In this troubled economy, more people need free legal help. That's one reason why Congress is on track to give Legal Services Corporation a $50 million increase in its $390-million federal budget. The non-profit grants most of that money to 137 legal aid programs around the country, reports CBS News investigative correspondent Sharyl Attkisson.
But Senator Charles Grassley says too much of the money isn't going to help the poor.
"There's just a lot of money being wasted," Grassley said.
Grassley points to multiple GAO and Inspector General reports that have uncovered examples like these:
"There should be not one dollar wasted upon some fancy stone project if it could be responding to the legal needs of low-income people," Grassley said.
And while many Americans may have trouble getting loans a legal aid office, Philadelphia Legal Assistance Center, got caught using your tax dollars to give interest-free loans to its employees. They weren't even required to sign contracts, and the GAO says controls on those loans was "nonexistent."
A new Inspector General audit also finds Legal Services often bypassed competitive bidding, and failed to follow its own policies in 37 out of 38 consultant contracts reviewed.
And when the non-profit hosted a catered affair at the Capitol that cost nearly $5,000, the IG found it was paid for with tax money despite the invitation which claimed "no federal funds" were used.
The event was invitation-only and included purchase of alcohol, food, drinks, awards and photography.
The Inspector General also determined Legal Services violated its own by-laws by renewing the contract of Legal Services President Helaine Barnett behind closed doors without the appropriate public notice. Barnett was not available for an interview, but her organization gave us a letter saying it "reimbursed" taxpayers for the party on Capitol Hill. And those no-interest loans to employees? They were considered "salary advances."
Legal Services also says it has strengthened oversight and is fixing each problem raised. The group told Senator Grassley in a letter: "We have followed-up responsibly and implemented all recommendations made by GAO. With respect to the contracting recommendations made by the (Inspector General), we expect to implement them all by October 1, 2009." Meantime, the Senate is expected to approve the non-profit's 11 percent budget increase as early as this week.