Is Your Local Judge Hiding Something?

A Center for Public Integrity investigation argues for better rules on judicial conflicts of interest.
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Statue of Lady Justice in Frankfurt, Germany. (PHOTO: PATRICK POENDL/SHUTTERSTOCK)

Statue of Lady Justice in Frankfurt, Germany. (PHOTO: PATRICK POENDL/SHUTTERSTOCK)

The Center for Public Integrity just released what it's calling an investigation of conflict of interest rules for judges in the 50 states and the District of Columbia. On an A-F scale, the outfit graded state rules that keep judges from presiding over cases where a personal interest might intrude. Forty-two states and D.C. scored an F, meaning CPI thinks the disclosure rules were too lax, or didn't exist in the first place. No state's legal system got an A or a B, according to CPI's standard. California pulled a gentleman's C.

If those depressing-sounding rankings are fair, what do they mean? The gist is that there isn't enough legislation out there to prevent judicial corruption. So some corruption occurred:

After reviewing three years of personal financial disclosures, the Center found judges who authored opinions favoring companies in which they owned stock. The Center found judges who ruled on cases even when family members were receiving income from one of the parties. And it found judges who accepted lavish gifts — like a $50,000 trip from a lawyer.

Sounds bad. The rest of the research, however, doesn't offer too many cases that sound particularly grave. In the most alarming incident highlighted, a California supreme court judge participated in a case involving Wells Fargo Bank, despite apparently owning stock in the bank that could have represented as much as a million dollars. Another judge on the same court had recused himself. That's pretty glaring.

It's pretty hard for any person with a retirement portfolio not to be invested in large companies, and perhaps not even know it. Where does that begin to affect a judge's judgment?

In other cases, however, the numbers are a lot smaller, and point less to incentives for corruption than to the difficulty of  separating a judge's personal finances from his or her responsibilities to the bench. A Missouri judge noted in the report ruled in the case of a natural gas company. The judge's wife also owned land on which the gas company held drilling rights, worth between $1,000 and $12,000 to the judge's wife.

“It certainly wasn’t going to affect my decision,” the judge argued to CPI, according to the report. “If I had Wal-Mart stock worth $100,000, I’d get off a Wal-Mart case. But I won’t get off a case for silly reasons.” Is $1,000 silly? Maybe.

The report found 273 state judges that are required to report stock holdings, of whom 107 reported holding stock of some sort. CPI's argument seems to be that judges with stock in companies before their courts should recuse themselves, and to insure they do, should be required to disclose their own financial holdings and perhaps those of close family members. Fair enough.

But what to do with that information? A million bucks in Wells Fargo Stock is one thing. But what about some vanilla IRA that also owns Wells Fargo? It's pretty hard for any person with a retirement portfolio not to be invested in large companies, and perhaps not even know it. Where does that begin to affect a judge's judgment?

The CPI argument appears to be that it's a case-by-case thing, and to make those kinds of calls, the rules for disclosure need to be clearer and tougher. When all those F grades rise, then states would have a framework to decide for themselves whether a given judge is too invested to rule on a case involving a particular company.

If that's true, then CPI isn't arguing that state judges are dirty. But it does suggest that under the current rules, we'd probably never know if they were.

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