San Diego Union Tribune

May 9, 2004

Group is alleged to have violated policies
Audit puts federal funding in jeopardy


WASHINGTON - California Rural Legal Assistance, an advocacy group that helps migrant farmworkers, is in the middle of a political and fiscal firestorm that could jeopardize its federal funding.

Federal auditors, farmers and some in Congress are accusing the organization of having an improper relationship with a foundation that focuses on border issues and immigrant rights.

"We are concerned that there was any suggestion there was a material violation of law," said Jose R. Padilla, longtime head of the rural legal group. "Instead of praise, we get politics."

A recent federal audit asserted that the organization had improperly subsidized the California Rural Legal Assistance Foundation through rent subsidies, shared staff and common workplace.

The subsidies violated federal policies because the foundation is a separate entity from the legal-assistance organization, according to the auditors.

The organization receives about 70 percent of its annual $8.6 million budget from the federally funded Legal Services Corp. The audit could result in Legal Services deciding to drastically cut the funding, which could have an impact on the rural legal group's ability to continue its services, officials said.

The federal inspector's office for Legal Services, which receives more than $300 million from the government, performed the audit, which concluded that the rural legal organization had not "maintained objective integrity and independence" from the foundation. Legal Services Corp. is a private nonprofit corporation formed to provide legal services for the poor by Congress in 1974.

Since 1965, the San Francisco-based rural legal group has provided free legal services to California's agricultural workers. The organization has a staff of 128, including more than 40 attorneys. Its branch office in Oceanside has a staff that serves hundreds of farmworkers with claims ranging from unpaid wages to workers compensation.

Restrictions Congress passed in 1996 bar lobbying by programs that get money from the Legal Services Corp.

The California Rural Legal Foundation, a nonprofit group formed in 1982 and based in Sacramento, doesn't receive federal funds. It works on a variety of projects, including helping immigrants become citizens and lobbying for a guest-worker program.

Legal Services is expected to decide this month whether officials with the legal group also performed foundation work.

The audit of the organization also maintains that an official with the organization's Oceanside office worked for both the foundation and the rural legal group, blurring the lines between the two organizations.

Sources identified the official as Claudia Smith, an attorney who had headed the Oceanside office until January 2001.

The official in Oceanside was doing "prohibited activities, lobbying government officials on behalf of illegal aliens," the audit said, citing "publicly available information."

Staff members in the Oceanside office said they were not aware of Smith's relationship with the foundation, the audit said.

Smith has been a longtime advocate for immigrant rights and an outspoken opponent of Operation Gatekeeper, the federal Border Patrol crackdown initiated under the Clinton administration.

Smith said federal auditors misunderstood her role. "I haven't been with CRLA for years. At the foundation, I just do my work on a volunteer basis," she said. "The foundation doesn't have the legal-services restrictions; that's why I work with them."

The recent federal audit was sought by the Modesto-based Western United Dairymen, which contends that the rural legal group used federal funds to support an environmental campaign against San Joaquin Valley dairy farmers.

Michael Marsh, head of the Western United Dairymen - which represents 1,100 dairy farmers in California - said his group has sought a Justice Department investigation into the rural legal group's relationships.