3. Group Representation.-Groups of individuals may be represented under the program; however, if the group has any reasonable ability to generate fees, free service should not be afforded to it.

4. Unavailability of Local Counsel.-If an eligible client with a meritorious cause cannot, nevertheless, obtain counsel to handle the matter within that service area, the Executive Director of the Foundation shall be empowered to arrange employment of counsel in a convenient adjacent service area. The fees therefor should be borne by the program in the area of residence of the client. 5. Exclusions.-The program shall not pay for representations of labor unions or political organizations, nor shall it handle fee-generating cases. Also, criminal representation shall be excluded. (Some members of the Bar have suggested that criminal defendants, whose financial condition precludes assignment of the Public Defender or appointment of private counsel by the court at public expense, should have access to the program. It may be appropriate to experiment with this in one or more of the service areas to determine the cost and feasibility of such representation.)

F. Legal education

The Foundation administrator will devise a legal education program for lowincome people, utilizing the materials currently available and others to be devised that will assist in making the low-income persons aware of their legal rights and responsibilities. The objective will be to systematically reduce the necessity to utilize attorney time in some legal problem areas.

The Washington Township Legal Assistance Program was started in 1966 following months of study by members of the Washington Township Bar Association and the Alameda County Bar Association. The community that was proposed to be and was in fact served under the program included the cities of Fremont, Newark, and Union City.

It was determined that despite the generally middle class characteristics of the Washington Township community, there did exist a substantial amount of poverty in the township. According to the current year's refunding proposal of the Legal Assistance Center, 15 percent of the township's population subsists at the poverty level. While there are no ghettos in the township and no single center of poverty, there are a number of widely scattered concentrations of poverty. Typical are the Alvarado and Decoto districts of Union City and Irvington, Niles, and Warm Springs of Fremont.

The program was begun in 1966 as a Section 207 (now Section 232) Research and Demonstration effort. It was a direct grant from the Washington Office of Economic Opportunity with the Washington Township Bar Association as the grantee. The program was administered from the headquarters office of Legal Services in Washington as one of the three nation-wide judicare type of programs. At the local level, the program was administered by Legal Assistance Center, a nonprofit corporation, as a delegate agency of Washington Township Bar Association.

The board of directors of LAC, the policy making body, initially consisted of ten members of whom six were attorneys and the remaining four were representatives of the poor. Among the attorneys, four members of the board were appointees of the Washington Township Bar Association from among its membership, one attorney was appointed by the Alameda County Bar Association, and the sixth attorney was appointed by the dean of Bolt School of Law. The law school appointee served as an ex-officio member of the board without a vote. The four representatives of the poor were appointed by Fremont-Newark-Union City Economic Agency which is now called Southern Alameda County Economic Opportunity Agency, hereinafter referred to as SACEOA.

Subsequently, with the beginning of the program year on March 1, 1969, the administration of the program was transferred to the Western Region office, and the program was converted into an operating program under Section 222 of the Economic Opportunity Act. At the local level, the LAC board continued to operate the program as an arm and under the general supervision of SACEOA. SACEOA replaced Washington Township Bar Association as grantee, and LAC became a delegate agency of SACEOA. At the same time, the composition of the LAC board was changed by creating two additional positions so that there are now six directors who are representatives of the poor appointed by SACEOA and who constitute a majority of the board.

The program, as conceived, was an alternative to the traditional legal aid staff-attorney concept. It differs from the traditional legal aid in many respects. As one major point of departure, the program did away with the concept of separate but equal facilities and services for the poor. Under the program, the entire membership of the Washington Township Bar Association would participate in the program to provide legal services to the poor and be thereby directly involved with the problem of the low income comunity.

For the day to day operation and administration of the program, pursuant to LAC by-laws the LAC board of directors hired a full-time attorney-administrator. Among the qualifications for the position of attorney-administrator are that he be a member of the state bar, duly licensed to practice law in California, and that he be interested and personally involved in the problems of the poor. To assist him in administering the program, the attorney-administrator, with the approval of the LAC board, hired his own clerical staff, including a secretary/ bookkeeper, a community aid, and a receptionist/typist. The latter two members of the clerical staff have been from the Spanish-speaking community.

One of the many duties of the attorney-administrator is to interview applicants for legal services under the program. If the applicant is qualified under the eligibility standards set by the LAC board, and if the legal problem presented is such that it cannot be handled by the attorney-administrator from his office, the attorney-administrator then refers the applicant out to a member of the Washington Township Bar Association on a strict rotation basis, except in instances where the applicant indicates a preference for a particular attorney. In the latter event, the applicant is referred in accordance with applicant's preference.

To confront the situation where an applicant does not qualify under the program eligibility standards but is in need of and desires legal services, the Washington Township Bar Association entered into a contract with LAC whereby, for a contribution of $40 monthly to be paid by the Bar Association, the Legal Assistance Center would operate an attorney referral system for the Bar Association. The Bar Association has a separate attorney-referral line and pays for that telephone line. Under the referral system, LAC would collect $10 from each client referred out to a member of the Washington Township Bar Association on a rotation system. The attorney to whom the client is referred under this system would provide one-half hour free consultation and would arrange with the client for compensation in the event further services are required. The $10 collected by LAC for the credit of the Bar Association is in turn donated by the Bar Association as part of the 20 percent local contributions required under the Office of Economic Opportunity regulations.

In 1966, when the program started as a demonstration grant, the Bar requested the sum of 92,000 to operate the program for a year. Washington Office of Economic opportunity felt that that amount was insufficient for the needs of the community and the program was granted $111,000. Because the program was new and there was no backlog of cases then pending, the program was able to operate under the same grant for 22 months.

When the program became an administrative grant with SACEOA as the grantee and LAC as the delegate agency, the financial control of LAC was taken over by SACEOA. No separate year-end accounting was prepared for LAC as such. Also, as an administrative grant, it became necessary that 20 percent of the total $100,000 budget under the grant had to be raised locally. This the Washington Township Bar Association did by cash and in-kind contributions by the attorneys. Under a contract between LAC and individual members of the Washington Township Bar, the private attorneys agreed to provide the same quality legal services to the poor as for more affluent clients.

The program, since its inception, suffered through many adversities. Extreme bias and prejudice against the program has been quite apparent. Despite such prejudices, it was, as it had to be conceded by every evaluation and evaluator of the program that the legal services provided under the program have been of high quality and that the LAC clients have been treated by the attorneys no differently than the paying clients. For these services, the attorneys agreed to receive compensation at a reduced fee equivalent to 75 percent of the current Alameda County minimum fee schedule. Fee generating cases such as personal injury, probate, workmen's compensation, etc., were excluded from the program. As of February 28, 1968, we were out of funds inasmuch as all of the funds then remaining from the first grant were committed to cover liabilities on outstanding cases. OEO told us that a new grant had been approved and, pending its receipt, we should continue the program using the already committed funds. We

did so. As of June, 1968, we had a net deficit of $13,000. That is to say, we had $8,000 remaining to cover $21,000 in accounts payable to cover the pending cases. The new grant, as approved, did not relate back to February, 1968. Instead, they gave us a short grant year effectively July 1, 1968, and ending February 28, 1969. As of March 1, 1970, we became an administrative program, and we carried at that time a net deficit of approximately $6,500. That is to say, taking into account the liabilities on pending cases, the cash on hand was $6,500 short of covering the liabilities. The deficit, incidently, resulted primarily because of over expenditure in staff salary category.

Early in August it came to the attention of members of the LAC board that there were serious operational problems at the LAC office. There was a lack of rapport between the attorney-administrator and his staff; there was lack of communication between the attorney-administrator and the LAC board, to name just two. At that time, the chairman of the LAC board appointed a committee to investigate the situation.

On Tuesday, September 8, 1970, Roberto Acosta, the project director of SACEOA called an emergency meeting at which he stated that there was not enough money left in the attorneys' fees category. He stated that of the $38,000 budgeted for the attorneys' fees category, $32,000 had already been paid out during the program year which, at that time, was at a mid point. However, at the start of the program year, that is as of March 1, 1970, there was the sum of approximately $18,000 remaining from the prior grant year to cover the cases then pending. If that be the case, of the $32,000 actually paid during the current grant year, $18,000 represents the amount paid out from the prior grant year to cover the cases then pending and only the sum of $14,000 had been used for attorneys' fees category from the current grant year.

On September 10, 1970, LAC board held its regular meeting with Mr. Acosta in attendance. The financial problems and possible solutions were discussed. It was suggested that we should have the SACEOA accountant prepare a complete audit of LAC books to determine if a financial crisis was in fact existing. It was suggested that certain types of cases such as divorces and bankruptcies be handled only in emergency situations and on a more streamlined basis. It was pointed out that within certain prescribed limits, funds from other budgeted categories could be transferred so the program could continue. It was further recalled that when LAC became an administrative program under SACEOA, one of the benefits pointed out by Mr. Acosta and his office was that should we run into financial difficulties, SACEOA would be in a position to help by transferring any surplus funds to LAC. Mr. Acosta stated, when asked, that SACEOA did have such funds available, but he would not recommend any transfer to LAC. Mr. Acosta was unresponsive to these and other various alternate suggested solutions to the financial problem, assuming that the problem in fact existed. A committee was, therefore, appointed to study the problem and to report to the board on September 17 with recommended solutions.

At the same meeting on September 10, 1970, the LAC board, at an executive session, received a report of the investigative committee concerning the performance of the attorney-administrator. The board voted unanimously to suspend the attorney-administrator unless he resigns. On refusal by the attorneyadministrator to resign, he was suspended for one week.

Up until this time, the LAC board of directors meeting had usually been held at one of the attorney's offices or libraries. Prior to the meeting on September 17, 1970, Mr. Acosta informed the chairman of the LAC board that he would have two or three members of his staff and theree of four members of SACEOA board attend our meeting on September 17, 1970. The board, therefore, arranged to meet in Alameda County Water District board room. Instead of the indicated number of Mr. Acosta's organization, we had a very large attendance, variously estimated from 60 to 100. The attorney-administrator appeared with his attorney and demanded a public hearing and asked, through his attorney, to continue the hearing one week. That was done. The meeting was disrupted several times by cries from the audience, "Yankee go home," "Your houses ought to be burned", and charges of racism, etc. Two of the LAC staff secretaries passed out from fatigue, nervousness, and fear.

The committee rendered its report recommending that in view of the fact that the attorney-administrator was under suspension, each member of the Washington Township Bar donate his time on a rotation basis and interview the clients at the LAC office and, further, that he provide such further free legal services as may be necessary to those applicants found eligible under the program. Secondly, the financial status of LAC was to be cleared up as speedily as possible.

The recommendation was adopted by the LAC board and was immediately implemented by the Washington Township Bar Association. Apparently Mr. Acosta and his group did not expect the attorneys to continue the program uninterrupted by providing free legal services. He came to the meeting with a written proposal of his own, apparently distributed to his group in advance, which said proposal was distributed to the members of the LAC board that night. A copy of Mr. Acosta's proposal is attached to this letter.

In his proposal, Mr. Acosta charged the attorney members of the LAC board with conflict of interest; and, based on this alleged conflict of interest, proposed to place LAC in receivership. These charges were made despite the following:

1. Acosta had known the composition of the volunteer board of directors of LAC for over thirteen months and had known that five such volunteer members of the board are participating attorneys appointed by Washington Township Bar Association and the Alameda County Bar Association.

2. When in August 1969 the conflict of interest provisions of CAP MEMO 75 came to the attention of the LAC board, the former attorney-administrator, J. Thomas Sherrod, addressed a letter to the chairman of the board of directors of LAC giving his analysis of the applicability of CAP MEMO 75. A copy of that letter was sent to Mr. Acosta, and a copy of that letter is attached hereto. As a follow-up on that letter by Mr. Sherrod, the conflict of interest issue was orally resolved in the course of a telephone call made by former attorney-administrator J. Thomas Sherrod to the National Office of Economic Opportunity. This call was made from Mr. Acosta's office in the presence of Mr. Acosta in August, 1969, and neither Mr. Acosta nor the National Office of Economic Opportunity took any further steps with regard to charging the LAC attorney members of the board of directors with any conflict of interest allegations until Mr. Acosta's present charges made to the LAC on September 17, 1970.

3. Mr. Acosta himself and representatives of his office had in fact participated in several meetings of the LAC board of directors over the past year and at no time raised any objections pertaining to the volunteer members of the bar association serving on the LAC board of directors.

4. Notwithstanding Acosta's knowledge of the above-mentioned items, he had in fact approved the funding of the LAC for the current grant year without making known any objections or reservations he may have had concerning the alleged conflict of interest.

5. Before making the charge, Mr. Acosta made no effort to request the Office of Economic Opportunity regional counsel to render a legal opinion concerning this matter. It was explained to Mr. Acosta that under the program as it had been operated as he had well known, neither the board of directors of LAC, collectively or individually, had any control whatever as to which client or what type of case would be referred to any attorney. Further, it was explained and Mr. Acosta had known that if conflict of interest existed as to those attorneys who are members of the board, then the same conflict would apply to most of the Washington Township Bar Association by reason of their membership in the firms and the program as conceived could not possibly exist.

6. Immediately prior to making the charge, Acosta had heard the committee recommendation whereby the members of the Washington Township Bar Association would provide free legal services so the program could continue uninterrupted pending a determination of the financial status of LAC. Since the attorney-administrator was under suspension, the Washington Township Bar Association members would also donate their time to man the LAC office. Since all of the services would be free, pending an audit, there could be no financial problems or conflict of interest problems.

Despite the foregoing, on Friday, September 25, 1970, the SACEOA board's executive committee had a meeting to consider Acosta's proposal. The president of the Washington Township Bar Association, the president of the LAC board, and another member of the LAC board attended that meeting and informed the committee of the foregoing facts and further informed the committee that the Bar Association had implemented the recommendations of the LAC committee. The SACEOA executive committee continued the meeting to the following Monday, at which time it resolved to recommend to the SACEOA board that SACEOA take over the operational control of LAC. The SACEOA board adopted the recommendation of its executive committee at its meeting on September 30, 1970.

This precipitous action by the SACEOA board was reported to the Washington Township Bar Association at its meeting on October 5, 1970. With the members of the LAC board abstaining, the Washington Township Bar Association unanimously voted to withdraw and formally sever its relationship with the

In many respects the testimony that we are hearing this morning from this whole group of witnesses is some of the most important, I think, and the most relevant to the problems that we are facing in the country. So I want to extend a warm word of welcome to all of you.

As I understand, you have made some comments earlier on the suggestion by the Administration that we raise local participation from 20 to 25 percent, have you not?

Mr. BOYLSON. Yes.

Senator KENNEDY. And do you know of any group in this country, any community action group that could possibly fulfill that requirement today?

Mr. HAYES. That would be virtually impossible, and I think there are only about two or three cities in this country where they have really made a contribution to this program financially. In all of Los Angeles County it is very interesting we get 35 percent of all of the poverty funds in the state, and yet the city and the county has contributed an average of $20,000 each to the War on Poverty in that entire county. And as I indicated earlier, that county is larger than 37 states in this country. So if we are going to be relying on, say, local governments to come up, or even the local citizenry to come up with cash contributions, that really would put a lot of us out of business.

The agency that I represent in Compton, for example, the only programs they have had are what our agency has been able to develop. The city itself, its budget was smaller than our community action budget, and we were one of the smallest of the five in L.A. County. But because of that amount of resources coming in we were able to work and assist the city in giving them staff and helping them develop and get a model cities program started. So there was no manpower or anything out in that particular area. That area was between Long Beach and Watts. And so they had been kind of left out. And yet it is one of the few black cities in this country where just no federal programs were out there until the community action agency was established in 1967; and from that time, and yet, they could not now support an agency to come up with five or ten percent cash in kind contribution. This would be virtually impossible.

Mr. ROBLIN. If I could add to that from a rural standpoint in Mississippi where I am from, the results of this kind of thing would be disastrous. We have seen this through the economic development districts which are established and require local cash contribution; the result is that the staffs of those agencies are almost all white, and the responsiveness to the problem of the black community in Mississippi is ridiculous. The same effect would certainly be worsened on community action programs.

Senator KENNEDY. That is certainly my impression. Let me ask you, in terms of the proposals of the Administration of revenue sharing and the fiscal gymnastics which are associated with it in terms of the support of programs in the various communities or states, what would be the impact of revenue sharing and the fact that the community action groups would be dependent upon the cities and even the states in terms of their support for community action programs? What would be the impact of this in terms of the kinds of community action programs and community development that have been developed so far?

Mrs. SYLER. I would like to take an opportunity to answer that based on the Chicago situation. In the city of Chicago the community action agency is a city sponsored agency established by city ordinance, with the Mayor of the city as the chairman of the board.

In the city of Chicago the program would be in jeopardy if we had revenue sharing simply because a large city such as the city of Chicago has multiple problems and funds are limited. We would have to be in very stiff competition in order to acquire the kind of funds that we need to carry on the kind of programs that we are conducting now rather than have them diverted to a transit system, pollution control, housing and other kinds of concerns that the general population would have. The Mayor of the city has committed himself to the poverty programs, but he would be under very severe pressure to divert some of these funds to other purposes.

Mr. ROBLIN. I might add again from the rural south point of view we would have some rather difficult problems, particularly from the state, where just word of this occurrence has got people literally drooling at the mouth down home. We have seen some real examples of this in some recent activities on the Gulf Coast of Mississippi in manpower training programs for industry where we are literally fighting and trying to confront the agencies who a few months ago, before word of revenue sharing or this kind of thing came out, there was a little more responsiveness because they had concluded that we were going to be around and there