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A Big, Bipartisan Deal: Lawmakers Introduce Bill to Bring Judges Under STOCK Act’s Provisions

Dec. 1 update: the bill passed the House, 422-4! [LINK]

Proposal Would Require Periodic Transaction Reports, Online Disclosures in Third Branch

Fix the Court is praising today’s introduction of a bipartisan, bicameral bill that would require federal judges to abide by certain financial reporting rules that top officials in the other two branches have followed for nearly a decade.

Should the Courthouse Ethics and Transparency Act be enacted, district and circuit court judges would have to file a transaction report within 45 days of a stock sale or purchase greater than $1,000, which judicial administrators would post online.

Administrators would also have to upload judges’ annual financial disclosure reports within 90 days of submission and create a searchable online database of these reports.

The 2012 STOCK Act required members of Congress and high-level executive branch appointees and civil servants to follow these rules but left out the third branch.

“Life tenure isn’t an excuse for judges to ignore basic conflict-of-interest laws, but that’s exactly what’s been happening,” FTC’s Gabe Roth said. “This bill will help litigants and the general public identify conflicts and hold judges to account — and do it all contemporaneously, instead of years after the fact or never, as is the case today.”

“As I’ve been saying for seven years and reiterated last month, we’ll only get greater transparency around judicial disclosures and stock transactions when Congress passes a law to make it so. Thanks to Sens. Coons, Cornyn, Cruz, Durbin, Grassley, Kennedy, Ossoff and Whitehouse and Reps. Issa, Johnson, Nadler, Ross and Roy, a black robe will no longer justify keeping judges’ finances in a black box,” Roth added.

The bill comes as a response to the Wall Street Journal’s Sept. 28 investigation that uncovered 685 times 131 federal judges ruled on cases between 2010 and 2018 despite having a financial stake in one of the parties. Advocates believe that increased financial transparency would assist litigants, lawmakers and the general public — and the judges themselves — be more cognizant about potential conflicts of interest and significantly reduce the number of missed recusals going forward.

Legislative proposals on judicial financial reporting have been circulating on Capitol Hill for years, but the Journal’s investigation kicked these efforts into high gear. FTC worked with the Project on Government Oversight, Free Law Project and Hill allies this month in urging that an updated draft be turned around quickly in both houses.

Though the judiciary has insisted (graf 11) that it’s “considering ways to automate the release of these reports so they are available more quickly,” hard-to-uncover financial conflicts and years-long delays for disclosure releases are not new, and advocated believe the branch won’t sufficiently solve these problems without congressional intervention.

The bill does not include the Supreme Court for two main reasons. First, the justices’ disclosures are generally released within a month of their due date each year, and the public can glean from their weekly orders lists, which include recusal notes, which stocks the justices do or do not hold at a given time. Second, doing so might invite an unwelcome constitutional challenge. Over the years, justices have called their compliance with federal disclosure and gift statutes “voluntary” and that they do not “express any opinion concerning the validity” of the laws. Though such a statement seems contrary to Congress’ Article I powers, that fight, many advocates believe, is best left for another day.

Other ideas discussed in the wake of the Journal investigation — such as requiring judges to publicize their recusal lists, asking the GAO to audit the judiciary’s inadequate conflict-check software or directing the judiciary to hire a specific number of people to help carry out this work — didn’t make the cut, as one of the primary goals of the legislators was to ensure that the judiciary follows the same ethics requirements as top officials in the other branches. Despite this evenhandedness, advocates are concerned the bill might still face opposition from the Judicial Conference. (See fact sheet on why it shouldn’t here.)

FTC is also working toward ensuring that near-real-time financial reporting is a part of state judiciaries. Law clerk Mia Dohrmann has begun to catalogue public access to judicial disclosures in 10 key states — where the leaders in the House and Senate Judiciary Committees hail from — at this link. Briefly, Louisiana judges’ disclosure reports are all posted on a single webpage. California‘s, Georgia‘s, Illinois‘ and Rhode Island‘s are posted online, accessible via search. Delaware’s, Iowa’s, New York’s, Ohio’s and Texas’ require a written request to a state ethics body.

In the coming weeks FTC will request that these state courts systems, or their ethics agencies, reduce the number of hoops members of the public must jump through to access judges’ annual disclosures.

Tomorrow the House Judiciary’s Courts Subcommittee will hold a hearing on “the limits of existing statutes and rules” regarding judicial transparency, including on stocks and disclosures. Chairman Johnson, along with full Committee Chairman Nadler, have indicated they’d like to expand upon last year’s 21st Century Courts Act (H.R. 6017), which included the online disclosures language, among other pro-accountability provisions.

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