NCPA - National Center for Policy Analysis

Legal Services Corp. Engaged In Fraud

May 28, 1999

House Majority Leader Dick Armey (R-Texas) recently accused the Legal Services Corp. of engaging in fraud. In reporting to Congress, LSC officials vastly overstated the number of cases the organization handled. And it hid the true number until after Congress voted it a $17 million increase in funding -- to a total of $300 million for the 1999 fiscal year.

LSC operates 269 local offices to give legal advice to the poor. Its own inspector general discovered that every office audited had serious problems.

  • Approximately 70 percent of closed cases claimed by programs in San Francisco, San Diego, Miami and Virginia were found to be invalid or non-existent.
  • A Florida program admitted that its claim of 44,993 open cases should really have been for 5,500 cases -- an error of more than 800 percent.
  • The LSC blamed the inflated number on a computer error.
  • A San Diego program misreported 14,000 phone calls handled by non-lawyers as cases.

Meanwhile, Legal Services lawyers from North Carolina were caught on videotape during an illegal trip to Mexico trying to recruit Mexicans to sue farmers. Those same lawyers were later rehired by another LSC program and the lawsuit was allowed to continue.

Source: Ken Boehm (National Legal and Policy Center), "The Legal Services Fraud," Investor's Business Daily, May 28, 1999.


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