Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 5, 1995 TAG: 9502060004
SECTION: VIRGINIA PAGE: A-3 VIRGINIA EDITION: METRO
SOURCE: LESLIE TAYLOR STAFF WRITER
DATELINE: LENGTH: Long
Three years ago, Janet Hayes' husband walked out and stopped making mortgage payments on their Roanoke County home.
Unable to make the payments alone, she was facing foreclosure.
Hayes applied to the federal mortgage assistance program, a U.S. Department of Housing and Urban Development effort to help people who, through no fault of their own, can't meet payments on homes purchased with loans insured by the Federal Housing Administration.
Her application was denied. Hayes wanted to fight the application rejection but couldn't afford a lawyer.
She went to the Legal Aid Society of Roanoke Valley. With their help, Hayes sued HUD - and won. She was placed in a three-year payment suspension program, allowing her time to recover financially without being penalized.
``I was in a situation I never believed I could be in,'' Hayes said. ``I found how easily you could lose it all and become homeless. But I'm so thankful for the representation that I had through Legal Aid. Being in a situation of not having the money and not being able to pay for legal representation, I would have been sucked down the tubes.''
For years, Legal Aid societies in Virginia and other legal services programs across the country have handled the civil legal problems of low-income people. The programs have been called crucial to ensuring that the poor have the same access to the legal system as those with financial means.
Over the past 15 years, though, there has been a push to do away with funding for those services. And supporters of legal services to Virginia's poor have found themselves warding off an attack from both the federal and state sides.
With the budgets of some legal services for the poor already shrinking, ``we're facing a serious problem,'' said Henry Woodward, general counsel of the Legal Aid Society of Roanoke Valley, whose lawyer staff has dropped from 13 to six in the past decade as funding has decreased. ``We'd barely be here.''
Efforts to do away with federal legal services funding began during the Reagan administration. Over the years, that push has been sidestepped with widespread bipartisan support for continued, though reduced, funding.
Most recently, President Clinton increased legal services funding to its Reagan-era level - an improvement; though, with inflation, not a complete restoration.
But the new House Republican leadership has renewed the push and proposed cutting a $415 million pot of money that provides an estimated 55 percent to 60 percent of legal services funding for the poor nationwide.
And in the Virginia General Assembly, bills were submitted in both houses that would have killed a program that provides millions of dollars a year to support legal services for the poor.
Why the push? And why now?
At the federal level, ``there is a great move to cut the budget, although the money we're talking about is exceptionally small,'' said David Rubinstein, executive director of the Virginia Poverty Law Center.
``And there are those who believe Legal Aid is engaged in social engineering. Although the vast majority of cases are very routine - evictions, divorces, custody - some [congressional] members are concerned about some of the more controversial items, like certain class-action suits against governmental agencies.''
In the early 1980s, Roanoke's Legal Aid represented public housing tenants who sued the Roanoke Redevelopment and Housing Authority, accusing the agency of improperly computing electricity needs and then overcharging them by adding surcharges.
A federal judge in Roanoke initially threw out the lawsuit, ruling that the tenants had no right to sue in federal court over alleged violations of housing regulations. The 4th U.S. Circuit Court of Appeals agreed, and Legal Aid appealed to the U.S. Supreme Court.
In 1987, the high court ruled that the tenants had a right to sue, sending the case back to Roanoke. A settlement was reached in 1990. The tenants received refunds.
``We see lots of cases where serious legal problems are involved,'' Woodward said. ``At any given point, we're involved in some pretty important litigation for poor people.''
Federal funding to Legal Aid is provided through the Legal Services Corp. Key House Republicans have indicated that they may attempt to cut the funding, according to the National Legal Aid and Defender Association.
``It would certainly mean [legal aid] offices would close,'' Rubinstein said. ``Which ones and where, it would be hard to say. But the cut would be so Draconian, some offices would close and staff would be laid off. It would be devastating to legal aid across the state and across the nation.''
At the state level, a different push was on. It pitted bankers against legal aid lawyers and advocates - and jeopardized a pool of funds that supplies about 18 percent of the operating budgets of the state's Legal Aid societies.
In 1993, the Virginia State Bar, which regulates lawyers, devised a way to increase funding for legal aid.
At the bar's urging, the state Supreme Court ordered that interest from some trust accounts set up by private attorneys for their clients be used to fund legal aid and other nonprofit programs.
Banks usually pay no interest on these accounts because they are too small or deposited for too short a term to earn interest. But by pooling the money from many of these accounts, the State Bar program earns interest to support Legal Aid offices, shelters for abused women and other similar efforts. The money is disbursed through the Virginia Law Foundation, established by members of the State Bar to assist law-related charitable and educational efforts.
Until the fall of 1993, the trust-account program was voluntary, earning about $1.7 million a year. When the Supreme Court required that all private attorneys participate, the program was expected to earn nearly $4 million a year for these nonprofit programs.
In fact, the mandatory program provided Virginia's 13 Legal Aid societies with $2.68 million for the 1994-95 fiscal year.
But Del. Glenn Croshaw, D-Virginia Beach, introduced legislation during the 1994 General Assembly that would throw out the Supreme Court's rule that made the program mandatory rather than voluntary. The bill, supported by the banking industry, was carried over to this session.
``The mandatory [trust-account] approach required banks to incur significant additional administrative procedures that were costly to the bank,'' said Walter Ayers, executive vice president of the Virginia Bankers Association. ``The banks opposed the whole notion that the State Bar, that has the authority to regulate lawyers but that has never been given legislative authority to regulate banks, were nonetheless dictating these kinds of conditions to the bank.
``We just didn't feel that was appropriate in the absence of legislative authority to do so.''
Croshaw coupled the bill this session with one that would require that all interest generated by trust accounts be paid to a special fund for state legal aid programs.
Last week, the House Committee on Corporations, Insurance and Banking unanimously entered a compromise that would end the mandatory nature of the trust-account program and make it voluntary again. The compromise provides that all revenue under the voluntary program go to the Legal Services Corporation of Virginia, the administrative office for all legal aid programs in Virginia.
``We felt the return to a [voluntary] program was a foregone conclusion,'' said Mark Braley, the corporation's executive director. ``We had to take steps to protect our funding. We never have enough. With the resources we get now, we only serve 20 percent of the need out there.''
A Senate bill, offered two weeks ago, also proposed that the mandatory requirement be thrown out. That bill still is in committee.
But as part of the House compromise, supporters of Croshaw's bill, primarily the Virginia Bankers Association, agreed not to seek passage of the Senate bill, Ayers said. The compromise bill must pass the House before the Senate can act on it.
Of the total clients served by the Legal Aid Society of Roanoke Valley during 1994, an estimated 572 had cases that involved court litigation. About 2,100 received advice or some very brief service, Woodward said.
``We cannot begin to represent everybody who can't pay for lawyers,'' he said.
Virginia's Legal Aid societies do receive other forms of state funding, including $2 from the filing fees of every civil lawsuit filed in Virginia. And Roanoke's Legal Aid receives some support from United Way of Roanoke Valley.
The idea of cutting any form of legal aid funding angers Janet Hayes.
``It would be like cutting the throats of people like myself who are on limited income,'' Hayes said. ``That's how bad it would hurt us. Anyone who's had representation from [the Legal Aid Society of Roanoke Valley] I'm sure feels the same way I do.
``If not for Legal Aid, I would have lost my home. I would have had no place to turn.''
by CNB