(Printed in Legal Times, Washington, D.C.,  Jan. 5, 1998)
    Property Rights Defenders See No Harm in Robbing the Poor
                          by FRANK ASKIN

     Folk singer Pete Seeger used to sing a pro-labor song which described a scab as one so
low he'd "steal money from a blind man's cup."  Today, that song might be revised to aim its barb
at  the Washington Legal Foundation, one of those conservative self-defined public interest law
firms which believe that the major purpose of the federal constitution is the protection of private
property.  However, it seems to have no problem whatsoever with  robbing the poor.
     The recent target of the WLF's lawyers has been Legal Services, the nationwide program
which provides lawyers for poor people in civil matters.  Not satisfied with the success of the
Republican Congress in drastically slashing Legal Services appropriations, the WLF has been
waging a relentless campaign to eliminate the private funding which has been slowly replacing
dried up federal grants thanks to the efforts of  local courts and bar associations.
     The program under attack goes by the acronym of IOLTA, which stands for Interest on
Lawyers' Trust Accounts.
     In all states, lawyers are required to place in trust  accounts client funds which are being
temporarily held in escrow.  The deposits are of such small amounts and held for such short
duration that if placed in interest-bearing accounts, the costs of administration would consume
any possible interest earned.  As a consequence, the banks holding these funds had their free use,
which amounted to substantial windfalls for them.
     Some years ago, someone  in the Florida bar came up with the idea that if the banks were
forced to aggregate all such accounts and record the gross interest earned, it would create a
substantial pot of money which could be used for the public good, rather than the private
enrichment of the bankers.  The principal still belonged to the lawyers' clients, but the interest was
transferred from the banks to the IOLTA fund.
     The idea caught on quickly and swept the legal world.  In almost every state, the bulk of
the proceeds were directed by the highest court to be used for provision of legal services for the
poor.  The financial hemorrhaging of Legal Services programs was brought under control.    In
Texas alone, the IOLTA Legal Services grant amounts to about ten million dollars a year.
     Enter the Washington Legal Foundation.  For reasons that might understandably mystify
some of us, these conservative lawyers don't like providing free legal services for  poor people. 
They encouraged lawyers and their clients in several states to attack the IOLTA programs on two
counts -- first, as a taking of the clients' property and, second, as a violation of the free speech
rights of both lawyers and clients.  Both arguments are flawed.
     The takings claim is revealed as a sham by the fact that the objectors give up nothing and 
have absolutely nothing of value to gain with a legal victory. As most courts which have dealt
with the issue have recognized, there is no way the plaintiffs would ever receive the interest they
claim is being unconstitutionally taken from them.  One federal judge recently pointed out:  "The
plaintiffs in this case are not harmed in any way by the existence of IOLTA and would not be
benefited in any tangible way by its elimination."  The interest proceeds would presumably revert
to the banks.
     The free speech argument is based on the notion that the objectors are being compelled to
support ideological programs with which they disagree.  But it is hard to define anything
"ideological" about providing legal services to poor people. Furthermore, there is certainly
nothing improper about using public monies to fund litigation activities for those unable to afford
counsel.  Indeed, in criminal cases -- and in a few civil matters -- it is constitutionally compelled.
     The first couple of legal salvos did no damage.  Two U.S. Courts of Appeals and several
state courts rejected the claims.  Since the plaintiffs had nothing to gain by destroying the IOLTA
programs --  other than venting their spleens -- they had nothing to complain about. 
     Finally, the challengers found a sympathetic court.  The United States Court of Appeals
for the Fifth Circuit, sitting in New Orleans, decided that the Texas IOLTA program did
constitute a taking of property, invoking the legal rule that interest follows principal and therefore
must belong to the beneficial owner of the account.   Never mind that absent the IOLTA program
there was nothing to take; and by killing the goose there would be no more eggs.  As a dissenting
judge noted: "I find it both ironic and fatal to plaintiffs' claim that in order to have a property
interest in this case, they must rely on the existence of the program they seek to eliminate."    
     The United States Supreme Court has agreed to review the ruling and will consider the
issue this term.  If the Texas ruling is upheld, Legal Services programs all over the country face
doom.  Obviously, the Washington Legal Foundation and its clients believe that depriving poor
people of lawyers is its own reward!  Pete Seeger, this one's for you!
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