LEGAL SERVICES CORP. TURMOIL: Bayly ousted as president; Durant accused of funds misuseAuthor(s): Andrea NealSource: ABA Journal, Vol. 74, No. 9 (SEPTEMBER 1, 1988), p. 17Published by: American Bar AssociationStable URL: http://www.jstor.org/stable/20760082 .

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LEGAL SERVICES CORP. TURMOIL

Bayly ousted as president; Durant accused of funds misuse ABAJ/ULDIS SAULE

Eight years after President Rea gan first advocated its demise, the Le gal Services Corporation remains the focus of controversy.

The latest chapter in the long running saga involves charges that corporation Chairman William Clark Durant III misused LSC funds. The charges were leveled publicly just days after John Bayly Jr. was forced out as LSC president and replaced by Terranee Wear, a 45-year-old lawyer considered a more staunch supporter of Durant and his goal of dismantling the LSC.

At a news conference July 8, Rep. Bruce Morrison, D-Conn., called for Durant's resignation and said he may have misused LSC funds for personal legal business and for his work on Jack Kemp's presidential campaign.

As evidence, Morrison cited $5,000 in telephone bills from early 1987 to mid-1988 that included nine calls from Detroit (where Durant lives) to Kemp's Washington, D.C., campaign office, and $20,000 in ques tionable travel reimbursements, in cluding several trips to Washington that were not properly documented at LSC headquarters.

Morrison also accused Durant of "systematic efforts to undermine the Legal Services Corporation and un dercut its ability to operate within the law."

The previous week, Durant re portedly had orchestrated a cam

paign to oust Bayly, who decided to step down rather than be fired by the corporation's ideologically divided board of directors. During a closed door meeting, board members voted 6-5 to accept Bayly's resignation and hurriedly selected Wear as his re

placement.

Bayly says he doesn't know why the board sought his resignation. In siders say Bayly was not a strong enough advocate of Durant's political agenda of cutting the LSC budget from its current $305 million a year to nothing.

Bayly did not specifically criti cize Durant, but he did not rush to his defense either. In a letter to Rep. Bob Kastenmeier, D-Wis., Bayly said

William Clark Durant III

LSC staff members had searched their records but could not explain Dur ant's large travel and telephone bills.

Kastenmeier, who chairs the House judiciary subcommittee inves tigating the matter, says the whole episode?from Durant's alleged mis use of funds to Bayly's ouster?has been an outrage. "I am saddened by the fact that the very people who are entrusted to advance the goals of the Legal Services Corporation in a fair and non-political manner are the people who are attempting to destroy it in a blatantly political fashion," he said. Kastenmeier has promised fur ther hearings in the matter.

WEAR TO THE DEFENSE Wear, meanwhile, told the ABA

Journal that the charges against Durant were nothing more than a po litical vendetta.

'Tve had an opportunity to re view some of the documentary evi dence," Wear said. "I have found no evidence of any impropriety on the part of Mr. Durant or any other mem bers of the board.

"I'm afraid some of the members on the committee are attempting to use this as a way to distract the cor

poration from getting on with its re forms."

Prior to accepting the LSC posi tion, Wear was a partner at the Wash ington, D.C., office of O'Connor & Hannan of Minneapolis, which he joined in 1987. Previously, he worked under Sen. Jesse Helms, R-N.C, as

counsel to the Senate Agriculture Committee.

Wear says his top priority as LSC head is to institute much-needed re forms to combat fraud and to make sure the grant process gets money to those who really need it, such as sen ior citizens being evicted or abused spouses. "The issue is not whether the poor need legal services, but what kind and how best to deliver those services," he says.

Wear says he agrees with Durant that changes must be made at LSC, but added he is not convinced that the corporation should be eliminated altogether.

The LSC has been at the center of controversy since 1981 when Pres ident Reagan proposed eliminating funding for the private non-profit corporation created by Congress in 1974 to deliver free legal services to the poor in civil matters. Durant backed Reagan's proposal, and in 1987 called for the abolishment of the LSC.

Then ABA President Eugene Thomas responded to Durant's pro posal by calling for his removal, say ing the LSC could not fulfill its

mission of helping the poor when its leaders did not support the organi zation.

President Reagan for the first time this year requested funding for the corporation in the amount of $250

million. ?Andrea Neal

ABAJ/LISA BERG

John Bayly Jr.

ABA JOURNAL / SEPTEMBER 1, 1988 17

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