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Legal aid groups hit by poor economy

April 25, 2009

Media reports indicate that Steven Spielberg and Kevin Bacon were among the hundreds of victims of jailed financier Bernard Madoff, but the rich and famous were not the only ones affected. Madoff’s scheme also ensnared some of society’s most vulnerable.


By Stephanie Potter
Law Bulletin staff writer

Chicago’s National Immigrant Justice Center lost two-thirds of a $720,000 grant to help detained immigrants when the JEHT Foundation, a major funder of the six-year project, went under in the wake of the Madoff scandal. The donors to the New York based foundation, which supported programs that worked toward criminal justice reform, had invested their funds with Madoff.

The goal of the NIJC’s Detention, Democracy and Due Process project is to reduce detention and to improve conditions and procedural protections for those immigrants who are detained pending removal proceedings. The project provides one-on-one help to detained immigrants, but also seeks to identify cases that would be appropriate to pursue as impact litigation.

In one of those cases, the NIJC helped win relief for a Nigerian woman whose mistake in filling out a confusing visa application led her to be detained in the McHenry County Jail for two years. Atunnise v. Mukasey, 523 F.3d 830 (7th Cir. 2008).

Oscar Martinez, Eleni Wolfe-Roubatis, Hilda Tapia, Alfredo Martinez with son Jakob. Photo by Paul McGrath

Oscar Martinez, Eleni Wolfe-Roubatis, Hilda Tapia, Alfredo Martinez with son Jakob. Photo by Paul McGrath

”Given all the work we’ve done, having to curtail that would be harsh and harmful, not just to individuals but also to the system,” NIJC Director Mary M. McCarthy said.

McCarthy is scrambling to make up for the lost funding at a time when many different funding sources are feeling the pinch. She’s hoping to draw support from a new funder, as well as seeking increased support from other funders already involved with the project.

She’s also hoping for a good turnout at the NIJC’s fund-raiser, the Tenth Annual Midwest Light of Human Rights Awards, to be held June 19 at the Fairmont Chicago hotel. The keynote address will be given by Antonio Guterres, the United Nations high commissioner for refugees.

Claudia B. Valenzuela, a managing attorney at NIJC, pointed out that those in immigration detention have no right to court-appointed counsel and often have no idea how long they will be held. This puts intense psychological pressure on detainees, she said.

”Ultimately a lot of people who take deportation and leave return unlawfully,” Valenzuela said. ”It’s tough to see someone who faces danger or who has no one or nothing left in their home country say ‘I’d rather not fight my case,’ ” Valenzuela said.

McCarthy said that with President Obama’s recent announcement of the closing of the detention center at Guantanamo Bay, Cuba, more attention has been drawn to people in immigration detention in the United States, 800 in the Chicago area alone.

”We are at a critical moment in our history,” McCarthy said. ”There is a new context and an interest in ensuring we are preserving individual human rights.”

The NIJC’s funding loss, while dramatic, is just one of many examples of how legal aid agencies have been hard-hit by tough economic times.

”It was the perfect storm,” McCarthy said. ”That was the demise of Madoff. The economy was on the decline and people wanted their money and he didn’t have it.”

Funding problems are being experienced at:

  • The Lawyers Trust Fund of Illinois, which uses interest on lawyers’ trust accounts to make grants to legal aid agencies, has seen its interest income plummet from more than $17 million in fiscal year 2008 to a projected $5.2 million in this fiscal year. Officials there had feared income could drop to less than $1 million next year. They now hope that a rule change by the Illinois Supreme Court will ensure about $2 million in revenue.
  • The Illinois Equal Justice Foundation, which distributes state-funded grants to legal aid agencies, is waiting to receive $2 million of its $3.5 million appropriation for fiscal year 2009, with the money expected to come in May or June. The agency had long pushed for a budget increase to $5 million annually, about half the average of what the 10 most populous states spend on legal aid.

Now, in light of the state’s budget woes, level funding is the goal, said IEJF executive director Leslie Corbett. That’s not what she would have hoped for at at a time when bipartisan support for legal aid funding in the state legislature has never been greater and Attorney General Lisa M. Madigan is solidly in the foundation’s corner.

”We haven’t seen big layoffs [at legal aid organizations],” Corbett said. ”But next year if our budget is cut and the Lawyers Trust Fund is at a minimal level, there is going to be some pain.”

In addition to worries about the shrinking endowments of nonprofits, some leaders of legal aid agencies say they are concerned about declining donations from private law firms, who are facing their own financial struggles.

”The level of giving is down not just for legal aid organizations but for many different types of organizations,” said Lois J. Wood, executive director of Land of Lincoln Legal Assistance Foundation, which serves low-income residents of 65 counties in central and southern Illinois.

One bright spot is a recent $40 million increase in federal Legal Services Corp. monies, which means about $1.3 million in additional funding for three Illinois agencies: Land of Lincoln, the Legal Assistance Foundation of Metropolitan Chicago, and Prairie State Legal Services, based in Rockford.

But even in the best of times, leaders of legal aid agencies say they can serve only a fraction of those who need their help. A 2005 study by Legal Services Corp., for example, found that for every poor person who receives help for a civil legal problem, at least one more eligible person is turned away.

”It’s a giant juggling act all the time versus a backdrop of a really crushing need that on your best day you can only meet a fraction of,” said Diana C. White, executive director of the Legal Assistance Foundation of Metropolitan Chicago.

White noted that since the mid-1990s, when restrictions were placed on the types of activities that could be engaged in with funding from the Legal Services Corp., LAF has tried to diversify its fund-raising.

”Now that mix of funding looks pretty good to us because things don’t go badly all at the same time,” White said.

Still, she said, ”in legal aid none of us are as good as we ought to be at attracting donations from people who have nothing to do with the law.”

And the funding squeeze on legal aid agencies is coming at a time when the economy is ”hammering poor people,” White said. White said call volume has gone up at LAF, but it is hard to measure how much the demand has increased.

”If they are calling and all the lines are busy, it just rings and rings and rings and we know they are out there,” she said.

At the NIJC, the loss of JEHT funding is not the only challenge. The agency also receives significant funding from the Lawyers Trust Fund, and some of the attorneys who in the past have volunteered to do pro bono work have been laid off by their employers. At the same time, the NIJC is facing an increased demand for its services, McCarthy said.

”Part of that is economic-driven,” McCarthy said. ”People that used to go to private attorneys who were pretty reasonable just can’t afford it.”

McCarthy said the agency isn’t filling positions when employees leave and is looking for other ways to cut costs. Similarly, at LAF, White said the agency is forgoing its typical hiring of a class of six to eight attorneys and looking closely at every vacancy to determine whether it needs to be filled.

”We’re not trying to get smaller, but we’re not looking to get bigger now,” White said.

One potential boon for legal aid organizations is that some law firms are deferring start dates for new associates and giving them stipends if they work in public interest jobs.

”We’ve had several firms that would like us to take attorneys,” said White.

But White, pointing out the cramped quarters in LAF’s offices at 111 W. Jackson Blvd., said that presents challenges too, in terms of logistics and assignments for the deferred associates.

”You cannot put these people on meat hooks or bunk desks or something,” she said.

The Chicago Bar Foundation and the Public Interest Law Initiative are coordinating efforts to place deferred associates, she said.

Still, despite the challenges of her work, White said she sees a silver lining. When she was a partner at Jenner & Block LLP, White said, she was involved in cases pitting ”wealthy person A versus big company B.”

”It was not bad work, but none of it made much difference to the welfare of the world one way or the other,” she said. ”Sometimes now I can think that I’ve really made a difference.”

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