will be really the first meeting that our good president will have the opportunity to be engaged more fully after a period of service, and yet very new.

And I'm thinking that we're going to want the broadest availability of staff at the next meeting, the immediate next meeting, in support. And so I would be hesitant to go out of town on this next meeting, whereas I think that it might be more fair to consider it at least one thereafter.

MR. MEITES: Let me make a compromise suggestion.

MR. STRICKLAND: Yes, sir.

MR. MEITES: Herb has been quietly lobbying all of us for Baltimore for the next meeting. Now, Baltimore meets Tom's point about availability of staff, and I'm sure that Maryland would provide some insight into the operations. So that may make sense for the next meeting.

MR. GARTEN: Your staff can easily attend.

MR. STRICKLAND: Oh, I can -- you're right. They certainly could. Well, that's an excellent suggestion.

MR. GARTEN: We have -- Legal Aid Bureau is the sole recipient of IOLTA funds. Wilhelm Joseph is the nationally known head of it, originally from New York. I know he and the other organizations in the state, including the state bar and the chief judge, would be delighted to have you as guests.

MR. STRICKLAND: Well, that's a wonderful suggestion. I knew Herb would figure out a way to get that on the table. It's just a matter of -- and he didn't even say a word. It just got on the table without him.

MR. MEITES: He didn't have to. He just kicked me under the table and it happened.

MR. McKAY: I should also say that he already has a majority vote on it.

MS. MERCADO: Will you still be required to take all the staff to stay there, though?

MR. GARTEN: I think the hotels will be less expensive.

MR. STRICKLAND: I imagine it would. Well, we could roll all this over. But I do think that these particular locations on the map appear to me to be places we should have on our list to go. It doesn't necessarily matter when we do it.

MR. GARTEN: I think the air transportation will also be considerably less into Baltimore-Washington than either Dulles or National.

MR. STRICKLAND: Maybe so. Well, do you have any comment on that, Helaine, in terms of location, availability of staff, and so on, in response to Tom Fuentes?

MS. BARNETT: I really don't. I appreciate the concern that at that board meeting it probably would be helpful to have the availability of staff.

MR. STRICKLAND: Good. All right.

MS. BARNETT: Because we've been quite a bit to come back to report to the board.

MR. STRICKLAND: Yes. Well, that's an excellent suggestion, and I certainly accept that. And I take it, then, that we -- or I think we've set a timetable on that already of -- is it April 30th and May 1st? Is that right? All right. Why don't --

MS. MERCADO: Can I just revisit and see whether we might be able to make that either a week earlier or a week later?

MS. BARNETT: Oh, I'd be for that, a week earlier.

MS. MERCADO: A week earlier?

MR. STRICKLAND: Okay. I can't respond to that, I'm sorry, because I didn't bring my book. The problem is when we start moving the date around, then somebody else drops out. So my suggestion would be that we leave it set for the 30th and the 1st, and that we instruct the staff to undertake the logistics efforts to get that meeting set.

And I don't mean to minimize the importance of the local involvement, but we need to pull the trigger on that, too. And maybe we have just the man to provide some assistance in that regard. But whatever mechanisms we need to get moving with respect to notifying the local community, the grantee and other constituent groups, that we're going to be in that area.

MR. GARTEN: As far as the visit, the headquarters of the Legal Aid Bureau is right downtown in a relatively new building. It would be better if the visit could take place on a Friday, I guess, than on a Saturday, if that can work out.

MR. STRICKLAND: Yes. I think so. Yes. If we're going to have a field visit, we probably want to do that Friday morning. So we'd have a schedule similar to the one we had in New York, except I think most board members don't want -- well, the only reason we went over to Sunday in New York was the Search Committee. So we still want to package it so that we have a Friday/Saturday evolution.

All right. Then what were the suggested dates again for August, or did we pick any?

MR. GARTEN: I don't think we did.

MR. STRICKLAND: I know that in my own case, having looked at the August calendar, I could not do it the weekend of the 20th and 21st.

MS. MERCADO: Are you going to August? You all aren't going to have a June or July? I thought we had five meetings a year.

MR. STRICKLAND: Well, if we're going to have five meetings a year, then maybe we can --

MS. MERCADO: Usually it's like late June. That's why I was looking at earlier April and later June, to try and get five meetings in.

MR. STRICKLAND: Well, later June is okay. I can't come in on a particular date. Pat, can you arrange to circulate that? 

MR. GARTEN: How's the 25th and 26th?

MR. STRICKLAND: Of June?

MR. GARTEN: Yes.

MR. STRICKLAND: Okay. Let's tentatively say June 25 and 26.

MR. DIETER: That's roughly when we met last year.

MR. STRICKLAND: Yes. Location to be determined, or do we want to talk about a location now? MS. MERCADO: What you may want to do is you may just want to have your April meeting in D.C. and then your June meeting out of town.

MR. STRICKLAND: Well, we're thinking about having the April meeting in Baltimore, which is more or less the equivalent of coming to D.C. And -- well, I think we may have to circulate the list on the June date.

In August, I think the ABA is early in the month of August. Is that not right, Herb?

MS. MERCADO: We usually meet in September.

MR. STRICKLAND: The ABA?

MS. MERCADO: No, no. In September is when we usually meet for the next meeting.

MR. GARTEN: The ABA is not here. But it's in August, early August.

MR. STRICKLAND: Okay. So we're not talking about an August meeting. We're talking about a September meeting? Or probably earlier in the month, maybe around the 10th or 11th.

MR. GARTEN: Let me just check one thing. It's okay.

MR. STRICKLAND: Well, I think we'll have to circulate that, too, Pat.

MS. MERCADO: Are we also possibly looking at that first weekend, too?

MR. STRICKLAND: Beg your pardon?

MS. MERCADO: I said what dates are we looking to in September?

MR. STRICKLAND: I was pointing at the 10th/11th weekend. But that's -- let's see. Labor Day is on the 6th.

MR. GARTEN: We think it would be a good -- those dates are good. We have the Jewish holidays coming up the next weekend, on the 16th.

MR. FUENTES: I have a conflict on Friday, the 10th.

MR. FORTUNO: The NLADA banquet dinner -- just a point of information -- Thursday, June 17.

MR. GARTEN: When is it?

MR. STRICKLAND: Hey, let's just circulate and let people send in the sheet. I think it's too -- it's sort of like writing a letter by committee. I don't think we're going to be able to do it around the table. MR. DIETER: Maybe if they'd just indicate on that if there is a meeting, a significant meeting, taking place on those weekends --

MR. STRICKLAND: Yes. Fill in information that like so that we'll know about it.

MR. DIETER: -- fill it in, it might be useful to be able to --

MS. MERCADO: But I think probably the NLADA dinner, yes, was to try and -- for those members that could be here on Thursday, to go to that Thursday dinner. Sometimes we try and do some of that while we --

MR. STRICKLAND: Right. We might try to tie that together. But let's do circulate that, Pat. The date we're setting, though, now is the March 30/ April 1 Baltimore --

MS. BeVIER: April 30/May 1.

MR. STRICKLAND: Sorry, April 30/May 1. April 30/May 1.

Okay. Is there any other business? Because we're going to go into closed session here in a moment. (No response.)

MR. STRICKLAND: Is there any public comment? Yes, sir?

MR. SAUNDERS: Mr. Chairman, Don Saunders with NLADA. Being a native of the South, it's not in my nature to continue to butt into your meeting. But if I could ask the board's indulgence for one moment on behalf of NLADA and the Center on Law and Social Policy, I wanted to make a few remarks about your process for hiring a new president and the results of that process.

As our president, Clint Lyons, said to you earlier on at your request, this in his view is the most important decision that you make as a board. And I just wanted to say on behalf of me and my colleagues that you as a board, by selecting Helaine Barnett, have sent the strongest possible message about your values as stewards of LSC.

It is a wonderful statement of support. It is viewed that way in our community. It also shows your values as a board: your values and respect for your grantees and the clients they serve; your values for quality in the delivery of legal services for a new generation of leaders, as you've talked about; your value on diversity. If you look back to the history of the hiring of this position, you don't see many women at all. And we're very proud of that.

It also shows your value to the broad community of legal services stakeholders and supporters. Helaine obviously comes from a background as a field person, but she's worked in an office that is not a grantee of yours and she understands very directly the importance of LSC working in the broader civil justice community.

We also very much appreciate your courtesy and consideration of Lillian Moy, our representative, and your involvement in the ABA and your process. Again, it shows very strong values on the part of this board.

Just a couple words about Helaine, who it will be our great pleasure to serve with. Whether you've known Helaine for many years, as I have, or whether you've heard of her reputation in the field, it is a genuinely warm and strong response from across the country.

Knowing that this may be the only job that I know in civil legal aid that has a bigger staff and even more difficulty in managing than the Legal Aid Society, she's actually coming to a situation that she's been involved in for many years.

And if there's anything that approaches the Congress in terms of political trickery, it's dealing with the politics in New York City, something again that Helaine is very, very experienced with. I'm sure that experience will serve you and the community well.

We had the opportunity to work very closely with the Legal Aid Society and the whole legal community after 9/11, and their leadership and the whole response of the Legal Aid Society of Helaine and the bar was one of the more extraordinary things that any of us have ever seen.

It's going to be odd, frankly, to fight occasionally with Helaine. I'm sure we'll have issues that we may or may not agree with. But as we engage in those important discussions about the future of equal justice in this country, we'll always know that wherever Helaine may stand, it will be on behalf of the interests of clients and the best interests of you at the board.

So again, on behalf of all my colleagues, I want to congratulate you on a truly outstanding decision. And thank you.

MR. STRICKLAND: Thank you very much, Don. That's very well stated and very much appreciate. It's always good to have a decision that you make as a board validated. And everywhere I've been and everybody I've talked to, I've heard nothing but favorable comments. And I've observed a lot of excitement about Helaine's appointment. So that's very encouraging to the board, and we appreciate those kind remarks.

Now we need, then, to -- is there any other public comment? And you're always free to butt in, Don. So don't worry about that.

MR. SAUNDERS: I probably will.

MR. STRICKLAND: Let's consider now whether to authorize an executive session of the board to address the items listed on the agenda under closed session. Is there a motion to go into executive session?

M O T I O N

MR. FUENTES: Move to so authorize.

MS. MERCADO: Second.

MR. STRICKLAND: All those in favor, please say aye.

(A chorus of ayes.)

MR. STRICKLAND: Those opposed, nay.

(No response.)

MR. STRICKLAND: And this will end the open portion of the meeting. We will adjourn to the closed session. Thank you very much.

(Whereupon, at 2:26 p.m., the board adjourned to executive session.)

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