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Why Federal Judges - Including Supreme Court Justices - Are Required to File Financial Disclosures

In 1978, President Carter signed the Ethics in Government Act. The bill required top government officials – federal judges and Supreme Court justices, plus the President and Vice President, among others – to file an annual financial disclosure report listing outside income (teaching gigs, book royalties, etc.), spouse’s income, investments, board positions, gifts and debts in a way that would not reveal private information about the filer, like his or her address or minor children.

In 1979, six judges from the Eastern District of Louisiana filed a class action lawsuit (Duplantier v. U.S.) over separation of powers and privacy concerns with the EGA’s disclosure requirement.

The question then arose as to who would hear the case since, due to recusal rules, every federal judge in the country could have plausibly been disqualified. The Fifth Circuit eventually took it under the “rule of necessity.”

A three-judge panel decided the case on November 19, 1979; rehearing and rehearing en banc were subsequently turned down (denied 12/12/79), as was cert. at SCOTUS (denied 1/12/81), meaning that whatever the Fifth Circuit said was the law of the land.

The court upheld the financial disclosure requirement of the EGA. Here are key quotes from the opinion:

P. 13: “The intrusion upon the constitutionally assigned functions of the judiciary made by the Act is justified by the promotion of important objectives within the constitutional authority of Congress. The Act, therefore, does not violate the doctrine of separation of powers.”

Pp. 17-18: “There is a growing public demand for accountability and integrity of public officials [including judges], and the [Ethics in Government] Act is designed to carry out that purpose. […] If the Act’s provisions serve the purpose of maintaining the public’s confidence in the federal judiciary, they will have served us well.”

Taking a step back, why was Congress so intent on imposing financial disclosure requirements on the third branch? You can see from one of its reports on the subject (there were three overall). According to Senate Report 95-170, there were five reasons (pp.25-26), in fact:

(1) Public financial disclosure will increase public confidence in the government. Numerous national polls of voter confidence in officials of the Federal government and the low turnout of voters in recent elections, were cited for the proposition that public confidence in all three branches of the Federal government has been seriously eroded by the exposure, principally in the course of the Watergate investigation, of corruption on the part of a few high-level government officials.

Public financial disclosure was seen as an important step to take to help restore public confidence in the integrity of top government officials, and, therefore, in the government as a whole.

(2) Public financial disclosure will demonstrate the high level of integrity of the vast majority of government officials. Only a very small fraction of a percent of all government officials have ever been charged with professional impropriety.

(3) Public financial disclosure will deter conflicts of interest from arising. Disclosure will not tell an official what to do about outside interests; it will ensure that what he does will be subject to public scrutiny.

(4) Public financial disclosure will deter some persons who should not be entering public service from doing so. Individuals whose personal finances would not bear up to public scrutiny, whether due to questionable sources of income or a lack of morality in business practices, will very likely be discouraged from entering public office altogether, knowing in advance that their sources of income and financial holdings will be available for public review.

(5) Public financial disclosure will better enable the public to judge the performance of public officials. By having access to financial disclosure statements, an interested citizen can evaluate the official’s performance of his public duties in light of the official’s outside financial interests.

Congress understood then, and will hopefully realize again, that there are compelling reasons for this type of oversight – and that it trumps any separation-of-powers concerns certain members (and judges) may have had.

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