Charitable Choice Conference

Remarks of Carl Esbeck

MR. KAVANAUGH: I am Bret Kavanaugh. I will be the moderator for the second panel this morning. I am a partner at Kirkland and Ellis in Washington, and along with Nicole Garnett, Head of the School Choice Subcommittee of the Religious Liberties Practice Group.

The first panel was about policy, to some extent, and what's going on on the ground, but in this day and age, of course, no question of policy, of course, and particularly questions of policy that implicate religion, can be discussed or analyzed without the overlay of the United States Constitution, or to be more precise, the overlay of the views of the individual Justices of the Supreme Court, or to be even more precise, the overlay of the views of Justice O'Conner, who basically controls the votes on the Supreme Court in Establishment Clause cases.

How does Charitable Choice fit within the confines of the Establishment Clause? How should it? What values does the Establishment Clause serve, and what values does Charitable Choice serve?

How do the two mesh together? Is the value of a quality predominant that religious organizations should be given at least an equal place in our society, or is the value of separation predominant; that government should perform its functions; that religious organizations should perform their functions, and never the twain shall meet?

In reality, of course, the current doctrine is really an amalgam of those principles, and, indeed, we saw that just this last term in the Supreme Court where in the Santa Fe case, the Court ruled that a student speaker before a football game could speak a message that solemnized the event, so long as the speaker did not utter any religious words, the religious message disfavored.

On the other hand, in Mitchell v. Helms, the Court upheld a government program that provided educational aid to schools, including parochial schools, on a neutral basis. In that case, the aid was computers, primarily, that the government was providing to schools.

In that case, the principle of equality was triumphant, the principle of neutrality. Charitable Choice poses a number of difficult Constitutional issues at the crossroads of the two competing principles that I have mentioned.

Can the government give money to a faithbased organization if the money supports the religious message of that organization? Can the government distinguish among religious organizations, working through some religiouslyaffiliated providers but not others that are, quote, "pervasively sectarian," unquote?

Are there Constitutional limits on the intrusiveness of such programs, on what they do to the religious organizations? That is something the first panel spoke about.

And to speak to these and numerous other Constitutional issues that Charitable Choice raises, as well as the policy issues that really at times can't be separated, we have assembled an excellent panel. Let me introduce them in the order they will be speaking:

Carl Esbeck is Director of the Center for Law and Religious Freedom, the Advocacy Division of the Christian Legal Society. He is presently on leave from the University of Missouri School of Law where he is a professor.

He has taught courses in Constitutional Law, Federal Civil Rights and Religious Liberty. He has published widely on First Amendment religious issues and drafted legislation enacted by Congress and in various state legislatures.

Of most relevance here, Professor Esbeck was the progenitor of Charitable Choice, the provision in the 1996 Federal Welfare Reform Act designed to enable faithbased social service charities to cooperate with state and local agencies in assisting the poor and needy.

He has written widely, as I said, including an excellent piece entitled A Constitutional Case for Government Cooperation with FaithBased Social Service Providers.

Elliott Mincberg is General Counsel and Legal and Education Policy Director of People for the American Way Foundation, which is a 300,000member national organization that promotes public education in Constitutional and civil rights.

He has served as cocounsel on a number of important First Amendment and education cases, including litigation challenging school voucher programs in Milwaukee, Cleveland, Pennsylvania, and Florida.

He, too, has written and spoken extensively on education and First Amendment issues, and we welcome him here today.

Steffen Johnson is an attorney at Mayer, Brown and Platt in Chicago, where he is a member of the firm's Supreme Court and Appellate Practice Group. He specializes in Constitutional and commercial litigation.

This Fall, he will be serving as a lecturer in law at the University of Chicago Law School, and teaching a course on Religion and the First Amendment.

Steffen recently served as Supreme Court cocounsel for the Petitioners, the successful party, in Mitchell v. Helms, the computers case that I mentioned.

Last year he served as cocounsel for Wisconsin State Representative Polly Williams and a group of school children in the Supreme Court phase of a suit challenging Milwaukee's school voucher program.

Jim Dwyer is an Assistant Professor at the William and Mary School of Law where he teaches Family Law and Juvenile Law. He received a law degree from Yale in 1987, and he's an author of a book entitled Religious Schools versus Children's Rights.

He has also published several articles on the rights of parents and children in connection with children's education and other aspects of children's upbringing.

He recently completed a manuscript for a book entitled Vouchers Without Strings: A ChildCentered Assessment of Aid to Religious Schools.

And, finally, Scott Somerville is Executive Director for the Center for the Original Intent of the Constitution, which is a joint project of the Home School Legal Defense Association and Patrick Henry College.

As chief draftsman for the Center for the Original Intent of the Constitution, Scott writes amicus briefs for the United States Supreme Court.

He has worked at HSLDA since 1992, and has represented HSLDA and member families in nineteen states and the District of Columbia; he, too, has written and spoken extensively about parental rights.

With no further ado, Professor Esbeck.

PROFESSOR ESBECK: Good morning. Thank you for coming, and your willingness to discuss Charitable Choice.

I suppose it falls to a professor to start off with some definitions of terms. Sitting through that first panel, it became apparent that the words, Charitable Choice, are being used in two different ways, and I think that that's fine. But it's going to be important that you understand the different ways in which we are using the term. The narrow sense of Charitable Choice, and the meaning that I have, is that there are three different federal revenue streams that pick up the various provisions and protections of Charitable Choice. Those three federal revenue streams are: TANF, Temporary Assistance for Needy Families that comes out of the '96 Welfare Reform Bill; WelfaretoWork monies; and finally Community Services Block Grant funds.

Charitable Choice also is being used in the broader sense of a reapprochement between faithbased organizations that deliver social services and state and local governments. There has been a thawing, if you will, of the chilly relationship between those two institutions.

I want to start off by saying that in drafting Charitable Choice, there were basically three principles that we had in mind, and to some extent I'm echoing the remarks of Stanley CarlsonThies, but I think that the principles are extremely important and they bear repeating. I am going to go beyond the remarks of Stanley CarlsonThies and relate these three principles that are in Charitable Choice to specific statutory language.

So let me just identify the three principles and then I'll come back and elaborate upon each. The first is the nondiscrimination provision. Basically, the idea is equal treatment of all private sector providers of social services as to eligibility requirements for federal programs, without regard to religion. I am sure you understand that, at least as to welfare, the federal government provides the money, but there is devolution of program design to the state and local governments.

The second principle is institutional autonomy. In fact, the title of this particular panel alludes to this being very much an endangered concept. The principle is about protecting, in its essential religious character, faithbased organizations should they choose to cooperate with government in delivering services to the poor and needy.

The third principle is the free exercise rights of the ultimate beneficiaries - who, I think, were called "clients" in our earlier panel. The beneficiaries are, of course, the people who qualify for the services because of their economic status or because of some other need.

As an aside before I jump into each of these three principles with somewhat more elaboration, you should understand that Charitable Choice at least allows for both direct and indirect funding of social service providers, including FBOs. That is to say, if a state or local government wants to, it can issue vouchers, or, if the Vword is unacceptable it certainly would be in some communities call them certificates, call them scholarships, call them what you want, but it would be indirect funding. There are also the direct forms of funding, grants and purchaseofservice contracts.

Now let me pick up this first principle of nondiscrimination: Two things were considered paramount, at least from an Establishment Clause standpoint. The first is that the government's program has to have a secular purpose. Second, that the independent sector providers of services are to be selected on one criteria only, and that criteria is which organizations can provide services effectively and efficiently. That is to say that Charitable Choice looks to how government funds are actually spent. It is particularly concerned about who you are as a provider, but what you can do.

This does not mean that a provider will get funded because it's religious just the opposite. It means that an FBO is eligible for funding notwithstanding being religious. In other words, another way of saying this is that there is no religious quota.

Charitable Choice in this regard is a complete repudiation of that juridical category called "pervasively sectarian," which was simply a surrogate for saying that certain religious groups necessarily would spend funds that they received through government programs in an inappropriate way, rather than doing the job that they're being contracted to do, i.e. provide the services.

The secular purpose here is aid to the poor and needy. Welfare, whether it be TANF funds or WelfaretoWork funds, is not aid to the FBO; rather, FBOs, are, indeed, given resources by the government. FBOs add value, I would say, not in all instances, but in many instances, they add considerable value, and then pass it on to the people who are the ultimate objective of the government program, the poor and the needy.

The second principle is institutional integrity, or protecting religious character, should the organization that receives a grant or a contract happens to be an FBO. Here, I want to reference some of the statutory protections, because, again, it is easy to claim that you are going to "sell your soul" if you take the money. Indeed, there is a prior track record that is none to happy in that regard. Anticipating that problem, Charitable Choice put in place some statutory safeguards.

Let me start with subsection (b). This is a quote from the legislation: "The purpose of this section (and then it lists a couple of purposes --but one of which is the purpose of this section) is to allow aid without impairing the religious character of such organizations." Subsection (d)(1) reads, "a religious organization participating in a program shall retain its independence from federal, state, and local governments, including such organization's control over the definition, development, practice, and expression of its religious beliefs."

That is a very broad, very comprehensive bulwark of protection in the statute itself. Subsection (d)(2)(A), protects against the government forcing FBOs to alter their polity, which they may hold out of their religious doctrine.

Subsection (d)(2)(B) provides that FBOs need not strip their buildings or their walls of religious art, scripture, or icons or symbols; in other words, they need not somehow desacralize their facilities or physical space.

Subsection (f) says that they can continue to hire on a religious basis. This is absolutely essential. A faithbased organization that has a particular way of understanding itself, can hardly maintain that understanding over a very long period of time if at least the key job positions are not held by people in common cause with the particular world view of the organization. Thus, they may continue to hire on a religious basis.

Finally, Subsection (i), specifies that if the Government is not in compliance, there is a private right to sue the government. Generally, you do not have to actually sue, but rather the right is prophylactic. When the government understands that it can be sued, it will be brought to the negotiation table and hopefully back into compliance with the legislation.

The third principle is protection of the free exercise rights of the ultimate beneficiaries. Of course, we are sensitive to the fact that the beneficiaries may or may not have their own religion. They may even be antireligious so we wanted to take that into account.

Hence, subsection (g) says that beneficiaries cannot be discriminated against on a religious basis in the provision of services. Second, they can choose to avoid a faithbased organization if they object on a religious basis.

The latter principle really has a double aspect. Normally what is thought of is, you have a nonreligious beneficiary who wants to avoid having, as was said in the first panel, religion rammed down his throat. But there is a second free exercise aspect to this as well. These beneficiaries may affirmatively desire to receive services from a faithbased organization. If an FBO is available because it's been successful in receiving a grant or contract, then the beneficiary can affirmatively meet that need. Again, if these particular rights of the beneficiaries are being violated, there is a private right to sue, which again has a very useful prophylactic effect.

The final point I want to touch on is compliance mechanisms. Understandably and, I think, rightly - there is a lot of concern. Once FBOs have contracts, grants or are eligible to receive vouchers, through indirect funding or otherwise, how do we make sure that the FBOs remain in compliance. Because, of course, they do have responsibilities.

The compliance mechanisms are multiple, and let me just name or list some of them: First, quite apart from this legislation, if nonprofits receive federal financial assistance, they are required to do an audit, and the audit is to be by a certified public accounting firm.

That requirement vests if a nonprofit receives more than $25,000 in total federal funds per annum. This would apply to an FBO recipient of Charitable Choice funding.

Second, subsection (h) of the law states that the government has the authority to do an audit. FBOs have to be ready to submit to that and cooperate fully with the audit.

Third, the government can require the particular organizations to create separate 501(c)(3) non-profit organizations. This requirement is not stated explicitly in the law, but derives from the legislative history.

There was a provision in the bill that said the government could not do that, but that was removed during the legislative process. So, I think the appropriate implication is that state and local government can require, in order to be eligible, all organizations, whether they are faithbased or not, to have separate 501(c)(3) organizations. This would have a laudable effect on FBOs and others because it would require keeping separate accounts because there is a separate corporation.

Fourth, beneficiaries can bring a private cause of action, and that is going to have a policing effect on both FBOs and the government. If a beneficiary thinks that he or she is discriminated against on a religious basis by an FBO, there will be the potential of an enforcement action.

The last one I'll mention is in subsection (j) of the legislation. FBOs cannot use federal funds which are traced to expenditures which are inherently religious. The legislation says something like "no funds for worship or proselytizing and religious instruction or sectarian instruction." This subsection (j) applies if the funding is direct. What would be very normative for state and local governments to do, and I think entirely in compliance with Charitable Choice, is that if they are issuing grants or contracts, they would put into these documents a requirement of an assurance of compliance, going to this particular requirement.

Also it would not be unusual, at least if it is a very large grant or contract, to require some type of selfmonitoring and selfreporting, as a way to make assure that the organization is in compliance. FBOs may be sued for refunds if, in fact, they are found not in compliance with their contracts.

The foregoing are all common ways in which procurement of services is done by state and local governments.

I would add, although it's not in this list of five, in America we are very fortunate that not only within our government do we have checks and balances, but also in the private sector. We have activist groups on all sides of issues. Separation of church and state and no aid to religion is well represented by activist groups on both sides of the issue. That has a useful teaching and prophylactic effect. For example, one of my copanelists here, Elliott Mincberg, his organization, People for the American Way, is very forthright and activist in forcing their particular view of noaid separationism, and that has certainly brought much more scrutiny to this entire area. I think that sort of thing has been healthy. Thank you.


2003 The Federalist Society