Indiana IOLTA Funds Boosted By New Law

HARBESON: Public money for ‘free’ work

CLARK COUNTY — Republican State Sen. Ron Grooms is getting so good at writing laws to force his neighbors to hand over money to others that he’s now collecting awards from the groups who benefit.

Grooms received the President’s Award from the Indiana Bar Foundation for his help in authoring a bill which led to the new pro bono legal services fee that now must be paid by those filing civil cases in Indiana. The fee will go directly to this private foundation and is supposed to be used to help pay for legal services for the needy.

Helping people gain access to legal services can certainly be considered a good cause to support but is it any more important than the hundreds of other causes and needs that exist? Why should Grooms and his buddies single out one charitable fund over all the others who are also struggling in the current economy?

One reason may be that the bill’s other author, Republican Sen. Brent Steele, just happens to be a lawyer and just happens to think the work of this particular charity is important. Steele wanted to do something to help the struggling pro bono fund and said, “This is the only thing I could think of.”

I guess we shouldn’t be surprised that the only idea a politician might have is to create a new law to force people to fund his pet cause in the amount of $450,000 per year instead of going out and seeking voluntary donations.

Perhaps the reason his brain blanked out has something to do with the history of funding Indiana’s pro bono districts. The districts are primarily funded by the Interest on Lawyer’s Trust Account program (IOLTA), which comes from pooling trust accounts held by lawyers on behalf of clients which are either too small or too short term to be set up to earn interest for the client.

The interest earned from the pooled accounts is paid to the Indiana Bar Foundation and is supposed to be used “primarily” to support pro bono civil legal services. This idea of pooling trust accounts and giving the interest to groups who provide legal aid was controversial nationally from the start because these trust funds are private property of the clients.

When objections were raised about the setup, the U.S. Supreme Court agreed that these programs do amount to the taking of private property, but hey, it’s OK because the interest is used in a manner that they considered to be the “common good.”

Yet many other charities and foundations do work that is in the “common good.” There is only one reason I can see that explains how this particular charity is deemed more worthy than others — it involves the lawyers and the courts. In other words, lawyers and courts told other lawyers and courts that what they were doing was OK because there are direct benefits to lawyers and courts.

The court also said no compensation was due to those whose property is taken since the accounts, held individually, would not earn interest anyway. (Of course if compensation was due, then that would defeat the entire purpose of what the lawyers and government courts wanted to achieve by taking other people’s property.)

This scheme of skimming interest off the pooled private property accounts of other people worked well for awhile — until the economy tanked and decreased earnings of the IOLTA fund, which is what led to the new legislation instituting the pro-bono filing fee.

This is not just about instituting yet another government fee either. Like all government actions do, this legislation also costs taxpayers in general. The state has already incurred the costs of pushing this bill through the legislative process and now there will be the continual costs of collecting and processing the fee.

In addition, the funds spent are supposed to be audited by the State Board of Accounts. Yes, that’s the same entity that has been so busy here in Southern Indiana finding mistake after mistake in almost every single local government’s spending.

Now the award-winning Grooms just gave the SBA more spending to audit, all because he decided this specific cause demanded the use of government force. Thank Ron for increasing government bureaucracy and costs the next time you see him.

By the way, all of the local legislators in Floyd and Clark counties voted in support of this new fee. State Rep. Steve Stemler even sponsored the bill for the House. I don’t know if he received an award though. If not, he should probably ask Grooms for advice.

One of the worst aspects about this type of legislation is that the politicians and people who run the private entities present themselves as the charitable ones. They send out press releases and grab all the glory as if they did something really virtuous. But all they did was collaborate to use the force of government to get what they want, rather than respectfully asking people to voluntarily donate to their cause.

If people were asked to pitch in a dollar to the fund, many would do so. If the property owners of the trust accounts were asked to consent to the pooling of their money to help pro bono districts, many of them would have given consent as well. No one asked though.

Politicians just went straight to the force and now here we are, with yet another new law and all the associated new burdens that are always attached.

— Clark County resident Debbie Harbeson would be happy to preside over any award ceremony for a politician, provided the token is a pin of some sort.