SPEAKERS       CONTENTS       INSERTS    
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30–068 PDF

2007
LEGAL SERVICES CORPORATION IMPROVEMENT ACT

HEARING

BEFORE THE

SUBCOMMITTEE ON
COMMERCIAL AND ADMINISTRATIVE LAW

OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

ON
H.R. 6101

SEPTEMBER 26, 2006

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Serial No. 109–158

Printed for the use of the Committee on the Judiciary

Available via the World Wide Web: http://judiciary.house.gov

COMMITTEE ON THE JUDICIARY

F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois
HOWARD COBLE, North Carolina
LAMAR SMITH, Texas
ELTON GALLEGLY, California
BOB GOODLATTE, Virginia
STEVE CHABOT, Ohio
DANIEL E. LUNGREN, California
WILLIAM L. JENKINS, Tennessee
CHRIS CANNON, Utah
SPENCER BACHUS, Alabama
BOB INGLIS, South Carolina
JOHN N. HOSTETTLER, Indiana
MARK GREEN, Wisconsin
RIC KELLER, Florida
DARRELL ISSA, California
JEFF FLAKE, Arizona
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MIKE PENCE, Indiana
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas

JOHN CONYERS, Jr., Michigan
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
MAXINE WATERS, California
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
ROBERT WEXLER, Florida
ANTHONY D. WEINER, New York
ADAM B. SCHIFF, California
LINDA T. SÁNCHEZ, California
CHRIS VAN HOLLEN, Maryland
DEBBIE WASSERMAN SCHULTZ, Florida

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PHILIP G. KIKO, Chief of Staff-General Counsel
PERRY H. APELBAUM, Minority Chief Counsel

Subcommittee on Commercial and Administrative Law

CHRIS CANNON, Utah Chairman

HOWARD COBLE, North Carolina
TRENT FRANKS, Arizona
STEVE CHABOT, Ohio
MARK GREEN, Wisconsin
J. RANDY FORBES, Virginia
LOUIE GOHMERT, Texas

MELVIN L. WATT, North Carolina
WILLIAM D. DELAHUNT, Massachusetts
CHRIS VAN HOLLEN, Maryland
JERROLD NADLER, New York
DEBBIE WASSERMAN SCHULTZ, Florida

RAYMOND V. SMIETANKA, Chief Counsel
SUSAN A. JENSEN, Counsel
BRENDA HANKINS, Counsel
MIKE LENN, Full Committee Counsel
STEPHANIE MOORE, Minority Counsel
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C O N T E N T S

SEPTEMBER 26, 2006

OPENING STATEMENT
    The Honorable Chris Cannon, a Representative in Congress from the State of Utah, and Chairman, Subcommittee on Commercial and Administrative Law

    The Honorable Melvin L. Watt, a Representative in Congress from the State of North Carolina, and Ranking Member, Subcommittee on Commercial and Administrative Law

WITNESSES

Mr. Richard ''Kirt'' West, Inspector General, Legal Services Corporation
Oral Testimony
Prepared Statement

Mr. David C. Williams, Inspector General, The United States Post Office
Oral Testimony
Prepared Statement

Mr. Frank Strickland, Chairman of the Board, Legal Services Corporation
Oral Testimony
Prepared Statement
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LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    Prepared Statement of the Honorable Chris Cannon, a Representative in Congress from the State of Utah, and Chairman, Subcommittee on Commercial and Administrative Law

APPENDIX

Material Submitted for the Hearing Record

    Letter from Edouard R. Quatrevaux to the Honorable Chris Cannon, a Representative in Congress from the State of Utah, and Chairman, Subcommittee on Commercial and Administrative Law

    Memorandum to Board of Directors of the Legal Services Corporation from Covington & Burling L.L.P.

    January Transcripts of the Minutes of the Board and the Performance Review Committee of the Legal Services Corporation

LEGAL SERVICES CORPORATION IMPROVEMENT ACT

TUESDAY, SEPTEMBER 26, 2006

House of Representatives,
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Subcommittee on Commercial
and Administrative Law,
Committee on the Judiciary,
Washington, DC.

    The Subcommittee met, pursuant to notice, at 2 p.m., in Room 2141, Rayburn House Office Building, the Honorable Chris Cannon (Chairman of the Subcommittee) presiding.

    Mr. CANNON. The Subcommittee on Commercial and Administrative Law will please come to order.

    The Subcommittee on Commercial and Administrative Law is meeting this afternoon to consider H.R. 6101, the ''Legal Services Corporation Improvement Act,'' a bill I introduced in response to a disturbing pattern of events that have come to the Subcommittee's attention. I will keep my opening remarks brief as I believe the testimony and the opportunity to ask questions of our witnesses will prove to be valuable.

    Congress created the Inspector General system in 1978. The purpose of this system is to ensure that the Federal agencies follow proper Government procedures and policies. There are two types of IGs, those appointed by the President and those appointed by individual agencies. The presidential appointees can only be dismissed by the President. In contrast, agency appointees, such as the LSC IG, can be fired directly by the agency. As a result, agency-appointed IGs stand a greater risk of retaliation from agency heads. The only restraint on agency heads firing their IGs is they are required to provide notice to Congress of the removal along with reasons for their decision.
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    H.R. 6101 would simply amend the Legal Service Corporation Act to provide that the IG may at any time be removed, but only upon the written concurrence of at least nine members of the 11-member Board. The current law only requires a simple majority of the Board to remove the IG; namely, six members.

    The purpose of today's hearing is to examine whether LSC's Inspector General needs increased protection from retaliation by the Board of Directors as provided in H.R. 6101.

    The Legal Services Corporation's Board of Directors hired Kirt West as the LSC IG in 2004. One of his first reports was issued in response to an inquiry from this Subcommittee regarding the lease arrangement for LSC's headquarters. Rather than accept the IG's report on the lease and cooperate in implementing his conclusions, the LSC Board of Directors instead rejected the report and contemplated removing the IG.

    Whereas the most important characteristic of an inspector general is independence, there would appear to be an obvious and inherent conflict between any IG and the agency for which he or she serves. The IG is charged with oversight of the functioning of the agency and must as a matter of course conduct investigations of those who control the agency, the same people to whom he or she reports and with whom a working relationship must be maintained.

    It is quite clear, based on comments made by LSC board members, that they either don't understand the concept of an IG or have no respect for the IG.

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    I drafted H.R. 6101, the ''Legal Services Corporation Improvement Act,'' to provide some greater degree of independence for LSC's IG. I must stress that the measure was not drafted in response to problems limited to the current Board and IG, but in response to a pattern of problems that predate both the present IG and LSC administration. I cite a letter of support for this administration from former LSC's former Inspector General, Ed Quatrevaux, which underscores the need for H.R. 6101. I ask unanimous consent that a copy of this letter be included in the hearing record and hearing no objection, so ordered.

    [The information referred to is available in the Appendix.]

    Mr. CANNON. Mr. Quatrevaux states, ''I fought numerous challenges to IG independence with the LSC Board of Directors and headquarters' management. My understanding that the current IG is facing many of the same problems with a different Board and management leads me to believe that LSC's propensity to challenge the authorities and dependence of the IG is an institutional problem.''

    Other agencies have experienced similar issues with their IGs. To remedy the conflict in two agencies, Congress created a bar for dismissal of the Inspector General for the United States Postal Service and a bar for the United States Capitol Police which is higher than that proposed in H.R. 6101.

    I expect David Williams, our witness from the Postal Service, will explain why such protections for Inspector General are necessary.

    Indeed, I look forward to receiving the testimony from each of our witnesses, and I anticipate this hearing will be very informative and constructive endeavor.
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    I now turn to my colleague, Mr. Watt, and the distinguished Member of my Subcommittee, and ask him if he has any opening remarks.

    [The prepared statement of Mr. Cannon follows:]

PREPARED STATEMENT OF THE HONORABLE CHRIS CANNON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF UTAH, AND CHAIRMAN, SUBCOMMITTEE ON COMMERCIAL AND ADMINISTRATIVE LAW

    The Subcommittee will please come to order.

    The Subcommittee on Commercial and Administrative Law is meeting this afternoon to consider H.R. 6101, the ''Legal Services Corporation Improvement Act,'' a bill I introduced in response to a disturbing pattern of events that have come to our attention. I will keep my opening remarks brief, as I believe that the testimony and the opportunity to ask questions of our witnesses will prove to be more valuable. Also, I want to leave as much time as possible for Members of the Subcommittee to utilize this opportunity.

    Congress created the inspector general system in 1978. The purpose of this system is to insure that federal agencies follow proper government procedures and policies. There are two types of IGs: those appointed by the President, and those appointed by individual agencies. The Presidential appointees can only be dismissed by the President. In contrast, agency appointees, such as the LSC IG, can be fired directly by the agency. As a result, agency-appointed IGs stand a greater risk of retaliation from agency heads. The only restraint on agency heads firing their IGs is that they are required to provide notice to Congress of the removal along with reasons for their decision.
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    H.R. 6101 would simply amend the Legal Services Corporation Act to provide that the Inspector General may at any time be removed, but only upon the written concurrence of at least nine members of the 11-member Board. The current law only requires a simple majority of the Board to remove the IG, namely, six members.

    Today's hearing will examine whether LSC's Inspector General needs increased protection from retaliation by the Board of Directors, as provided by H.R. 6101.

    The Legal Services Corporation's Board of Directors hired Kirt West as the LSC IG in 2004. One of his first reports was issued in response to an inquiry from this Subcommittee regarding the lease arrangement for LSC's headquarters. Rather than accept the IG's report on the lease and cooperate in implementing his conclusions, the LSC Board of Directors instead rejected the report and contemplated removing the IG.

    Whereas the most important characteristic of an Inspector General is independence, there would appear to be an obvious and inherent conflict between any IG and the agency for which he or she serves. The IG is charged with oversight of the functioning of the agency and must, as a matter of course, conduct investigations of those who control the agency—the same people to whom he or she reports and with whom a working relationship must be maintained.

    It is quite clear, based on comments made by LSC Board members, that they either don't understand the concept of an IG or have no respect for an IG.

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    I drafted H.R. 6101, the ''Legal Services Corporation Improvement Act,'' to provide some greater degree of independence for LSC's IG. I must stress that this measure was not drafted in response to problems limited to the current Board and IG, but in response to a pattern of problems that predate both the present IG and LSC administration. I cite a letter of support for this legislation from LSC's former Inspector General, Ed Quatrevaux, which underscores the need for H.R. 6101. On unanimous consent, I ask that a copy of this letter be included in the hearing record. Hearing no objection, it is so ordered. He states, ''I fought numerous challenges to IG independence with the LSC Board of Directors and headquarters' management. My understanding that the current IG is facing many of the same problems with a different Board and management leads me to believe that LSC's propensity to challenge the authorities and independence of the IG is an institutional problem.''

    Other agencies have experienced similar issues with their IGs. To remedy the conflict in two agencies, Congress created a bar for dismissal of the inspector general for the United States Postal Service and a bar for the United States Capitol Police, which is higher than that proposed in H.R. 6101 for the IG at LSC. I expect David Williams, our witness from the Postal Service, will explain why such protections for inspectors general are necessary.

    Mr. WATT. Thank you, Mr. Chairman, and thank you for convening the hearing, I guess. For over 3 decades the Legal Services Corporation has provided legal services to the poor. Today there are currently more than 45 million Americans who qualify for assistance from one of the Legal Services' 143 grantees nationwide. Legal Services clients are as diverse as our Nation, consisting of individuals of all races, ethnic groups and ages. They include the poor, working poor, veterans, family, farmers, people with disabilities and victims of natural disasters. More than two-thirds of the Legal Services Corporation's clients are women, most of them mothers.
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    Because the Legal Services Corporation receives Federal funds, it is certainly appropriate that Congress provide oversight. The hearing on H.R. 6101 is the product of perceived threats to the independence of the Inspector General. I would suggest to you that a bill introduced on September 19th, I guess having a hearing this soon shows the power that a Chairman in our institution has and perhaps indicates some institutional problems, too.

    But that aside, Congressional oversight is certainly a valuable tool and one which enables us to ensure that Federal agencies and entities within our jurisdictions are operating effectively and within the mandates of the law. But Congressional oversight is a very powerful tool and must not be misused or abused.

    In the past 2 months, newspapers and television accounts have vilified the leadership of the Legal Services Corporation based upon leaks apparently from Hill staff or from the IG's office itself. These leaks from a then ongoing investigation were inappropriate and unprofessional and, as it turns out, mostly inaccurate.

    The IG's report provided to us yesterday has found some criminal violations, no deliberate malfeasance and in most instances no disregard for LSC policy. At most, the Inspector General has found that perhaps there should be a policy where there is none and LSC, according to his cover letter, has agreed to comply.

    However difficult this investigation was for all involved, I simply do not believe that Congress is in the position to referee every discovery dispute or police every personality conflict that understandably arises in the course of IG's investigations.
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    There are processes in place to resolve those disputes and congressional intervention in the midst of pending investigation has proven not to be all that constructive. The LSC board is a volunteer, presidentially appointed Board. And this Congress seems to be giving it more trouble since this President has been appointing it than when other Presidents were appointing.

    If we are to continue to attract qualified, dedicated professionals to fill these positions, they must be assured that they will not be subject to abuse and harassment. These are troubling allegations, however. They are troubling allegations that former disgruntled employees of the LSC who now happen to be Congressional staff have been very heavy handed, biased and the source of many of the substantiated complaints by the IG. Indeed, the IG's letter transmitting his report on certain fiscal practices of the Legal Services Corporation concedes that Congressional staff were the source of certain allegations he chose to investigate. While I do not know whether former employees of LSC who are now Congressional staff have misused their positions to harass or retaliate against LSC, I do believe that we must be especially vigilant in ensuring that all inquiries from this Subcommittee and from the Senate Subcommittees are made in good faith.

    The bill before us today in my estimation unreasonably raises the bar for removal of an Inspector General by the LSC board excessively high, higher in fact than that required to remove a Board member. While any IG must be permitted to do his or her job without interference, the normal give and take of internal orders and investigations does not rise to the level of obstruction presumed by this bill.

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    Moreover, the suggestion that a Board with the statutory power to hire and fire cannot exercise the power to dismiss an IG simply because he is investigating or has the authority to investigate the Board would probably invite endless illegitimate investigations by an IG desperate to maintain a job. If we are to create such an incentive, at least we are to provide for attorney fees if somebody finds that these things get personal and bear no fruit.

    Similar provisions were included in the Independent Counsel Act to provide balance to the otherwise extraordinary, unfettered, independent, conferred response upon the special counsels under that.

    I look forward to hearing from the witnesses. And I would have to say, Mr. Chairman, that this is yet another one of those instances where it seems to me that we are proposing to legislate to get a result rather than legislating to have a policy and practice that makes sense in the whole context of what we are doing.

    We can't pick and choose results here. Sometimes we like the result, sometimes we don't like the result. But there ought to be processes in place that are consistent and not just based on personal animosities. With that, I will yield back the balance of my time.

    Mr. CANNON. Without objection, the gentleman's entire statement will be placed in the record. Hearing no objection, it will be so ordered.

    [The information referred to was not available at the time of the printing of this hearing.]

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    Mr. CANNON. Now will the gentleman be agreeable to inserting his legal fees in the bill and getting his co-sponsorship?

    Mr. WATT. No, because I haven't looked at the bill. I mean, you introduced the bill September 19. Today is September 25. If you had any——

    The CHAIRMAN. It is a very short bill.

    Mr. WATT. If you had any interest in getting my support for this bill, I am sure I would have known about it before it got introduced.

    Mr. CANNON. I am certain, sufficiently certain that staff has been talking about it on both sides. But if you would like to negotiate about attorney fees, I would love to include that into the system.

    Without objection, all Members may place their statements in the record. Without objection, the Chair will be authorized to declare a recess at any point. Hearing no objection, so ordered. I ask unanimous consent that Members have 5 legislative days to submit written statements for inclusion in today's hearing record. Hearing no objection, so ordered.

    I am now pleased to introduce the witnesses for today's hearing.

    Our first witness is Kirt West, the Inspector General for the Legal Services Corporation. As I previously noted, he has served in this capacity since September 2004. Prior thereto, he served in very executive positions at the U.S. Postal Service Office of Inspector General from 1998 to 2004.
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    His Government service also includes a stint as assistant counsel to the Inspector General in the Central Intelligence Agency. In addition, he has spent more than 10 years at the United States Department of Labor as assistant counsel to the Inspector General.

    Mr. West received his undergraduate degree from Lawrence University in 1969 and earned his Juris Doctor from the Northwestern University School of Law in 1984.

    Our next witness is the Inspector General for the U.S. Postal Service, David Williams. His office has oversight responsibility of the U.S. Postal Inspection Service, a Federal law enforcement agency within the Postal Service. Mr. Williams was sworn in as the second Inspector General at the Postal Service in August of 2003.

    Mr. Williams previously served as IG for five Federal agencies. He was first appointed by President George H.W. Bush to serve as the IG for the U.S. Nuclear Regulatory Commission from 1989 to 1996. President Clinton next appointed him as the IG for the Social Security Administration from 1996 to 1998 and thereafter as the IG for the Department of Treasury in 1998. In 1999, President Clinton named him as the first IG for tax administration of the Department of Treasury, where he directed a staff of 1,050 to detect waste, fraud and abuse. In 2001 President George W. Bush named Mr. Williams to be the Acting IG for the Department of Housing and Urban Development.

    Mr. Williams is the recipient of the Bronze Star and the Vietnamese Medal of Honor for service in Vietnam. He received his undergraduate degree from Southern Illinois University and earned his Advanced Degree in Education and a Masters in Education from the University of Illinois. He also attended the U.S. Military Intelligence Academy, the Federal Law Enforcement Training Center, and the U.S. Secret Service Training Academy. We like tough guys. Maybe I should speak generally, but I think Mr. Watt likes tough guys.
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    Our final witness is Frank Strickland, who is the Chairman of the Board of the Legal Services Corporation. He is a partner in the Atlanta firm of Strickland Brockington Lewis LLP.

    President Bush nominated Mr. Strickland to the LSC Board of Directors in 2002, and he was sworn in as a member of the Board and elected Board chairman in April of 2003.

    Mr. Strickland received his undergraduate degree from Vanderbilt University and his law degree from Emory University. He served in the U.S. Coast Guard and is Commander in the U.S. Coast Guard reserves on retired status. Also a tough guy, I might say.

    In addition, I would also like to note that that we are missing a witness at today's hearing. The empty chair at the witness table is for the Legal Services Corporation President Helaine Barnett. According to Ms. Barnett, Chairman Strickland does not believe it is necessary for her to testify, perhaps an important topic for this Subcommittee to explore with him this afternoon.

    I extend to all of you my warm regards and appreciation for your willingness to participate at today's hearing. In light of the fact that your written statements will be included in the hearing record, I request that you limit your oral remarks to 5 minutes. Accordingly, please feel free to summarize or highlight the salient points of your testimony.

    You note we have a lighting system in front of you that starts with a green light. After 4 minutes it turns to a yellow light, and then at 5 minutes it turns to a red light. It is my habit to tap the gavel at 5 minutes. We could appreciate it if you could finish up your thoughts within that time frame. We don't like to cut people off in their thinking, but I find that it works much better if everybody knows that 5 minutes is 5 minutes.
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    Other people may be joining us here. If not, we may be a little more loose than that, but it is my tendency to tap with a pencil just to draw your attention the light has run and so we will move on and then strictly abide by the 5-minute rule when we go to questioning if we have other members. If it is just Mr. Watt and me, we tend to be a little more lax on that. After you have presented your remarks to the Subcommittee, in the order they arrive they will be permitted to ask questions to that witness subject to that 5-minute rule.

    Pursuant to the directive of the Chairman of the Judiciary Committee, I ask the witnesses to please stand and raise your right hand to take the oath.

    The record will reflect the witnesses answered in the affirmative.

    [Witnesses sworn.]

    Mr. CANNON. We will start with Mr. West. Would you please proceed with your testimony?

STATEMENT OF RICHARD ''KIRT'' WEST, INSPECTOR GENERAL, LEGAL SERVICES CORPORATION

    Mr. WEST. Good afternoon, Chairman Cannon, Ranking Member Watt. My name is Kirk West. As you have mentioned, I have had nearly 20 years of experience with other IGs at Labor, CIA, and the Postal Service. I also had the privilege of working for David Williams when he was the—when I was at the Postal Service and in the capacity as IG. With your approval, I would like to submit my written statement for the record.
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    Thank you for giving me the opportunity to comment on H.R. 6101. Since the passage of the 1988 IG Act amendments, LSC has had an IG that reports to an 11 member part-time Board of Directors. The LSC board has been and is now comprised of honorable and dedicated individuals who brought with them a high degree of understanding and commitment to delivery of legal services to the poor. Past and current Boards, however, have not brought with them the same degree of understanding or experience concerning the role of the Inspector General.

    The challenges faced by the LSC IGs are longstanding. They are neither new nor unique to the current Board. The longest serving is Ed Quatrevaux, who held the post from 1991 to 2000. Mr. Quatrevaux has lent his support to H.R. 6101. He has stated the problems that I am facing, the same problems he faced with a different Board and with a different LSC management, leading him, as I have also, to conclude that LSC has an institutional problem in recognizing the proper role of the IG.

    The Board's failure to recognize the role of the IG has led some members to react negatively to my reports, calling them prosecutorial and inflammatory. However, Mr. Chairman and Mr. Watt, I can tell you that based on my experience in the IG community that my reports are no different in character than those of the other 57 IGs in the Government.

    The Board's reaction to them, however, is different than my experience at other agencies. What may seem appropriate to the Board based on their non-Federal background and limited experience with IGs are from my perspective attempts to retaliate against me for issuing critical reports and asserting IG independence. As recently as this past weekend an Associated Press article described the Board's efforts to fire me or certainly to consider firing me.
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    Mr. Chairman, you and other Members of Congress have repeatedly put the Board on notice that any attempt to remove me would be construed as retaliation for conducting the very work that you have requested. I feel that if Congress had not intervened on my behalf it would have been impossible for me to fully carry out my statutory duty under the IG Act.

    Unfortunately, my problems have continued. On August 25th, the Board's chairman and vice chairman provide a, quote, informal feedback, unquote, on my performance. This was highly questionable given that the Board knew at the time I was investigating allegations regarding expenses and other matters involving the Board. I found that not only threatening and retaliatory but also to have the potential of causing others, including Congress, to question whether the feedback could have influenced my report.

    These events notwithstanding, I am pleased to report that my staff of highly experienced IG auditors, investigators and attorneys and I have not been deterred from carrying out the IG mission. Recently, I submitted a report to the Subcommittee in which the OIG found substantial evidence that an LSC grantee, California Rural Legal Assistance, Inc., violated Federal law by soliciting clients, working a fee generating case, requesting attorney fees and associating CRLA with political activities. Yesterday, I issued a report on the investigation that you requested regarding LSC spending practices, and I will be reporting to you later on your concerns about other LSC management practices and potential conflicts of interest.

    I would like now to provide some comments on H.R. 6101, which is modeled after the similar provision of the United States Postal Service. As background, there are two categories of Inspectors General: Those appointed by the President and those appointed by their agency head. Presidentially-appointed Inspectors General cannot be fired by their agency head; only the President can do that. On the other hand, Inspectors General appointed by their agency head can also be fired by their agency head, which is the current situation at LSC. And usually it requires an appearance before the Merit Systems Reduction Board. The LSC IG, however, is an at-will employee and can be fired without cause and without a hearing. Thus, the LSC IG has the least amount of job security and therefore potentially the most easily subjected to undue or improper pressure.
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    Therefore, I support H.R. 6101 because it enhances Inspector General independence. In my opinion, H.R. 6101 is an appropriate, balanced, and thoughtful proposal to enhance Inspector General independence that will make LSC more transparent and accountable to Congress and the public.

    Mr. Chairman, thank you for this opportunity to testify before the Subcommittee.

    [The prepared statement of Mr. West follows:]

PREPARED STATEMENT OF R. KIRT WEST

INTRODUCTION

    Chairman Cannon, Ranking Member Watt, and Members of the Subcommittee: my name is Kirt West. Thank you for giving me the opportunity to comment on H.R. 6101, which will improve the ability of the LSC Inspector General (IG) to function like any other Inspector General. By way of personal background, I have been the Inspector General of the Legal Services Corporation (LSC) since September 1, 2004. Before becoming Inspector General, I served for nearly twenty years as a career Federal employee in various legal and executive capacities for Inspectors General: at the Department of Labor, the Central Intelligence Agency, and the United States Postal Service. At the United States Postal Service which is a quasi-federal agency like LSC, I worked with a Presidentially-appointed part-time Board, comprised almost exclusively of outside directors who did not have any Inspector General experience. I also worked for Inspector General David Williams while at the Postal Service.
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    Since the passage of the 1988 Inspector General Act amendments, LSC has had an Inspector General. Throughout those years my predecessors and I have reported to and been under the general supervision of a part-time 11-member LSC Board of Directors, unlike most Inspectors General who report to a full-time agency head. The LSC Board has been and is now comprised of honorable and dedicated individuals who have brought with them a high degree of understanding of the delivery of legal services to the poor, which is an asset to the position. Past and current LSC Boards, however, have not brought with them the same degree of understanding or experience concerning the role of the Inspector General. Historical and institutional misunderstanding between past and current Boards and their Inspectors General has threatened the independence and effectiveness of the LSC Inspector General.

    Efforts by LSC Boards and LSC management to stifle Inspector General independence through intimidation and retaliation appear to have existed throughout the history of the LSC Office of Inspector General. These problems are neither new to LSC nor unique to the current Board and Inspector General. The longest-serving LSC Inspector General, Edouard R. Quatrevaux, has lent his support to your bill and has stated that the problems I am facing are the same problems he faced with a different Board and with different LSC management, leading him to conclude that LSC has an institutional problem in recognizing the proper role of an Inspector General. Inspector General Quatrevaux was criticized for issuing reports that the former Board did not like and for communicating with Congress. He reported to Congress that the Board's criticism posed a potential impairment on his independence. As a result, GAO was called in to intervene but the disagreement between the Board and the Inspector General about the Board's proper role in evaluating the Inspector General still remains unresolved.

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    As a preliminary matter, I would like to note that I am not completely comfortable commenting on H.R. 6101, a legislative proposal that would have an impact on the Inspector General office that I currently hold. As someone who has worked in the federal Inspector General community for so long, it has become second-nature for me to try to ensure that whatever I say or do is legal and ethical and impartial. Ordinarily I would not volunteer to comment either one way or the other on a matter such as H.R. 6101, which could affect me personally. However, at your request I am prepared to offer my views concerning the proposed legislation. H.R. 6101 is similar to a provision enacted for the Inspector General of the United States Postal Service. The bill would, if enacted, require nine of the eleven LSC Board members to agree to remove me or a future incumbent from the position of Inspector General. It would require three more Board members than the current majority requirement of six to remove me or my successors.

    When I agreed to become the Inspector General for LSC in 2004 I was aware that there had been an Inspector General at LSC since the late 1980's. I was relatively confident that the LSC Board had gone through the same familiarization process as other agency heads in dealing with the Inspector General concept. I lived through those processes at the Department of Labor, the CIA, and the Postal Service, where those agency heads eventually came to terms with having an Inspector General who was independent, who had access to information, and who reported openly and regularly to Congress. Over the past two years, however, I have become aware that LSC Boards have not developed the same understanding of the role of their Inspector General.

    My initial experience of the lack of appreciation of the IG concept and the role of the Inspector General occurred when I issued my first report to Congress concerning the LSC headquarters lease. As I testified before this Subcommittee last June, the report made several observations, including that LSC was paying too much rent and paying higher rent than other tenants. The then 10-member LSC Board (6 of whom remain on the current Board) unanimously ''rejected'' the lease report. The report, however, had undergone a quality review that ensured it contained accurate information. The report was predicated on the work of two independent real estate appraisal experts as well as very senior and experienced career IG auditors and lawyers. The fact that the Board ''rejected'' this report was an early indication that the Board did not fully comprehend the role of an Inspector General.
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    I have taken affirmative steps to help familiarize the Board with what an independent, effective Inspector General is supposed to do. I arranged for David Williams, a highly-respected Inspector General with many years of experience, to address the LSC Board, which he did. Mr. Williams, who served not only as Inspector General at the Nuclear Regulatory Commission, the Treasury Department, the Internal Revenue Service, and at the United States Postal Service, but also as the first chief investigator at the then Government Accounting Office, spoke to the Board at length about the role of an Inspector General. In addition, I arranged for a meeting with the LSC Chairman and Senate appropriations staff to share a Congressional perspective about the role of an Inspector General and how an agency should interact with its Inspector General. I offered to arrange more such meetings. I also suggested to the LSC Chairman that we meet with the Deputy Director for Management at the Office of Management and Budget, who serves as the Chairman of the Inspector General councils. Finally, I reported my concerns to the Vice-Chairman of the Executive Council on Integrity and Efficiency in an attempt to find other, informal ways of improving the LSC Board's relationship with the Inspector General.

    The Board's failure to recognize the Inspector General's role has led some members to react negatively to my reports, calling them prosecutorial and inflammatory. However, Mr. Chairman, I can tell you and members of the Subcommittee that based on my 20+ years of experience in the IG community my reports are no different in character than those issued by other IGs. The Board's reaction to them, however, is different than what my experience prepared me for. What may seem appropriate to the Board based on the members' non-federal backgrounds and limited experience with IGs are from my perspective attempts to retaliate against me for issuing critical report and for asserting IG independence. The Board's misunderstanding of the role of its Inspector General may not be so surprising given the background and experience of most members in the non-Federal sector, which is generally unfamiliar with the Inspector General concept, a concept that was also difficult in the early years of the IG Act for some agencies.
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    For example, as recently as this past weekend, an Associated Press article quoted the proceedings of a closed Board meeting which the article described the Board's discussion about firing me. There had been previous concerns that some Board members would like to fire me. As a result, Mr. Chairman, you wrote the LSC Board in July of last year to express your concerns. In addition, Senators Enzi and Grassley wrote to the LSC Board in April 2006 informing the Board that any attempt to remove the Inspector General would be construed as retaliation and obstruction of an investigation that they, along with you, Mr. Chairman, had asked me to conduct on a number of issues involving the LSC Board and the LSC President. I feel that if Congress had not intervened on my behalf, it would have been impossible for me to carry out my statutory duties under the IG Act.

    My difficulties, unfortunately, have continued. On August 25, the Board provided ''informal feedback'' on my performance. Among other things, I was told that I take a prosecutorial stance towards management, I issue inflammatory reports and I am not a positive help to LSC. These and other criticisms by the Board are examples of a misunderstanding about the role of an Inspector General, which includes being independent and objective, obtaining necessary information, and reporting findings that could be critical of management.

    The decision of the Board to provide ''informal feedback'' was highly questionable given that the Board knew I was investigating allegations regarding expenses and other matters involving the Board. While I respect the role of the Board, which is statutorily responsible for the ''general supervision'' of the Inspector General, and while the Board may have felt its actions were appropriate from the private-sector perspective, I found the ''informal feedback'' not only threatening and retaliatory but also having the potential of causing others, including Congress, to question whether the feedback could have influenced my report.
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    These events notwithstanding, I am pleased to report that my staff of highly experienced IG auditors, investigators and attorneys and I have not been deterred from carrying out the IG mission. Recently, I submitted a report to the Subcommittee in which the OIG found substantial evidence that an LSC grantee, California Rural Legal Assistance, Inc., violated federal law by soliciting clients, working a fee generating case, requesting attorney fees, and associating CRLA with political activities. Yesterday, I issued a report on the investigation that you requested regarding LSC spending practices and will be reporting to you later on your concerns about other LSC management practices and potential conflicts of interest.

    I would like now to provide some comments to H.R. 6101, which proposes to amend the Legal Service Corporation Act to provide appropriate removal procedures for the Inspector General. In addition to the Board's current authority to appoint and remove the Inspector General, the proposed legislation states that ''The Inspector General may at any time be removed upon the written concurrence of at least 9 members of the Board.'' As background, there are two categories of Inspectors General: those appointed by the President, and those appointed by their agency head. Presidentially-appointed Inspectors General cannot be fired by their agency head; only the President can do that. On the other hand, Inspectors General appointed by their agency head can also be fired by their agency head, which is the current situation at LSC. However, because virtually every other Inspector General appointed by their agency head is also a Federal employee, they could not be fired without cause. The Inspector General at LSC, however, is an at-will employee and can be fired without cause. Thus, the LSC Inspector General stands out as the Inspector General who has the least amount of job security and therefore potentially the most easily subject to undue or improper pressure.

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    I support H.R. 6101 because it enhances Inspector General independence. The bill could go further by requiring removal for cause. At this time I would not recommend making the office a Presidential appointment. However, that is an option worth keeping available in the event it is needed. There is already precedent for Congress converting an agency-head appointed Inspector General into a Presidential appointee: this was done at the Federal Deposit Insurance Corporation and the Tennessee Valley Authority. The TVA Inspector General became a Presidential appointment as a result of the TVA Board trying to interfere with the independence of the Inspector General, resulting in a GAO investigation requested by then Senator Fred Thompson. The situation faced by the TVA Inspector General is not unlike the situation I am facing today. In my opinion, H.R. 6101 is an appropriate, balanced, and thoughtful proposal to enhance Inspector General independence that will make LSC more transparent and accountable to Congress and the public.

    There is also precedent for requiring a super-majority to remove an Inspector General. In 1996, Congress created an Inspector General at the United States Postal Service who would no longer report to the Postmaster General but instead report to the nine Presidentially-appointed Governors who, along with the Postmaster General and the Deputy Postmaster General, comprise the Board of Governors. The Postal Service opposed the creation of an independent Inspector General who was not appointed by the Postmaster General. Congress, clearly concerned about having an Inspector General removed by a simple majority of a part-time Board, enacted 39 U.S.C. §202(e)(3) stating that removal of the Inspector General required written concurrence of at least 7 of the 9 Governors. By requiring a super-majority, Congress implicitly recognized that, like at LSC, the Board could be unduly influenced by management and thereby helped balance that influence. This was the compromise struck between Congress and the Postal Service in lieu of establishing a Presidentially-appointed Inspector General.
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    Finally there are some additional reasons why H.R. 6101 is needed at LSC more so than at other agencies. At LSC it is not unusual for Board members and LSC senior managers to have close ties from working together outside LSC in the private legal services sector. These kinds of close relationships among LSC Board members and LSC managers and employees and LSC grantees and related organizations are part of the LSC culture and could be one of the reasons why the Inspector General role is not as well understood as it should be and why it is important to have an independent Inspector General.

CONCLUSION

    Mr. Chairman, thank you for this opportunity to testify before the Subcommittee. I remain proud of the work being done by my staff which has been operating under difficult circumstances. I appreciate the support you and your staff have shown both for the work we have done and for the need to ensure that LSC's Inspector General can operate as Congress intended so that you, the Board and the public can be informed by our reports and ultimately LSC can be improved for the benefit of LSC, its client community and the taxpayer public. I also would be remiss in not extending my appreciation to those new members of the Board who have been supportive of my office. As someone who respects and values the work of lawyers who serve the poor, and as someone who spent his first working years in the Cabrini Green public housing project and other inner-city slums, I can tell you that I have only the best interests of the poor at heart every day when I go to work. I look forward to ensuring that the poor will have our support by continuing to conduct independent and objective reviews so the LSC Board, Congress, and the public can be assured that LSC is being operated lawfully, efficiently, economically, and with integrity.
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    Mr. CANNON. Thank you, Mr. West.

    Mr. Williams.

STATEMENT OF DAVID C. WILLIAMS, INSPECTOR GENERAL, LEGAL SERVICES CORPORATION

    Mr. WILLIAMS. Mr. Chairman, Mr. Watt, and Members of the Subcommittee. I appreciate the opportunity to appear today to discuss the importance of Inspector General being able to speak independently about problems and concerns with an agency without fear of intimidation or retaliation.

    I began my Government career with the U.S. Army in Vietnam and then as a Special Agent with the U.S. Secret Service. I was later an investigator and manager at the Department of Labor's Office of Inspector General for a total of 15 years. Since then I have served as an Inspector General for a total of 15 years, beginning with the U.S. Nuclear Regulatory Commission in 1989. I have also served as the Inspector General for the Social Security Administration, the Department of Treasury, the IRS and as the Acting Inspector General for HUD. I have been the Inspector General for the U.S. Postal Service since 2003.

    In all of my assignments as the IG, a key element of being effective has been the ability to provide the agency's management, Congress and the public with independent reports concerning employee misconduct, agency programs and operation. Inspector Generals were established following the congressional investigations in 1974 to protect the public from Government abuse, waste and misconduct. An Inspector General must be able to speak honestly, without fear of retaliation or intimidation from anyone.
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    Anything less would have a chilling effect on the ability of Government investigators to do their jobs, and neither Congress nor the public would receive the full benefit of frank and truthful findings.

    When instances of retaliation do occur, you must take action immediately to address it. Early in my period of Inspector General appointment at the Nuclear Regulatory Commission, Congress and the NRC commission asked me to conduct a high level internal investigation. The investigation concerned allegations about the executive director who at the time was being considered for a presidential appointment at the Department of Energy.

    At the conclusion of the investigation, the executive director stepped down from his position. I also led an investigation of the President of the International Board of Teamsters while at the Labor Department. That individual complained to the Labor Secretary and the White House, but was ultimately indicted.

    I have investigated a number of other senior executives who often possessed substantial what I call clout and had influential friends. These investigations could not have been successful without the independence provided without the IG Act. The independence of Inspectors General is ensured by the IG Act's requirement that the President or the agency's governing entity appoint them. Congress further mandates that the agency not prevent or prohibit the Inspector General from initiating, carrying out or completing an audit or an investigation.

    The Postal Service Reorganization Act additionally protects my independence as IG for the Postal Service. The statute provides that the Postal Service IG may only be removed for cause and only with the concurrence of seven of the nine governors appointed by the President and confirmed by the Senate. This provision ensured that management cannot remove me for reporting information, for reporting information that they do not want me to report.
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    In conclusion, it is of paramount importance to me and to all Inspectors General that our independence be protected so that the work the Administration and the public expect can be performed under the IG Act.

    While this independence is legislated in the IG Act, I have always strongly believed that Congress and the Administration can be relied upon to enforce the rule of law.

    If it is clear that independence is being compromised and if Congress fails to act decisively, there will be little or no honest reporting, and that is not what the Government and the public deserve. Thank you.

    [The prepared statement of Mr. Williams follows:]

PREPARED STATEMENT OF DAVID C. WILLIAMS

    Mr. Chairman and members of the Subcommittee, I appreciate the opportunity to appear today to discuss the importance of Inspectors General being able to speak independently about problems and concerns with an agency without fear of intimidation or retaliation.

    I began my government career with the U.S. Army in Vietnam and then became a special agent with the U.S. Secret Service. I was later an investigator and manager at the Department of Labor's Office of Inspector General and worked at GAO. Since then I have served as an Inspector General for a total of 15 years, beginning at the U.S. Nuclear Regulatory Commission in 1989. I have also served as the Inspector General for the Social Security Administration, the Department of the Treasury, and the IRS, and as the Acting Inspector General for HUD. I have been the Inspector General for the U.S. Postal Service since 2003.
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    In all of my assignments as an Inspector General, a key element of being effective has been the ability to provide the agency's management, Congress, and the public with independent reports concerning employee misconduct and agency programs and operations. Inspectors General were established following Congressional investigations in 1974 to protect the public from government abuse, waste, and misconduct. An Inspector General must be able to speak honestly without fear of retaliation or intimidation from anyone. Anything less would have a chilling effect on the ability of government investigators to do their jobs and neither Congress nor the public would receive the full benefit of frank and truthful findings. When instances of retaliation do occur, we must take action immediately to address it.

    Early in my first Inspector General appointment at the Nuclear Regulatory Commission (NRC), Congress and the NRC commissioners asked me to conduct a high-level internal investigation. This investigation concerned allegations about the executive director, who at the time, was being considered for a presidential appointment in the Department of Energy. At the conclusion of the investigation, the executive director stepped down from his position. I also led an investigation of the President of the International Brotherhood of Teamsters while at the Labor Department. That individual complained to the Labor Secretary and White House, but was ultimately indicted. I have investigated a number of other senior executives who often possessed substantial political clout and had influential friends. These investigations could not have been successful without the independence provided by the IG Act.

    The independence of Inspectors General is ensured by the IG Act's requirement that the President or the agency's governing entity appoint them. Congress further mandates that the agency not prevent or prohibit the Inspector General from initiating, carrying out, or completing any audit or investigation.
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    The Postal Reorganization Act additionally protects my independence as the Inspector General of the Postal Service. This statute provides that the Postal Service IG may only be removed for cause, and only with the concurrence of seven of the nine Governors appointed by the President and confirmed by the Senate. This provision ensures that management cannot remove me for reporting information they do not want to hear.

    In conclusion, it is of paramount importance to me and to all Inspectors General that our independence be protected so that the work the Administration and the public expect can be performed under the IG Act. While this independence is legislated in the IG Act, I have always strongly believed that the Congress and the Administration can be relied upon to enforce the rule of law. If it is clear that independence is being compromised and Congress fails to act decisively, there will be little or no honest reporting and that is not what the government and the public deserve.

    Mr. CANNON. Thank you, Mr. Williams.

    Mr. Strickland, you are recognized for 5 minutes.

STATEMENT OF FRANK STRICKLAND, CHAIRMAN OF THE BOARD, LEGAL SERVICES CORPORATION

    Mr. STRICKLAND. Thank you, Mr. Chairman and Ranking Member Watt and Members of the Subcommittee. I am pleased to be here today to testify before you with respect to H.R. 6101, legislation that would require 9 of the 11 members of the Board of Directors of the Legal Services Corporation to agree in writing in order to discharge the corporation of the Inspector General. Accompanying me today are Professor Lillian Bevier, the Board's Vice Chairman and a distinguished Professor of Law at the University of Virginia, and Michael D. McKay, the Chairman of the Board's Finance committee. Mr. McKay is a partner in the law firm of McKay Chadwell in Seattle and a former U.S. Attorney for the Western District of Washington.
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    Both of them have traveled considerable distances today to indicate the Board's serious interest in the matters before the Committee today. And we thank you for accommodating our schedules so that we can be here today.

    For my part, I have been in the private practice of law in private practice in Georgia in law firms ranging from 4 to 100 lawyers. I'm a past President of the Atlanta Bar Association. I have also served 11 years as a member of the Board of Directors of Georgia Legal Services and the Atlanta Legal Aid Society.

    The Federal Legal Services program is often mischaracterized by some conservatives as being a liberal tool. I could not disagree more. This is a fundamentally conservative program. It is about giving poor people an equal shot to justice in our judicial system on civil matters. The leading early proponent of creating a system was Justice Lewis Powell. One of the original sponsors of creating LSC was the late Congressman John Erlenborn, who served as the most recent previous President of LSC.

    Supporters of LSC over the years have included a conservative Republican Senator, Warren Rudman, John Danforth, and Pete Domenici and Members of the House such as Bill Livingston and Frank Wolf.

    Mr. Chairman, with due respect and understanding that we are discussing a bill that you introduced, the LSC board cannot support H.R. 6101 or its predecessor, H.R. 5974. The Congress created 57 Inspectors Generals by statute. All of the IGs with the exception only of the IG of the Postal Service, to our knowledge, serve at the pleasure of either the President or the head of the agency, depending on who appointed him or her initially.
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    When the head of the agency is a multi-person body, such as the LSC Board of Directors, the decision to appoint or discharge the IG is made pursuant to the rules of the agency. In every other instance where the head of the agency is a multi-person body, it is my understanding that only a majority vote is required.

    The LSC Board of Directors operates on a majority vote based on all matters pending before it except that under the statutory language in the LSC Act it takes 7 votes of the Board to remove a director for malfeasance. While our Board at full strength has 11 directors, during my 3 1/2 years as chairman at most times there have been one or two vacancies. The Board presently only has 10 members. Thus, the effect of H.R. 6101 would be able to require actual or virtual unanimity with respect to the removal of the LSC IG no matter what the cause.

    It takes only one-half of the House and two-thirds of the Senate to remove the President of the United States. We think it noteworthy that only the LSC IG would be affected by H.R. 6101. We have been unable to discern a rationale, and none has been offered for singling out the LSC for such extraordinary treatment. My colleagues on the Board and I, all of whom were nominated by President Bush and who were confirmed by the Senate, have worked diligently and in complete good faith on all matters coming before us, including our relationship with the IG.

    Indeed, Professor Bevier and I have made several trips to Washington to personally meet with LSC management and the IG to work on communications issues and to improve the relationship between the two. We expect and pledge to continue to work on this relationship.

    As we are the Board that appointed the incumbent IG, we have every interest in his successful tenure, but precisely because we are the Board that appointed this IG we think it would be quite unwise to legislate the unusual and extraordinary job protections that H.R. 6101 provides.
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    While the Board is not permitted to interfere in actions taken by the IG, and I should emphasize that we in no case would do so, the IG is under our general supervision as we constitute the head of the agency. The power to supervise presumes the power to remove. While I have spent my career in the private sector and never dealt with an IG before I took this position, I believe this must be why Congress did not provide the kind of job protection for any IG that H.R. 6101 would create for LSC.

    I would like to touch briefly on two other points.

    First, the LSC IG has in the past year asserted that the Board should not engage in a review of his performance. The power to remove the IG, whether or not with the supervisor majority as 6101 would provide, presumes the authority to review his performance. Absent a performance review, on what basis would we decide whether to retain or discharge him.

    Moreover, the Office of Management and Budget on November 13, 1992 issued a memorandum to the heads of designated Federal entities regarding their relationship with IGs. The memorandum provides specifically that the general supervision provision in the Inspector General Act includes, quote, conducting the annual performance review of the IG, end quote.

    After our IG made the argument that we should not conduct a performance review of him, we sought outside legal counsel from Thomas Williamson, Jr., a former deputy IG at the Department of Energy. His legal memorandum states in no uncertain terms that we not only have the authority to review the IG's performance but also the obligation to do so. We would continue to be under such an obligation even if H.R. 6101 were to pass.
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    Second, there have been some suggestions that the Board should not review the IG's performance because he has been, at the request of Members of Congress, investigating certain allegations, some of which pertain to the Board.

    The Board discussed undertaking a performance review of the IG's performance in 2005, months before the March 2006 investigation commenced. That discussion predated the investigation and is in no way related to it. According to the report issued by the IG yesterday, the IG found that the Board had done nothing improper and much less illegal. That investigation has no bearing on the Board's responsibility to conduct a performance review.

    I would be happy to answer any questions.

    [The prepared statement of Mr. Strickland follows:]

PREPARED STATEMENT OF FRANK B. STRICKLAND

    Mr. Chairman, Representative Watt and Members of the Subcommittee, I am pleased to be here today to testify before you with respect to H.R. 6101, legislation that would require nine of the eleven members of the Board of Directors of the Legal Services Corporation to agree in writing in order to discharge the Corporation's Inspector General. Accompanying me today are Professor Lillian Bevier, the Board's Vice Chairman and a distinguished Professor of Law at the University of Virginia, and Michael D. McKay, the Chairman of the Board's Finance Committee. Mr. McKay is a partner in the law firm of McKay Chadwell in Seattle and a former U.S. Attorney for the Western District of Washington. Thank you for accommodating our schedule so that we can be here today.
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    For my part, I have been in the private practice of law in Atlanta, Georgia for forty years in law firms ranging in size from four to twelve hundred lawyers. I am a past President of the Atlanta Bar Association and was outside General Counsel to the Georgia Republican Party for many years and continue to represent Republican Party interests in the state, most recently filing an amicus brief on behalf of the Georgia legislative leadership supporting the State of Texas on its 2003 redistricting plan. While one piece of their plan was overturned and remanded, I would note that on the issues of concern to the Georgia legislature, we prevailed. I also served eleven years as a member of the Board of Directors of Georgia Legal Services and the Atlanta Legal Aid Society.

    The federal legal services program is often mischaracterized by some conservatives as being a liberal tool. I could not disagree more. This is a fundamentally conservative program. It is about giving poor people a shot at equal access to justice in our judicial system on civil matters. The leading early proponent of creating the Legal Services Corporation was Justice Lewis Powell. One of the original sponsors of creating LSC was Congressman John Erlenborn, who served as the most recent previous President of LSC. Supporters of LSC over the years have included conservative Republicans such as Warren Rudman, John Danforth and Pete Domenici, and Members of the House such as Bill Livingston and Frank Wolf. I will stop there for fear of leaving people out.

    Mr. Chairman, with due respect and understanding that we are discussing a bill you introduced, the LSC Board cannot support either H.R. 6101 or its predecessor bill, H.R. 5974. The Congress created 57 Inspectors General by statute. All of the IG's, with the exception only of the IG of the Postal Service, serve at the pleasure of either the President or the head of the agency, depending on who appointed him or her initially. When the head of the agency is a multi-person body, as is the LSC Board of Directors, the decision to appoint or discharge the IG is made pursuant to the rules of the entity. In every other instance where the head of the agency is a multi-person body, it is my understanding that only a majority vote is required.
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    The LSC Board of Directors operates on a majority vote basis on all matters pending before it (except that it takes seven votes to remove a Director for malfeasance). While our Board at full strength has eleven directors, during my three and one-half years as Chairman, there have at most times been one or two vacancies The Board presently has only ten members. Thus, the effect of H.R. 6101 would be to require actual or virtual unanimity with respect to the removal of the LSC IG no matter what the cause. This is highly unusual to say the least. It takes only one-half of the House and two-thirds of the Senate to remove the President of the United States.

    We think it noteworthy that only the LSC IG would be affected by H.R. 6101. We have been unable to discern a rationale—and none has been offered—for singling out the LSC IG for such extraordinary treatment. My colleagues on the Board and I, all of whom were nominated by President Bush and unanimously confirmed by the Senate, have worked diligently in complete good faith on all matters coming before us, including our relationship with the IG. Indeed, Professor Bevier and I have made several trips to Washington to personally meet with LSC management and the IG to work on communication issues and the relationship between the two. We expect and pledge to continue to work on this. As we are the Board that appointed the incumbent IG, we have every interest in his successful tenure. But precisely because we are the Board that appointed this IG, we think it would be quite unwise to legislate the unusual and extraordinary job protection that H.R. 6101 provides.

    While the Board is of course not permitted to interfere in investigations undertaken by the IG—and I should emphasize that we would in no case do so—the IG is under our general supervision, as we constitute the head of the agency. The power to supervise presumes the power to remove. While I have spent my career in the private sector and never dealt with an IG before I took this position, I believe this must be why Congress did not provide the kind of job protection for any IG that H.R. 6101 would create for LSC's.
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    I would like to briefly touch on two other points. First, the LSC IG has in the last year been asserting that the Board should not engage in a review of his performance. The power to remove the IG-whether or not with a super-majority such as H.R. 6101 would require—presumes the authority to review his performance. Absent a performance review, on what basis would we decide whether to retain or discharge him? Moreover, the Office of Management and Budget, on November 13, 1992, issued a memorandum to the heads of designated federal entities regarding their relationship with their IGs. The memorandum provides specifically that the ''general supervision'' provision on the Inspector General Act includes ''conducting the annual performance evaluation of the IG.'' After our IG made the argument that we should not conduct a performance review of him, we sought outside legal counsel from Thomas S. Williamson Jr., a partner at Covington & Burling and a former Deputy IG of the Department of Energy. His legal memorandum to us states in no uncertain terms that we not only have the authority to review the IG's performance, but also the obligation to do so. We would continue to be under such an obligation even if H.R. 6101 were to pass.

    Second, there have been some suggestions that the Board should not review the IG's performance because he has been, at the request of some Members of Congress, investigating certain allegations, some of which pertain to the Board. The Board discussed undertaking a performance review of the IG's performance in 2005, months before the March 2006 investigation commenced; that discussion predated the investigation and is in no way related to it. According to the report issued by the IG yesterday, the IG found that the Board had done nothing improper, much less illegal. That investigation has no bearing on the Board's responsibility to conduct a performance review.

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    I would be happy to answer any questions.

    Mr. CANNON. Thank you, Mr. Strickland.

    Ask unanimous consent to add Ed Quatrevaux's letter into the record. Hearing no objection, so ordered.

    Mr. WATT. Let me reserve the right to object. This is just his opinion.

    I withdraw my objection.

    Mr. CANNON. The objection is withdrawn, so ordered.

    Mr. West, based on your 20 years, actually 20 plus years, in the Inspector General service, have you ever encountered such efforts to stifle independence as you have received at LSC?

    Mr. WEST. I have not encountered such efforts. When I first started at the Department of Labor in 1986 in the IG's office, I heard the stories about the early days of where they were trying to keep the IGs from having access to documents, access to people, but I did not encounter that when I was there, that the IG concept had become premature. The same thing when I went to the CIA. They had independent IG statutory for a number of years and the agency had gotten used to the IG and the same thing with the Postal Service, with a couple of bumps because it was a relatively new IG, but the language that Congress put in giving the IG this extra job security was to enable the IG to start Congress doing its job.
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    So when I thought I was coming to Legal Services Corporation that had an IG for 16 years, I was expecting smooth sailing and I have run into a lot of obstacles in terms of access to records, took a lot of criticism of reports, trying to tell me what should be in reports. I didn't put a document in here. I should have said something differently, and I never experienced that before.

    Mr. CANNON. Ed Quatrevaux was with LSC 15 years ago or so and—have you talked to him about these things? Has he expressed the problems and can you see a thread that draws these kind of problems together that he has referenced?

    Mr. WEST. I have not talked to Ed personally. I have actually read his files, though. I have read his files where his notes to files regarding trying to curtail communications with Congress, criticizing his communications with Congress, the attempt to use a performance appraisal to get him to back off from some of the projects he was taking on. And my seniors, two of my senior staff members worked for both Ed and me and they can tell you if you can remember the movie Ground Hog Day, they feel like they wake up and it's 10 years ago.

    Mr. CANNON. I'll talk to Mr. Strickland a little later about this, but you suggested that presidential impeachment where you need a majority in the House and two-thirds in the Senate is a lower bar than having nine members of a Board to have you dismissed. That seems to me to be extraordinary because of the nature of the focus of the public and the number of people involved in impeachment.

    But in the case of a Board, what seems to me here is that you have this consistent opposition to a person who exists in what should be an aid to, what is described as a volunteer Board, so these people don't come in here with the history of the organization, they don't come in with bylaws that they insist on happening. They join the organization that has ongoing rules, regulations and legislation to guide this activity and yet there are many lawyers working with or for—or under contract through the agency who seem to be sending signals back up about what they'd like and why the Board should like that.
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    And am I missing this or has this always been the problem with Mr. Quatrevaux and others from the beginning, that there is this tension of what the Board gets in its head to do in its inexperienced nonprofessional context and what the rules and the regulations set forth.

    Mr. WEST. I don't think you are missing anything, Mr. Chairman. I think one of the other problems is that the LSC by virtue of being a D.C. nonprofit corporation is really isolated from the mainstream Federal Government. I don't have—they don't have a cadre of senior executives like the other agencies do. Say in another agency a new secretary comes in or new administrator and they may get all bent out of shape about an IG report. They have their senior executives telling them we have been through this, we understand what's going on. And it's okay. LSC doesn't have any kind of continuity like that. There are only two senior officers of the corporation who have been—remained around from the early days and with some of the information that has been submitted to you, as a result of your investigation, you may notice that both of those officers were instructed by the LSC President not to directly be in contact with the Board. So the Board didn't even have the advice of their counsel.

    And the report I submitted to you yesterday, the controller who was trying to enforce the travel contract that LSC has with the General Services Administration was not permitted to discuss the issue with the Chairman. So the Chairman did not receive information from the person who had the history and that kind of information.

    So there is a definite problem with the Board getting the kinds of information they need.
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    Mr. CANNON. My time has expired.

    Mr. Watt, the gentleman is recognized for 5 minutes.

    Mr. WATT. I guess I am having a little trouble understanding how this bill would address that last point you made there, Mr. West.

    You are saying there was lack of communication between who and the Board?

    Mr. WEST. The senior officers, the general counsel.

    Mr. WATT. Why was there lack of communication?

    Mr. WEST. Because the President of the corporation issued directions that nobody was—neither the treasurer nor the general counsel were to be in—directly in contact with the Board, that all communications with the Board had to go through her, notwithstanding the fact that they are officers of the corporation.

    Mr. WATT. And when the Board found out about that, would they have the authority to tell the Director that that is—that was something that they did not want or want?

    Mr. WEST. That has eventually changed in the last few months, but it went on for some period of time and there was an indication——
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    Mr. WATT. And we are here in legislation stating about something that has changed that the bill wouldn't have any impact anyway? Is that—I don't—Mr. Chairman, I am feeling very frustrated here because I actually think we are doing a disservice to Mr. West and Mr. Strickland and the Legal Services Corporation by making what—making something that is delicate already worse. Mr. West being here appears to me to be, and I am sure it is not his fault, very self-serving. The Board being here to testify about this bill seems to me to be very self-serving. And so nobody wins here. We are not getting any independent evaluation of whether this is a good bill or not from independent sources.

    I appreciate Mr. Williams being here. You may be the only independent person in here on this, but we can't make public policy because of some personal personality dispute between an IG and a corporation.

    And I think, I mean, I have been about at this point for a long time behind the scenes, but I think now we are at this point in front of the public view that this has just deteriorated into a petty squabble that probably nobody is completely right in or completely wrong in.

    Mr. CANNON. Would the gentleman yield?

    Mr. WATT. Not to mention the staffs of our Committees, which is what is beginning to irritate me substantially. You know, we sit in a room and talk about this stuff and we think we have it worked out and then everything that we think we have worked out gets undermined by some staff person who's got their own personal agenda at work. And now we are out playing it out in public as if we are the knights in shining armor to go and save this institution from itself.
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    These people were appointed by the President of the United States. They have responsibilities. They are all lawyers. They know how to distinguish between talking to Mr. West and making an evaluation of his performance, and the criteria that he is supposed to perform on and interfering in inappropriately with the work that he is doing. We make those judgements every day as Members of the Congress. Otherwise, I couldn't ever go up to the Intelligence Committee. I am a Member of Congress. I am communicating with my constituents every day and there are some things I can't tell him because I read it up in the Intelligence Committee.

    I can make those distinctions, and I think this Board can make those distinctions, and we are doing this corporation and Mr. West and everybody a disservice, I think, having a hearing that relegates this into some petty dispute and makes us all look bad, in my opinion.

    Now I am happy to yield to the Chairman.

    Mr. CANNON. The gentleman's time has expired.

    Mr. WATT. I ask unanimous consent for 1 minute and I will yield it to the Chairman so he can say what he wanted to say when he tried to interrupt me and when I got up on my soap box.

    Mr. CANNON. If I knew you were getting on your soap box and going on a roll, I wouldn't have asked for time. Thank you for the 1 minute.

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    Let's go to a second round if that is okay. And so I'll recognize myself for 5 minutes.

    Oh, I am sorry. We do have Mr. Franks here. And that means I probably need to accept your motion or your unanimous consent. And so I have 1 minute to respond.

    There are a couple of things that are disconcerting to me that you talked about, the first being that this is a Board that is being run by people who are professionals. Having served on a Board and watched what has happened with Boards and the fall out that we have had at major corporations, recently including Hewlett Packard, odd problems subject to the mind that members of the Board should be saying to themselves I have a fiduciary position and I need some help. In fact, I might just ask Mr. Strickland, is it true that Ms. Barnett told the treasurer or the general counsel not to talk to members of the Board?

    Mr. STRICKLAND. The way Ms. Barnett has organized the operation, we have a chief administrative officer. And the treasurer reports to the chief administrative officer. When they make presentations to the Board, when they, the chief administrative officer and the treasurer make presentations to the Board, they do so jointly. So the Board has access to the treasurer.

    Mr. CANNON. Has she said to any officers at LSC that they shouldn't talk to Board members?

    Mr. STRICKLAND. I don't know.

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    Mr. CANNON. Well, then we will leave it at that. But let me say that is appalling to me. I don't know how anybody could be on a Board who doesn't feel like he had the opportunity to walk into any employee's office, anybody's office and——

    Mr. WATT. Can I reclaim my time? It might be appalling to you, Mr. Chairman, but that is a level of micromanagement that I think is not befitting this institution, the Board or this Congress and, you know, if we start micromanaging at this level, it is appalling to me.

    Mr. CANNON. I think the gentleman is correct that any Board member who goes in to a secretary and looked over his shoulder while he is typing is probably an idiot. Unless there is something for that.

    Mr. WATT. That is not what I am talking about. I am talking about us looking over the shoulder of the Board of—you know, hey, I wouldn't any more condone the Board going in and looking over the shoulder of a secretary than I would condone the Members of Congress going in and looking over the shoulder of the Board.

    This Board has responsibilities. It has not violated those responsibilities that has been able to decipher. It has not violated those responsibilities even so near as the reports that Mr. West has submitted to us. And yet because we don't like lawyers or we don't like the Legal Services Corporation, we are out there micromanaging the business of this Board in a way that I think is inappropriate.

    Mr. CANNON. Will the gentleman yield?
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    Mr. WATT. Yes, I will, and I will ask for another minute so you can respond to that.

    Mr. CANNON. The point the gentleman is making is very, very important. The point is that we should not be micromanaging Legal Services Corporation and no Board member should go look over the secretary's shoulder. That said, if a Board member doesn't have the ability to look over a secretary's shoulder, if he doesn't have the ability to get to books, if he doesn't have the ability to look at whatever information he feels is important so that his corporation or in this case this Legal Services Corporation can operate in a reasonable fashion; that is, if he can't take on the responsibility that he actually holds to effectively perform his duties, then he is not going to work very well.

    We don't have shareholders of LSC. We have taxpayers and our role is to make sure the Board is performing its function. We have had very serious discussions about what we are going to do with the building that you have purchased or worked with Friends of Legal Services to purchase. We have some fundamental problems here where I think there is a true breakdown of understanding by Board members, and I think this was the deal you were talking about, Mr. Watt. There are some—I believe that what I see here are members of the Board who are getting the perks of an operation who are being directed by staff but who are not using the Inspector General for the purpose that he exists, which is to protect the Board from allegations of impropriety or for overseeing an operation that there is impropriety going on.

    That is what I think this hearing is about. It is oversight of those things, and the issue about the reports that the Inspector General, Mr. West, has issued are not so much on point. It is the reaction of the Board to those reports that I think is significant here.
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    Mr. WATT. Mr. Chairman, I yield back the balance of think time if I have any.

    Mr. CANNON. The gentlemen yields back. I doubt he has any. But the Chair appreciates his indulgence and the Chair recognizes the gentleman from Arizona for 5 minutes.

    Mr. FRANKS. Mr. Chairman, I am learning a great deal here. Could you entertain—could I yield additional time to you, sir?

    Mr. CANNON. I have a number of other questions if you don't have any.

    Mr. FRANKS. I would be glad to yield.

    Mr. CANNON. I'll take your time and probably my time again.

    We have distracted somewhat Mr. West.

    Mr. Williams, you have heard the discussions between the Ranking Member and me. Do you have comments on the issue?

    Mr. WILLIAMS. Broadly speaking, the job of the Inspector General is a difficult one. I've investigated the heads of most of the departments and agencies that I have been a member of. With regard to Boards, they are normally evenly split. And it isn't unusual to vote along partisan lines. So a super majority is something that I take comfort in. And many times in the investigations that I conduct, members of the commission and now the Board are a party in interest and sometimes they are even the subject of the investigation.
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    I think people have a natural tendency to want to tell the truth, but they ought not to have to choose between telling the truth and feeding their families.

    What seems to have occurred here, the timing between the investigation and discussions regarding firing Mr. West are very instructive and very damning and very serious. And I consider this a very serious matter, and I think that any provision that will provide levels of security for Mr. West and speaking the truth to powerful figures is welcome and is needed.

    Mr. CANNON. So what you are saying as opposed to what Mr. Watt is saying is that this is an important investigation and needs—or this bill and what we are doing here is not micromanaging but creating a context that makes sense?

    Mr. WILLIAMS. I think if you don't protect people speaking the truth, there are going to be a lot of people that won't tell you the truth. This was done at your request, I understand. It is the duty of the Committee to join in an effort to make sure that retaliation doesn't occur. In the case of TVA and HUD and other instances where this sort of thing occurred, legislation followed and strong Congressional action followed, and I think it is appropriate in this instance as well if this is what it looks like.

    Mr. CANNON. Mr. West.

    Mr. WEST. Well, I would like to follow up with one example of, I think, sort of what is going on and again, as I said, I am trying to keep this off any kind of, you know, personal dispute or whatever. But back a year and a half ago your Subcommittee asked me to look into the lease and I issued a report, as you noted in your comments, Mr. Chairman, that the—my lease report was rejected subsequently to that. Your Subcommittee held an independent hearing, arrived at basically the same conclusions that I did regarding the building in the House appropriations.
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    Mr. CANNON. In fairness, there was no testimony that contradicted your position. The amazing thing was that having said that, it all turned on whether or not there was a conflict of interest. Someone I believe on the Board of LSC resigned because of the obvious conflict of interest. Others wanted to pretend the conflict didn't exist. We bent over backwards to try to construct a context where that would be straightened out, and I think we are of one mind on that issue. And yet we are here without that fundamental conflict having been resolved and we created I think the—I think we bent over backward to create a context where we could solve that problem about using those and others.

    Mr. WEST. I had the privilege of, you know, or happened to look and be able to read some closed transcripts of the Board's performance review of me which, by the way, I am entitled to under the law. So it—I got them in the course of investigation by—I am also entitled to them on a case involving the firing of the first LSC IG back in 1991, I believe.

    And what I found was that there is still disagreement over my issuing this report on the lease, notwithstanding the fact that the House, in the House report on appropriations, which was adopted by the conference report in which the conferees told the LSC that they needed to negotiate a more reasonable rent rate and try to lessen the amount of space they need.

    So I'm sort of in a situation where I provided a report to the Congress. I believe I did, on my professional standards using independent outside appraisers who were referred to me by the General Services Administration and the facilities department Postal Service, I issued the report. Congress agreed with me. And I hear from the Board that my performance is bad because they disagree with how this lease report was issued.
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    I then find that I have been criticized because I didn't respond to why a particular appraisal—lender's appraisal—was included as part of my lease report. I hadn't seen it. I was told you didn't respond to our concerns, and I issued two reports regarding why I didn't consider it relevant.

    And I don't know what to say when I am being criticized for things that I in fact have done, that I have been told that I haven't done, and I have done it. I have done things that Congress has agreed with and the Board tends to still disagree with my findings as well as Congress' findings.

    Mr. CANNON. The time of the gentleman from Arizona has expired.

    The gentleman recognizes himself for 5 minutes. Maybe this is a good time to shift to Mr. Strickland. You have heard the discussion here about whether this is relevant or important or micromanaging. And yet you are the chairman. You are concerned about your reputation. I know this is a matter of great importance to you. We have talked about the difficulties that the building represents.

    Do you recognize the problem of a Board that rejects a general counsel—an inspector general, instead of using that inspector general to help protect the Board, its chairman and members and their reputations?

    Mr. STRICKLAND. It is correct that the Board disagreed with the findings in that report. By way of follow-up to that, Mr. Chairman, we have taken two approaches to resolve that problem. One is——
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    Mr. CANNON. Mr. Strickland, would you mind focusing on the question, which is, as the chairman of the Board, aren't you concerned that you have someone who really is independent on the outside, who acts as an agent to protect you and your reputation and the reputation of the Board?

    Mr. STRICKLAND. We appreciate the role of the inspector general and we are working very hard to gain a better understanding of the proper role of an IG. As I said a moment ago in my opening statement, none of us came to the Board with any experience with the inspector generals. It is a foreign concept to us.

    Mr. CANNON. Have you served on boards of corporations?

    Mr. STRICKLAND. No publicly traded corporations, no, sir. Nonprofits.

    Mr. CANNON. Have any of your members that you know of served on boards of publicly traded corporations?

    Mr. STRICKLAND. Not to my knowledge.

    Mr. CANNON. Well, I certainly hope to the degree you have input, and we certainly will take the initiative to bring people on the Board—actually, I do know Tom Fuentes is on the board of at least one—a publishing company.

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    Mr. STRICKLAND. That is correct. I don't know that that is public, but he is on that board.

    Mr. CANNON. That is not a public corporation, I don't think. Mr. Strickland, what I think we need here is a recognition of the role of a Board member in the context of the terrific legal responsibilities and burdens that come with being on a Board. Now, that is a little different when you are on a public board with funding—taxpayer funding. But I think that makes our role overseeing it a little more poignant than perhaps other activities. But you know, do you have lawyers on the Board who are corporate lawyers?

    Mr. STRICKLAND. Yes.

    Mr. CANNON. And who serve as general counsels for public or nonpublic——

    Mr. STRICKLAND. I presume they do provide general counsel advice, yes. And I do myself for some clients.

    Mr. CANNON. I apologize. I interrupted you and you had something else to say.

    Mr. STRICKLAND. I was going to say with respect to the lease, it is true we had a disagreement with the lease report. It is also true, I think, that I don't know anyone in the room would say inspectors general are infallible. So I think it is our responsibility to speak up if we have a disagreement, and we have done that.
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    Most of our disagreements with Mr. West have had to do with style rather than substance, and omissions of things that we thought were material to his reports. With respect to the lease, we attempted through the appropriations process to get some language that would help us on the ultimate ownership of the building. That process did not work. I wrote you a letter a few months ago suggesting another alternative for protecting LSC's ultimate ownership in the building, and I would like to explore that with you on another occasion, rather than in detail. But we have had not had a chance to discuss that letter since it was sent.

    But it was a proposal that would provide for a supermajority vote to Friends of LSC, who is our landlord, and would also add some representatives of LSC to the Friends board, and impose the supermajority requirement before that board could take any action that would be detrimental to LSC. We thought that was the only safety valve we could think of that would have additional protection to the LSC's ultimate ownership of the building.

    Mr. CANNON. My time is about to expire. But let me just ask, I have been personally involved in the issue of the building, and I talked to the Chairman of the Subcommittee, Mr. Wolf, who has a long association with LSC. And I thought we were making progress there. What happened between you and the Chairman of the Subcommittee that I'm not aware of that derailed ownership of the building by LSC?

    Mr. STRICKLAND. I am not sufficiently conversant on appropriations language to give you an intelligent answer to that.

    Mr. CANNON. Were you involved in those discussions or was it someone else on your staff?
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    Mr. STRICKLAND. Someone else on the staff. And the advice given to me was——

    Mr. CANNON. Mr. Polgar raised his hand.

    Mr. STRICKLAND. Yes, I believe he is the one who had those discussions, and I can't give you an intelligent answer to that, other than my understanding is that we were not able to work out any appropriations language that would help us in that regard, although we made the effort.

    Mr. CANNON. Thank you. I see my time has expired Mr. Watt, are you interested in another round?

    Mr. WATT. Mr. Chairman, I think I will pass.

    Mr. CANNON. Mr. Franks.

    Mr. FRANKS. Mr. Chairman, do you need any additional time?

    Mr. CANNON. I do.

    Mr. FRANKS. Mr. Chairman, I would be glad to give it to you, sir.

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    Mr. CANNON. I thank the gentleman for yielding.

    Mr. WATT. If I had known you need additional time, I would have been happy to yield to you also. I just want the record to show that.

    Mr. CANNON. I apologize for keeping the gentleman here longer, but I would really like to work through some of these questions.

    Mr. West, I have heard from Mr. Strickland that the situation at LSC is no different from the situation at other entities with inspectors general appointed by the head of the agency. Do you agree with that?

    Mr. WEST. I do not completely agree with that. I'll give you an example. At the Postal Service—and it is actually something I have mentioned to Mr. Strickland some time ago—but the Postal Service, the part-time governors have their own employee that works directly for the governors, who is not part of the management and does a lot of the day-to-day work. That is different than LSC where the Board relies on management to provide responses to it. Management prepared much of its response in the lease report. Management provides responses for its response to my reports and the semiannual reports to Congress and other things. So there is a tremendous reliance that the Board has on the very management that I am auditing and investigating to prepare information, provide information for it.

    That is very different from the Postal Service—Mr. Williams could explain in greater detail—how the governors have their own employee whose only obligation is to be—to work for the governors. These employees then deal with both the inspector general and the postmaster general. And they're able to synthesize the important issues that need to go up to the governors. So it is a very different model.
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    Mr. CANNON. Mr. Strickland has suggested that the differences between you and the Board are differences of style. Is it a matter of style? Is it a matter of personality? Or is there something institutional here that is difficult?

    Mr. WEST. It must be institutional, because the style that he is referring to—the IG reports that I issue are no different than the IG reports I issued and was involved in issuing when I was at Department of Labor, at the CIA, and the Postal Service. They are no more, quote, inflammatory, unquote, and no more prosecutorial.

    So I think I am doing the job that Congress put me in to do that the IG Act says I should do. I am doing the same job that IGs are doing throughout Government. So I don't think that the problem is with the IG.

    And looking at Mr. Quatrevaux's notes from the past, it was the same thing. I think there is a—there is something within the history—the way that the LSC is created, its culture or something, that is creating an aversion to having an independent IG who can report directly to Congress. And I think it is just different. I have not done a full analysis of it but that is my conclusion.

    Mr. CANNON. Thank you.

    Mr. Williams, based on your considerable experience in the inspector general community and your understanding of what is happening at LSC, do you believe that H.R. 6101 is an appropriate measure? And do you have any other recommendations?
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    Mr. WILLIAMS. As I said, the provision in the Postal Reorganization Act is one that I find comforting. It does—the provision would assure that the decision to dismiss the inspector general be taken very seriously and not be taken in the heat of the moment and that it not be a partisan decision.

    And I think that in a job such as the inspector general, where you do speak frankly and you do conduct investigations that can be embarrassing or that can even involve criminal matters concerning the Board in this case, that that kind of—that kind of considered judgment—it becomes very important.

    Mr. CANNON. And do you think this bill—two questions since my time is about to expire—this bill will help in that regard? And, secondly, it is apparent the LSC is having difficulty recognizing the appropriate role of the IG. I understand you addressed the Board on this topic. Did you give the Board any advice at that time and is it still relevant today? Do you have any advice to the Board in coming to terms with the concept?

    Mr. WILLIAMS. Actually, before Mr. West, Mr. Quatrevaux did ask me to come and speak to that Board as well. And it was the same issue. And on both occasions with both boards, I attempted to explain the importance of independence and being able to speak honestly about the things that you found, and that the purpose of the inspector general was to investigate waste and fraud and abuse and assure integrity within the workforce of the department.

    I am not sure about the culture. I'm not close enough to it. But it is very unusual for me to have been asked to speak to both boards. Something—something inside that apparatus is causing a level of disrespect to be directed toward the fact-finders that can't be healthy.
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    Mr. CANNON. I have been asking Mr. Strickland about this. There does seem to be something missing. Is that just perhaps a lack of experience with the responsibility that the Board has in the case of LSC to taxpayers? Or is something else——

    Mr. WATT. Chairman, I reclaim my time and yield you my 5 minutes.

    Mr. CANNON. The time has expired. I thank the gentleman. The gentleman is recognized for 5 minutes and yields to the Chair. Thank you.

    Mr. WILLIAMS. It could be that it is very difficult for people that have a very brief, part-time presence in the city to grasp the principle of this kind of hard-hitting reporting that was required of the inspector general. But it came about as a result of abuse within the Government and it was intended to be a very strong tool. And it could be that there is a difficult learning curve. And as Mr. West said, apparently there is not a permanent staff there to help the Board with the learning curve.

    Mr. CANNON. Thank you, Mr. Williams.

    Mr. Strickland, I know Mr. Watt needs to leave, but I have many questions, although we have made some serious progress, I believe, here.

    In the Associated Press this morning, Mr. Polgar, who is the LSC Director of Government Relations and Public Affairs said: The board of directors never threatened to fire him and had no plans to take action in April when the lawmakers' warning letter arrived.
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    However, at your Board meeting in January, Board members said various things. Do you recall that discussion of Mr. West's activity in that Board meeting? It would have been, I think, in January.

    Mr. STRICKLAND. I do recall that.

    Mr. CANNON. Is what Mr. Polgar said consistent, do you believe, with what happened at that meeting?

    Mr. STRICKLAND. It's important to note, Mr. Chairman, that the discussion in January 2006 pertained to Mr. West's performance during 2005, and has nothing whatsoever to do with the current investigation, which he undertook in March or April of 2006. It was past history that was being discussed. And a number of Board members at that meeting indicated dissatisfaction with Mr. West's report—reports—and found his work product shoddy, to quote one Board member.

    Mr. CANNON. And what was that work product? Was that the Georgetown building?

    Mr. STRICKLAND. It was one of his reports; I don't remember which one.

    Mr. CANNON. You don't recall a discussion about the Georgetown building in particular?
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    Mr. STRICKLAND. I can't connect that description to a particular report. But the point I'm making is, it was a discussion of his previous work history and not having anything to do with the investigation that he has been doing this year.

    Mr. CANNON. Mr. Polgar referenced April. That is this last April, the letter that we sent. And I believe that the meeting that we are talking about is the meeting in January of this year.

    Mr. STRICKLAND. Right. The meeting in January——

    Mr. CANNON. And that may have been past material, because we had had the Georgetown material already done. But things were said like he doesn't belong as inspector general of this organization. This could be interpreted as retaliation or an effort to undermine congressional restrictions. He has got to shape up or we will ship him out. I think he should be given notice; the only problem I have is how do we go about it.

    Don't those things suggest that the Board was actually going to fire Mr. West? And that was prior to the April letter that Mr. Polgar referred to?

    Mr. STRICKLAND. I can't quote from the transcript. I don't have it in front of me. But there was certainly some discussion at that meeting. There was no vote taken and no vote taken since.

    Mr. CANNON. That is true. No vote was taken because you were anticipating an appropriations cycle.
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    Mr. WATT. Mr. Chairman, since this is my time, let me reclaim long enough to suggest that all of those things you read there suggest responsible inquiries that Board members would be making about any employee of theirs.

    Mr. CANNON. Will the gentleman yield? These were not inquiries. These were conclusions. And they are conclusions——

    Mr. WATT. You say that they are conclusions, but no action was taken by the Board. So they couldn't have been conclusions that resulted in Mr. West's termination. Mr. West is still sitting here today.

    So you know, the fact that issues get raised in a Board meeting, that's what boards are supposed to do. They have an obligation, according to a legal opinion which Mr. Strickland has referred to, to evaluate this man's performance.

    Now, I agree that they ought not be retaliating against him. They ought not be undermining the purposes for which an inspector general is employed. But it certainly wasn't related to an investigation that took place in 2006, if the conversation was taking place in January of 2006. So we are off on a far—far-out fishing expedition.

    Mr. CANNON. The gentleman's time has expired.

    Mr. WATT. I ask for one additional minute and yield it to the Chairman. That's what I took from him and I give it back.
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    Mr. CANNON. I thank the gentleman. If the gentleman would like to continue for a minute, that is appropriate. I thank the gentleman.

    Mr. Strickland, I think we've just miss mixed up a fact here, if you could get that straight for us. This is January of 2006. We sent the letter in April, but the Board meeting of January 2006 was not about vague stuff that happened in the past. It is all the stuff that related to the Georgetown office and other criticisms that Mr. West directed to the Board for the Board's consideration. And it was in response to that, that I believe these conclusory statements were made at your Board meeting.

    Do you recall those statements? Am I correct about the timing, first of all?

    Mr. STRICKLAND. Yes, I believe the discussion was in January 2006, and Professor BeVier, who chairs our performance reviews committee, reminded me that we believe that discussion occurred during a meeting of the performance reviews committee. And it was a discussion about what are our alternatives here. Can we or should we review the inspector general's performance and so on?

    So, ended up really putting that on a shelf and not delivering any feedback as such to Mr. West until much later in the year. And in the interim, of course, as he said in his testimony, he exercised his authority to obtain a copy of the closed-session transcript at which his performance was discussed.

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    Mr. CANNON. You are saying that is the closed-session transcript of the performance evaluation subcommittee of the Board?

    Mr. STRICKLAND. Correct.

    Mr. CANNON. Mr. West, you obtained a transcript. Were you thinking that was actually a Board meeting? Do you know?

    Mr. WEST. It was a performance review committee meeting.

    Mr. CANNON. Okay.

    Mr. STRICKLAND. Mr. Chairman, may I make one other point? I don't want to have the record close today without making these points. That——

    Mr. CANNON. The Chair recognizes himself for 5 minutes and we will go another round of questioning.

    Mr. WATT. Mr. Chairman, if I can just interrupt you here briefly. I have another commitment that I must go to because I'm presiding over the meeting. So it is not—I don't want to be disrespectful. I want the Chairman to go as long as he wants to with as many rounds as the Chairman wants to, but I can't be here.

    Mr. CANNON. We shall operate with decorum.

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    Mr. WATT. And since I think we are micromanaging, neither do I need to be here. I don't want to micromanage, Mr. Chairman. That is very sure.

    Mr. CANNON. I thank the gentleman. I am sorry?

    Mr. WATT. Could I interrupt long enough to ask unanimous consent to put the letter from—the memorandum to the board of directors from Covington and Burling in the record.

    Mr. CANNON. Without objection, so ordered.

    [The information referred to is available in the Appendix.]

    Mr. CANNON. If we could just take one more moment, Mr. Watt, I'd like to make the following motion: The unfinished business before the Subcommittee is the adjournment of the Subcommittee's June 28, 2005 hearing, which was recessed subject to the call of the Chair. Without objection, the aforementioned hearing is so adjourned. Without objection, so ordered. We left it open.

    I thank the gentleman for his indulgence and apologize for the time it has taken. I think that was adjourning the hearing we had before, so that record closes it out.

    Mr. Strickland, you were about to make a point. I apologize for that interruption.

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    Mr. STRICKLAND. Thank you, Mr. Chairman. I wanted to emphasize to the Committee that we have been working for months to improve the relationship between the agency and inspector general. We think we have made considerable progress in that regard. And the fact that we take this matter seriously, I think, is indicated by the presence of two of our Board members today, one of whom has traveled from Seattle to be present. I have worked on this on a personal level. I said in my opening statement that Professor BeVier and I have made at least two trips to Washington to meet directly with the inspector general and his staff, and then with management, with Mrs. Barnett and her staff, and then jointly with the entire group. And we thought those were productive meetings and we continue to—we plan to continue those efforts in the future.

    And I would point out also that as recently as last Friday in the preparation of the draft of the congressional investigation report which has now been released, we had a telephone conference discussion about some of the things that were in the report, and a good exchange between management and the inspector general and involvement of the Board relative to some of the factual assertions in the report that needed some revision. And the Inspector General's Office accepted those recommendations in large measure, and I think the report that was released is an improved product as a result of that.

    So I say all of that to emphasize that we have made a considerable investment in time and effort to work on that relationship and I am pleased to report, from my perspective, considerable progress in that regard.

    Mr. CANNON. We were talking with some particularity here about Mr. Polgar's statement to the press that the board of directors never threatened to fire him and had no plans to take action in April when the lawmakers' warning letter arrived. And you have made the distinction between the performance review and also—and the board of directors. But at the board of directors meeting, it appears that it was Ms. BeVier who is speaking and she speaks at some length, but the point of that is letting Mr. West go. She had reporting back, but she is very clear about letting him go and getting counsel to look at it and things like that.
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    Is that not contrary to what Mr. Polgar had said to the press?

    Mr. STRICKLAND. I need to ask you to put that in context. I have been talking about the January 2006 Board meeting and I don't understand whether you are talking about another——

    Mr. CANNON. You had a performance review meeting and then you had a Board meeting.

    Mr. STRICKLAND. Yes.

    Mr. CANNON. And apparently Ms. BeVier reported to the Board about the review meeting, the performance review meeting. And in that report, she was very clear that she was suggesting that this Board fire Mr. West; and that that would be, it seems to me, clearly contradictory to what Mr. Polgar told the press.

    Mr. STRICKLAND. I can't give you a good answer to that, Mr. Chairman. The context is confusing. The way you posited the question, I simply can't deal with it.

    Mr. CANNON. I mean, is the question confusing—in which case I will recast it. Or is the history confusing?

    Mr. STRICKLAND. Perhaps a little of both. I don't know whether you are talking about Professor BeVier's presentation to the January 2006 Board meeting, and then we all of a sudden jump to April when we had another Board meeting.
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    Mr. CANNON. You had a letter from us and that is the April date.

    Mr. STRICKLAND. Yes, I don't recall any action. I have not reviewed the transcripts. I don't recall any action at the April Board meeting to—with regard——

    Mr. CANNON. Well, you had two meetings in January: the meeting of the performance review board and a meeting of the full Board.

    Mr. STRICKLAND. Correct.

    Mr. CANNON. In the performance review board these quotes that I gave you were apparently made, or something like that. In the full Board we had a conclusory presentation, by Ms. BeVier it appears, where she was saying that the Board needed to fire Mr. West. That is clearly in contradiction to what Mr. Polgar told the press if that is the case, unless I am missing something.

    Mr. STRICKLAND. Ms. BeVier is here. She may clear the record on that.

    Mr. CANNON. Perhaps she can explain to you and we will go to Mr. West and just ask if you were aware of these things, did you find that intimidating?

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    Mr. WEST. Mr. Chairman, I was not aware of that at the time because it was a closed Board transcript, I had not seen it. I had been—you know, I heard sort of rumors. I had nothing specific in information because I didn't see the closed Board transcripts until sometime—I think it was probably June.

    I would like to clear up one other thing in terms of what is different about the Legal Services IG and other IGs who serve on boards. And that is something I addressed earlier, which is I am an ''at will'' employee. I can be fired without cause, without a hearing. And that is true of any LSC IG. That is different than most of all the other Federal IGs who are hired by their agencies. They have Merit System Protection Board rights and they have the rights of Federal employees. I don't have any of those rights, so it puts the IG at Legal Services Corporation in a much more tenuous position.

    And another thing I would like to make clear—I said this in my larger statement—this is somewhat uncomfortable to support a bill like this because, as Mr. Watt said, it could appear to be self-serving. But I am doing this for the institution of the Office of Inspector General, not for myself. I don't know how much longer I will be in the job but I am concerned about the long-term prospects, that if I leave, the next IG is going to go through the same thing that I went through and Mr. Quatrevaux went through.

    Mr. CANNON. That is the IG at LSC, and this bill actually would tend to have a tendency to solve that problem, would it not?

    Mr. WEST. That's correct Mr. Chairman.

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    Mr. CANNON. Has a performance review ever been completed by the Board or by its subgroup?

    Mr. WEST. As far as I know, there is—it has been told to me that they are still discussing it. It is a little disconcerting about this Covington and Burling memo, because I was told that I had an opportunity to respond to the memo before it was going to be considered; yet I have been told it is a dispositive memo.

    I would also like to point out, Mr. Chairman, that I think the memo itself is flawed. There is—and I am really surprised that a law firm such as Covington and Burling would do this—they make an assertion in one of the footnotes that the Sarbanes-Oxley Act does not apply to nonprofits, and they make a point of trying to ridicule my seasoned attorney who put this together. However, if you go to the ABA Web site and you read the Sarbanes-Oxley Act, you realize there are two provisions of the Sarbanes-Oxley Act that do in fact apply to nonprofit corporations. So I would suggest that the corporation didn't get the value of the money they paid for this opinion, if it is flawed.

    Mr. CANNON. I understand it is like $22,000?

    Mr. WEST. I have heard it is somewhere in that ballpark.

    Mr. CANNON. Mr. Strickland, have you clarified the timing here?

    Mr. STRICKLAND. I did have a chance to speak to Professor BeVier, and her recollection is that in January, both in the performance review committee and at the Board meeting, in summary form, we were considering alternatives, we were considering fairness, and we were deciding, I think, to seek advice from outside counsel in terms of whether or not the Board should even do a performance review of the inspector general going forward. It is still an open question. There is a raging debate about it.
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    Mr. CANNON. My question to you is did Mr. Polgar tell the truth when he said that the Board had no plans to take action in April? Had no—prior to April. In other words had the Board threatened Mr. West or not?

    Mr. STRICKLAND. I don't think the Board had threatened Mr. West. I take exception to that characterization.

    Mr. CANNON. What would you call it?

    Mr. STRICKLAND. I would call it a discussion of alternatives.

    Mr. CANNON. This kind of discussion, It is very long and unfortunately I don't think we can read it all. We talk about conflicts of interest, breach of fiduciary responsibilities. These are conclusions about Mr. West: ''So that to have that undermined by allegations that are deemed—that we regard as unwarranted, and that are at least, presented in an inflammatory way, . . . seems to be not in the Corporation's best interest. . . .

    ''We plan to have outside counsel review that with an eye to the possibility, and I stress that, I really stress that we are only sort of thinking about the possible worst-case scenario, which would be possibly deciding that we had to let Kirt go, and we reduce that to writing, give it to counsel.''

    And so you are going to counsel to talk whether or not—there is a lot of equivocating language in there, but you are talking about firing the guy and getting counsel to cover you when you fire him; have the counsels look at it so as to make sure that what we have done is careful enough. So we have a conclusion. We are just looking to counsel to ratify it.
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    In the context of that, wasn't Mr. Polgar's statement to the press misleading?

    Mr. STRICKLAND. I can't comment on Mr. Polgar's statement. I didn't make it and I don't care to comment on that, and I think the transcript speaks for itself as to what it says.

    Mr. CANNON. I understand the Board has not completed a performance review of the IG, yet you told Subcommittee staff last week that a review had been completed last year. Did the Board conduct a review? Is it complete?

    Mr. STRICKLAND. I would say it is in some stage of completion. The continuing debate about whether or not it is appropriate for the Board of LSC to review the inspector general is ongoing. We went through a process in the fall of 2005. We reduced that to writing. We elected not to present that writing to Mr. West. And that's my best recollection of it.

    Mr. CANNON. So when you say then that it was reduced to writing, that means that what you told staff the other day—that you completed it—means that you completed it, and now you are saying it is not completed in the sense that you haven't given it to Mr. West?

    Mr. STRICKLAND. Perhaps that is more accurate.

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    Mr. CANNON. What is the conclusion of that review?

    Mr. STRICKLAND. I don't recall the specifics of it. Ms. BeVier wrote it and I don't think it is published anywhere. I think it is in her own notes. I don't have those notes.

    Mr. CANNON. Are you aware of any instance in LSC history when the LSC president has refused to attend a hearing when her presence was requested?

    Mr. STRICKLAND. Don't have the history on that, Mr. Chairman.

    Mr. CANNON. And during a recent bipartisan briefing including House and Senate staff, I understand you emphasized that you are chairman of a part-time board, unfamiliar with the IG concept. Moreover, when speaking about your relations between the IG and the LSC, you said emphatically: ''All I know is what I am told.''

    Given this admission, why do you think it is inappropriate for President Barnett to be here today, given the fact that you lacked understanding and that she is the one who apparently tells you what you're told?

    Mr. STRICKLAND. I don't understand that question, Mr. Chairman, I'm sorry.

    Mr. CANNON. Ms. Barnett is not here today, in part because you counseled her that her appearance is not appropriate. You said in the past that the only thing you know about is what she tells you essentially, because you only know what you are told.
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    Why is it that she is not here to answer some of these questions that you are vague on?

    Mr. STRICKLAND. My understanding of her reason for not being here today is a level of discomfort relative to the fact that on its face the report released by the inspector general states that certain matters relative to Ms. Barnett are still open matters under investigation. And she—and, again, my understanding—felt that it would be inappropriate for her to testify while an investigation regarding her conduct is still ongoing.

    Mr. CANNON. Have members of the Board had a discussion about the strategy of dealing with this Committee or firing Mr. West or dealing with Congress or appropriations generally in the context of the November elections?

    Mr. STRICKLAND. No.

    Mr. CANNON. The Board has never discussed the possibility of a change in the control of the House of Representatives as it relates to your strategy at LSC?

    Mr. STRICKLAND. Not that I recall. If the Chairman is referring to something specific, I'll be glad to try to comment on it, but that is my best recollection.

    Mr. CANNON. I see my time has expired. Mr. Gohmert, do you seek recognition?

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    Mr. GOHMERT. Thank you, Mr. Chairman. I appreciate the opportunity to be part of the hearing. And it breaks my heart that anybody would have a level of discomfort if they were to come here to this hearing.

    But, Mr. Strickland, when you were having trouble understanding the Chairman's question, as a former judge and chief justice, let me explain my perspective on why it would have been nice to have the president here. I mean, you're the chairman of the board. I mean, somebody might make an analogy to the Board being a little like the grand jury, and you have the president that actually works there full time, comes and makes presentations. You have got to rely on them. You're counting on what they have to say. You don't get necessarily first person or direct evidence, you get hearsay through the president.

    And so since the president appears to gather evidence, and we like to hear evidence here, we would prefer to have second-hand hearsay from the president rather than third or fourth hearsay from people that the president tells stuff and then sends out as a barrier between him or her and this hearing.

    So it is just nice to have direct evidence or as close to direct as we can get. And I hope people here understand our concerns. My understanding is we spend about $330 million from Congress each year on the LSC. And having known people who tried to assist the poor, the oppressed, the downtrodden, often pro bono, working for basically free but being subsidized somewhat by the LSC to keep them out there in the field, helping the downtrodden and oppressed and the poor, it is kind of tough when you read that the Board of the LSC, I guess, spent over $8,700 for hotel food at its January 2006 Board hearing. And, see, it would be nice to know if any of the poor, the downtrodden, the oppressed were invited to enjoy that food with the Board of the LSC, or was that so that they could fully appreciate the plight of the poor, the downtrodden, and the oppressed?
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    LSC apparently, according to the report, spent over $100,000 since August of 2000 on coffee, holiday parties, picnics, working lunches, and business entertainment, and even thought the LSC doesn't have to follow the Federal spending practices. It is kind of nice for a group that is trying to help the poor, the oppressed, and the downtrodden if they don't look overly extravagant or twice as extravagant as other Federal agencies.

    But to spend over a million in the last 10 years on settlement agreements with 27 departing employees tells me that there was a great deal of concern about maybe the mistreating of the employees who were assisting the poor and the downtrodden and the oppressed.

    So I have concerns, again, when I read these kind of reports and then I see that the chairman of the board, rather than the one with closer evidence, closer to being direct and one step removed in the hearsay process, has to come and stand as a shield. And I'm sure you may disagree with that terminology, but if I put my judge hat back on, that is sure the way it looks from here. You got sent out as a shield from somebody who has been running things.

    And it does cause me great concern when the inspector general is in a situation of, on the one hand, rendering a report about problems within any group or agency or something like the LSC, and then, on the other hand, can be fired if he reports things that are unpleasant to the Board. Boy, you talk about a catch-22.

    Mr. West, you are not in a very enviable position. I don't know a lot of people that would want to be in your shoes, having to report sometimes negatively on the people that are out there and have the right to fire you without cause. Is that right; without cause?
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    Mr. WEST. I am an ''at will'' employee so it can be without cause.

    Mr. GOHMERT. Obviously, if you go issuing reports talking about how much they overspend at their meetings and then when the president says, well they need to do these meetings at a hotel because their conference room is too small. And then, as I understand it, you issue a statement saying that actually the headquarters meeting room is slightly larger than the rooms used at the upscale hotel, that may give them cause to want you fired. You're not being very helpful to them.

    So anyway I appreciate the opportunity to have this hearing, to hear from the folks. I have not been out here the entire time. I have been listening from the back room for much of the hearing. And it has been quite informative, but not informative enough.

    And you know, I also see analogies to the boards of directors of banks back in the eighties back in Texas, who were only told what they needed to know by the president. And while the ship was sinking, they had no idea. They had no idea. They were just given information that everything is rosy, and have a good Board meeting. And never really got to the basics.

    So Mr. West, let me just ask you, what do you think would give an inspector general over the LSC a comfort level to do the job very effectively without worrying about more arrows coming from behind than from the front?

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    Mr. WEST. I think the strongest protection that could be given is not something that Mr. Cannon has proposed, and that is to make the IG a presidential appointee, because then it would require a political process to remove the IG, which happens with those who are presidentially appointed. And I'll give you an example.

    Mr. GOHMERT. Of course, you understand that making it a political process is not the prettiest picture.

    Mr. WEST. I understand, but let me give you an example. I am friends with the IG at the Department of Agriculture. Last year——

    Mr. GOHMERT. So you do still have some friends.

    Mr. WEST. And Mr. Williams is my friend, too. She issued a report regarding the Department of Agriculture missing catching mad cow disease. When the Secretary of Agriculture wanted that issue dealt with, he was furious because, you know, she issued a report, they missed mad cow disease. That is a big concern to the American public. He went out and said he wanted her fired. But he couldn't fire her. He said it was outrageous what she did, and it was embarrassing to the Department of Agriculture, et cetera. It would have required the White House to do that. And I can tell you in Washington, that would not have flown. There is no way the President is going to fire an IG for reporting something about mad cow disease.

    That is what I meant by the political process. It gets in there and it is not just within the agency but it goes beyond that. Mr. Cannon's bill doesn't go that far. It requires a supermajority, not unlike the supermajority that Mr. Strickland was proposing for the arrangement with Friends of Legal Services with respect to the interests regarding the LSC lease. So I think it is a compromise. It is not as strong as the Postal Service bill that Mr. Williams has, because that also not only has a supermajority but it has a ''for cause'' provision as well. But I think this would give more than adequate security.
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    It is my position that given the makeup of the Board, if 9 out of the 11 would so make that decision, then the IG probably needs to go. But there would be some built-in protections, much more than there are now.

    Mr. GOHMERT. If I could finish by saying this: I know the LSC has done great things for people who could not get help any other place. And I appreciate those who have spent the time and their own resources to try to help people who desperately needed it. So don't misunderstand my feelings. I just hate to see somebody that is supposed to be helping the poor and the oppressed actually taking that money and it not getting to the poor and the oppressed or those actually doing the direct help. Thank you, Mr. Chairman.

    Mr. CANNON. The gentleman yields back. I ask unanimous consent to make the January transcripts of the Minutes of the Board and the Performance Review Committee part of today's record. And hearing no objection, so ordered.

    [The information referred to is available in the Appendix.]

    Mr. CANNON. Mr. Strickland, your vice chairman publicly indicated in a recent interview that the Board had not decided whether to fire the IG, along the lines of what Mr. Polgar said. That looks like an attempt to communicate something outside that is probably inconsistent with the truth.

    Have there been discussions about trying to look in public like you are not going to fire Mr. West?
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    Mr. STRICKLAND. Not that I recall.

    Mr. CANNON. Could there have been those kinds of discussions?

    Mr. STRICKLAND. Beyond what I just said, I don't think I can comment further.

    Mr. CANNON. Board members are quoted as saying things like the IG should shape up or we will ship him out. As you know, Mr. Strickland, the Subcommittee generally accepted the IG's findings regarding the LSC lease and held a hearing last year on the matter. After that, the IG found more examples of profligate spending at the LSC. The IG has just concluded two investigations, requested by this Subcommittee, into spending practices at LSC and violations of the law by a California grantee. Reports on these matters have just been issued.

    In what way did the Board want the IG to shape up?

    Mr. STRICKLAND. Mr. Chairman, I think there is a disconnect there between those comments which were made in January 2006 and today. That was months ago those statements were made. And only in the past day or two has—or actually yesterday, I guess, the IG report was released in final form. And only a matter of a few days before that, the report on CRLA was released. So we are in the midst of dealing with those things on a current basis. So there is a total disconnect between remarks made in January 2006 and what we have to do——

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    Mr. CANNON. Does the Board like Mr. West today?

    Mr. STRICKLAND. Like Mr. West?

    Mr. CANNON. And his work?

    Mr. STRICKLAND. I have no personal problems with Mr. West, other than some style issues, as I said a moment ago, and an occasional substance issue.

    Mr. CANNON. But those are past now? You are referring to issues that are now long since past, I take it?

    Mr. STRICKLAND. Yes. And Mr. West and I have had some frank discussions on those disagreements.

    Mr. CANNON. Have you resolved those disagreements?

    Mr. STRICKLAND. As I said a moment ago in a statement that you allowed me to make, I have invested a considerable amount of personal time in improving the working relationship between the Board, the management, and the IG. And I hope Mr. West would agree that we have had productive discussions. And I would commit on my own behalf, and I hope on behalf of the full Board, to continue that effort.

    Mr. CANNON. Does that mean we can expect to you argue strongly in favor of retaining Mr. West in a Board meeting if the issue of his being fired comes up?
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    Mr. STRICKLAND. Well, it is a hypothetical question, and I can't speak for the whole Board.

    Mr. CANNON. I'm just asking you about you arguing in behalf of Mr. West and against firing him.

    Mr. STRICKLAND. I would argue that Mr. West needs to be treated fairly and in accordance with the law.

    Mr. CANNON. If there is no further problem that gives you reason, so in fairness—I'm not sure where fairness comes in. He is ''at will'' as he pointed out. But if this bill doesn't pass and the Board wants to consider his removal, unless something new happens, will you argue strongly in his support?

    Mr. STRICKLAND. I think that what I said a moment ago is an accurate portrayal of how the Board ought to function. The Board has the legal responsibility, according to the advice we have been given by counsel, that we are supposed to review his performance and treat him fairly. I would commit to you that I think our Board will do that. I certainly am not going to advocate firing Mr. West. That is not high on my agenda.

    Mr. CANNON. But will you advocate to not fire him?

    Mr. STRICKLAND. Under certain circumstances, I might, yes.

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    Mr. CANNON. I'm sorry; you might advocate to fire him, or not?

    Mr. STRICKLAND. I might advocate not to fire him under certain circumstances, yes.

    Mr. CANNON. We have a lot of water under the bridge here. And Mr. West has done, I think, a remarkably good job in meeting the interests of this Committee. Given that context, I'd like to know whether you want to see him fired or whether you will advocate to not fire him in the future. And I haven't had an answer to that.

    Mr. STRICKLAND. I don't know what circumstances might confront us in the future, Mr. Chairman.

    Mr. CANNON. Well, you have—let's move on it.

    Apparently the LSC board does not support H.R. 6101, finding it unwise. Other than simply treating LSC differently, please describe what you think would be the consequence of passing this bill so as to make passage unwise or ill-advised. Are you aware of particulars?

    Mr. STRICKLAND. Similar to what I said in my opening statement, that during my tenure on the Board for 3 1/2 years, I don't know that we have ever had a full Board of 11 members. If we did it was only for a short period of time. We have 10 at the moment. The bill would require a vote of 9 out of 10.

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    Mr. CANNON. In your testimony you criticize us for not offering a rationale for H.R. 6101 which offers protection to the LSC IG. I find this more than a bit disingenuous in light of the actions by the LSC board to date with respect to the IG. We have all seen what the Board discussed. They discussed the firing of the IG. They did this at a time when the IG was conducting an investigation requested by me and two Senate Chairmen into the activities of the LSC and the LSC president. How can you not discern the rationale for this legislation?

    Mr. STRICKLAND. I think I need to take exception to part of your question in that, unless I have gotten confused on the context. The discussion that was contained in the meeting transcripts, as I have said several times, was in January 2006, before the committees referred this investigation to Mr. West. We have not been engaged in discussions about—to my knowledge—we have not been engaged in discussions about firing Mr. West since this investigation commenced.

    Mr. CANNON. But what we're talking about is my rationale in introducing this bill, and your discussion of firing him certainly goes to my rationale. You recognize that there is reason behind this bill?

    Mr. STRICKLAND. If your rationale dates back to January 2006, and you're saying it was not proper for us to have a discussion about the possibility, then perhaps that is some rationale.

    Mr. CANNON. Thank you.

    One final question. Do you perceive a difference between the general supervision authorized by the IG Act and the direct supervision that is the norm for employer and employee relationships? That is, how does the Board's supervision of the president, over whom the Board has direct supervision, differ from the Board's supervision of the IG, over whom you have general supervision? Given this important distinction I am sure the Board's processes for evaluating performance differed between the two. Would you please describe the approach that the Board took?
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    Mr. STRICKLAND. Your statement is correct that the Board has direct supervision over the president and can set her agenda. The Board has dual responsibility, if you will, with the Congress in terms of to whom the inspector general reports. We cannot set the inspector general's agenda, and we have not set his agenda and have no intention of doing so.

    We do have—we believe, as we understand the law and we have been advised on the law—that we have an obligation and a duty to review his performance as a part of our general supervision. But in no way have we set his agenda, nor do we intend to do so.

    Mr. CANNON. But my question went to what are the differences in how you evaluate his performance as opposed to how you evaluate the performance of the president of LSC?

    Mr. STRICKLAND. What we did with respect to that in connection with our 2005 review was present to Mr. West a series of guidelines that the agency had used historically for the review of the inspector—performance review of the inspector general, and ask for his input on those guidelines. And as I recall it, after receiving his input we used his guidelines, which are not the same as we used for the president.

    Mr. CANNON. Thank you. We appreciate you all being here. This is, I believe, an important issue: how we operate, what role the Congress plays. We have fewer investigators now than we have historically had, and I personally think we ought to have more. But in the absence of that, having an aggressive and effective IG I think is very important.

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    As I have said in the past to you, Mr. Strickland, and the Board, all should understand that I view the role of the inspector general as a bulwark of protection for you and your reputations.

    Without objection, the witnesses will have 5 days—or the panel will have 5 days to make further questions in writing available to the panel. And with that, this hearing will be adjourned.

    Mr. STRICKLAND. Thank you, Mr. Chairman.

    [Whereupon, at 3:58 p.m., the Subcommittee was adjourned.]

A P P E N D I X

Material Submitted for the Hearing Record

LETTER FROM EDOUARD R. QUATREVAUX TO THE HONORABLE CHRIS CANNON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF UTAH, AND CHAIRMAN, SUBCOMMITTEE ON COMMERCIAL AND ADMINISTRATIVE LAW

[Note: Image(s) not available in this format. See PDF version of this file for complete hearing record.]

MEMORANDUM TO BOARD OF DIRECTORS OF THE LEGAL SERVICES CORPORATION FROM COVINGTON & BURLING L.L.P.

[Note: Image(s) not available in this format. See PDF version of this file for complete hearing record.]
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JANUARY TRANSCRIPTS OF THE MINUTES OF THE BOARD AND THE PERFORMANCE REVIEW COMMITTEE OF THE LEGAL SERVICES CORPORATION

[Note: Image(s) not available in this format. See PDF version of this file for complete hearing record.]