Taxpayer Cash Indirectly Funds Lawyers for Illegals

Firms receiving federal funds to represent poor Americans use loophole to bypass prohibition

Although Congress explicitly has prohibited the use of federal legal aid funds for the poor from being used to represent illegal immigrants, a loophole allows the money to be used indirectly for that purpose.

Critics contend that the loophole is made possible by a combination of regulations that undermine of intent of the law, approving courts and political appointees who seem to care little about preventing illegal immigrants from benefiting from funds intended to help low-income citizens and legal residents.

“You have two buckets, but one bucket frees up the other bucket … It become a joke, really.”

The Legal Services Corporation, created by Congress in 1974 to help poor people get access to attorneys, distributes $400 million a year to 137 legal aid firms across the country. Those firms represent low-income folks involved in a range of civil cases, from landlord disputes to employment matters. They also provide legal advice and help poor people apply for government benefits.

Under federal law, those firms cannot represent illegal immigrants, except in limited circumstances. But rules written by federal bureaucrats and approved by court rulings allow those firms to set up “mirror corporations” that are free to represent illegal immigrants. Technically, federal funds from the Legal Services Corp. cannot be transferred from the grant-receiving firm to its sister organization. But the firms can accept the federal grants and then transfer money from other sources.

“You have two buckets, but one bucket frees up the other bucket,” said Ian Smith, an attorney who recently discovered the loophole when he did legal battle against one of these sister firms. “It become a joke, really.”

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James J. Sandman, president of the Legal Services Corp., denied that the organization allows taxpayer money — even indirectly — to make its way to lawyers representing illegal immigrants.

“To ensure strict compliance with these rules, LSC vigorously monitors its grantees and conducts numerous on-site visits to their offices each year,” Sandman wrote in an email in response to questions from LifeZette.

Lax Enforcement Alleged
But Smith, investigative associate for the Immigration Law Reform Institute, said information he has gathered from Freedom of Information Act requests suggests that the federal organization has been less than vigorous in ensuring that federal funds are not used to pay for attorneys for prohibited immigrants.

The federal inspector general with jurisdiction over the Legal Services Corp. told the Immigration Law Reform Institute in response to its FOIA request that it could find no records that a taxpayer-funded legal aid firm had ever turned away a client for failing to prove citizenship or eligibility status. In the last six years, the Legal Services Corp. has conducted just one investigation into a federally funded law firm improperly funding legal representation for illegal immigrants. In that case, an employee of the firm tipped off federal authorities to improprieties, Smith said.

Unlike other federal programs that bar illegal immigrants, Smith said, legal aid organizations are not required to use federal databases to verify the citizenship status of potential clients. Clients merely need to check a box indicating they are a citizen or eligible resident. There is no background check. It is essentially an honor system, he said.

In the legal battle the Immigration Reform Law Institute was involved in, the Washington-based legal group represented a citizens’ organization that led the drive to block a law that would have issued driver cards to illegal immigrants in Oregon. The legislature passed the law in 2013, but Oregonians for Immigration Reform successfully petitioned to put the issue before voters, who rejected the proposal in a landslide in 2014.

Documents indicate that ostensibly separate legal aid organizations in Oregon are “nearly one and the same.”

A group of illegal immigrants sued last year in an attempt to overturn the referendum. A judge tossed the suit, which now is on appeal. The legal group representing the plaintiffs was the Oregon Law Center, a mirror firm of the taxpayer-supported Legal Aid Services of Oregon. Under the law, Legal Aid Services of Oregon cannot represent illegal immigrants — but Oregon Law Center can.

The law ostensibly requires the firms to be legally separate entities. But Smith said his research indicates that they are “nearly one and the same,” with the same board of directors, adjoining offices, and shared litigation support functions. They often share cases and coordinate fundraising efforts, training, and administration.

Documents filed to the Legal Services Corp. show that Legal Aid Services of Oregon uses non-taxpayer funds to pay a pro bono manager who provides technical assistance, support, and coordination of legal services with Oregon Law Center. A joint staff planning committee includes managers of both firms. They also share a mission statement of “achieving justice for the low-income communities of Oregon by providing a full range of the highest quality civil legal services.”

Representatives from Legal Aid Services of Oregon and the Oregon Law Center could not be reached for comment last week.

Lawyers ‘Know a Loophole When They See One’
Under regulations governing grants from the Legal Services Corp., elements used to determine if law firms and mirror organizations are genuinely separate include whether they have separate facilities, personnel, and accounting records; and whether funds are transferred. But the presence or absence of any of the those factors is not determinative — the corporation decides on a case-by-case basis.

“It’s hard to enforce because the enforcement agent … is the Legal Services Corporation, itself,” said Ken Boehm, a former general counsel of the corporation.

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Boehm was a congressional staffer who helped draft legislation that passed Congress in 1996 strengthening the ban on giving funds to organizations that represent illegal immigrants. Prior to that, the prohibition was murky. Ambiguities were removed in exchange for allowing federally funded legal aid organizations to represent illegal immigrants in cases of domestic violence, abuse, or trafficking. Boehm said the restrictions now are “crystal clear,” but he said legal aid firms have devised ways around them. In one case, he said, a mirror organization was paying rent for office space from the grant-receiving firm — but was months behind on that rent.

“Lawyers out there who know a loophole when they see one have been getting away with all sorts of things,” he said.

Now chairman of the National Legal and Policy Center, which promotes ethics in government, Boehm said enforcement ultimately falls to the 11-member board that runs of the Legal Services Corp. Each is an appointee of President Obama — and Boehm said they have not been aggressive about pursuing violations that involve illegal immigrants.

The Legal Services Corp. also generally flies under the radar of Congress, Boehm said.

“Oversight hearings are sort of scarce,” he said. “In the Senate, it’s been a couple of years.”

Jim Ludwick, who serves on the board of directors of Oregonians for Immigration Reform, said it is frustrating to be opposed in court by lawyers who appear to be indirectly subsidized by taxpayer funds meant to help poor Americans and legal residents.

“We just see where the law is violated — and they get away with it,” he said. “They get away with it because they can get away with it.”

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