President Biden Signs Judicial Ethics Law Bolstering Stock Disclosures.
Supreme Court justices, federal judges now required to promptly report their finances; legislation comes after WSJ investigation
WASHINGTON—President Biden signed into law on Friday a bill that requires federal judges and Supreme Court justices for the first time to promptly disclose stock purchases and sales and post their financial disclosure reports online in a publicly accessible, searchable database.
The law now will allow litigants and the public to determine more promptly whether judges have failed to recuse themselves from a case in which they own shares in a party to a lawsuit they’re presiding over. Until now, the public had to wait months or years for the judges and federal court system to release disclosure forms.
The president thanked the bill’s bipartisan sponsors in a brief statement.
Lawmakers said they drafted the bipartisan, bicameral Courthouse Ethics and Transparency Act in response to a Wall Street Journal investigation that found that 152 federal judges around the nation have violated U.S. law and judicial ethics by overseeing 1,076 court cases involving companies in which they or their family owned stock.
The new law comes as the federal judiciary and U.S. Supreme Court are under increased scrutiny, particularly after the leak of a first draft Supreme Court opinion that would overturn the 1973 ruling legalizing abortion.
Separately, the House Judiciary Committee this week also passed a bill along party lines to require the Supreme Court to write itself a code of conduct.
Sponsored by Sens. John Cornyn (R., Texas) and Chris Coons (D., Del.), the Courthouse Ethics and Transparency Act passed the Senate last month and the House in February. The law extends to the judiciary the same stock-trading reporting requirement that applies to members of Congress and administration officials under what is known as the STOCK, or Stop Trading on Congressional Knowledge, Act.
The law gives the Administrative Office of the U.S. Courts 180 days to create a searchable online database of judicial financial disclosure forms. Once the system is launched, judicial financial disclosures must be posted within 90 days of being filed.
While officially neutral on the bill, judges privately raised concerns about the proposals. Such resistance to ethics and transparency measures is common, said retired House Judiciary Chairman Jim Sensenbrenner
Members of the House have expressed concern about whether the Administrative Office is prepared to deliver the new system in time. Lobbyists for the judiciary persuaded Senate sponsors to modify the legislation to allow the courts to write a report if they can’t meet the deadline.
The House sponsor of a similar bill, Rep. Deborah Ross (D., N.C.), favored a stronger approach, but accepted the Senate changes. “The sooner we start the clock, the better,” Ms. Ross said. “I wanted to start the clock and hold their feet to the fire. They are already working on it.”
Judges acknowledged widespread cybersecurity and information-technology problems Thursday at a House Appropriations subcommittee hearing on the judiciary’s $8.6 billion budget request for 2023.
“We have underinvested in our IT because we have had other priorities,” said Judge Amy St. Eve, who chairs the Judicial Conference Committee on Budget. The national computer systems for federal court records “are outdated, unsustainable, and require replacement,” said Judge Roslynn Mauskopf, director of the Administrative Office, also known as the AO.
A recent AO report said the courts had rejected cheaper solutions urged by the technology division of the General Services Administration. “The AO now seems to prefer an approach to fixing the system that would take an estimated nine years and cost hundreds of millions of dollars to carry out,” said Gabe Roth, executive director of Fix the Court, a transparency group that has advocated for federal court records to be free online.
The new law requires judges to make periodic transaction reports, including stock trades over $1,000, within 45 days. The bill covers Supreme Court justices and federal judges appointed for life, as well as federal magistrate and bankruptcy judges, who serve assigned terms.
David Sellers, a spokesman for the Administrative Office, said the online database is under development and “will be completed as soon as possible.”
Currently, reports are filed annually in May for the previous year and aren’t available on a government website. They became available online last year after a nonprofit group, working with the Journal, obtained the forms through an onerous process.
Requesters must fill out a form asking for the disclosure, which is then sent to the judge, who can black out parts of the report. The new law allows for redactions but the judge must identify those parts when they submit their reports.
The process can take months or even years, depending on how many forms a requester seeks. For the majority of federal judges, 2019 is the most recent publicly available disclosure.
Lawsuits often end before litigants are able to find out whether a judge in their case had a conflict of interest. “Every American who has their day in court deserves to know they’ll be treated fairly,” Mr. Coons said. “President Biden has brought badly needed transparency to federal judges’ finances by signing this bipartisan measure into law.”
The judiciary long had told Congress this disclosure delay wasn’t a problem because a rigorous software system caught conflicts before cases were assigned, but several judges told The Wall Street Journal they erred in overly depending on unreliable software.