(Natural News) An investigative report published by the Wall Street Journal (WSJ) has revealed that 131 federal judges violated U.S. laws and judicial ethics by overseeing court cases involving companies in which they or their family owned stocks.
Since 1974, federal law has required judges to be knowledgeable about their financial interests and the interests of their spouses or children. The judges cited in the report have not made the proper disclosures and often netted thousands of dollars as a result of ruling favorably for large corporations in which they own stocks.
The WSJ has reviewed financial disclosure forms filed annually for 2010 through 2018 by roughly 700 federal judges who reported holding individual stocks of large companies and then compared those holdings to tens of thousands of court dockets in civil cases.
They found that 129 federal district judges and two federal appellate judges had at least one case in which stock they or their family owned was a plaintiff or defendant.
Amount doesn’t matter
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The stockholdings of those judges have exceeded $15,000 in 173 cases and $50,000 in 21 of those cases – although the amounts don’t matter under the law.
The ethics code for federal judges “requires recusal when a judge has a financial conflict, regardless of the substance of the judge’s actual involvement in the case,” the Judicial Conference’s Committee on Codes of Conduct wrote in a letter to a judge earlier this month.
Overall, the WSJ has examined 685 lawsuits in which federal judges had a financial stake in the outcome yet failed to recuse themselves. The fallout could be hundreds of cases being overruled.
Perhaps by design, those judges offer some of the lamest excuses about their violations.
“I dropped the ball,” says Judge Lewis Babcock of the District Court of Colorado when asked about his recusal violation.
Babcock has simply blamed flawed internal procedures. He has owned thousands of dollars in Comcast stock and has overruled a lawsuit against the company. Comcast is the parent company of NBC News.
Judge Timothy Batten, Sr. of the District Court for the Northern District of Georgia says: “I had no idea that I had an interest in any of these companies in what was a most modest retirement account.” Batten claims that his account is managed by a broker. He previously owned stocks in JPMorgan Chase and ruled favorably for the bank in several court cases when his account was still active.
Actions speak louder than words
In some instances, the intent is rather obvious. The WSJ investigation has found 61 judges or their families not only holding stocks in companies that were plaintiffs or defendants in the judges’ courts but also trading the stocks during cases. (Related: Yet another corrupt judge BLOCKS Trump from trying to break Big Pharma’s drug price monopoly.)
At an Ohio-based appeals court, Judge Julia Smith Gibbons wrote an opinion that favored Ford Motor Co. in a trademark dispute while her husband held stocks in the automaker. After she and the others on the three-judge appellate panel heard arguments (but before they ruled), her husband’s financial adviser bought two chunks of Ford stock – each valued at up to $15,000, according to her disclosure form.
Some judges are frequent violators. A recusal violation in isolation could be viewed as an oversight, but the WSJ‘s investigation “raises a more systemic problem of judges chronically neglecting their duty to disqualify in such cases,” says Charles Geyh, a law professor at Indiana University, who specializes in judicial conduct, ethics and accountability.
Judge Janis Sammartino of California traded in stocks of Bank of America Corp., CVS Health Corp., Deutsche Bank AG, Hartford Financial Services Group Inc., HSBC Holdings PLC, JPMorgan, Pfizer Inc., Public Storage, Wells Fargo & Co. and Microsoft Corp. while hearing 18 lawsuits involving one or more of those companies, the WSJ has found. In all, she has heard 54 cases involving companies held in her family’s trusts.
Sammartino has referred questions from the WSJ to William Cracraft, a spokesman for the Ninth Circuit Court of Appeals. “She asked me to let you know that her stocks are in a managed account, so she’s not seeing as how there could be a conflict,” says Cracraft. “She’s not inclined to discuss her private business with you since it is all in managed accounts, and she thinks that’s sufficient.”
However, an opinion by the Judicial Conference’s Committee on Codes of Conduct in 2013 stated that judges must bow out of cases involving stocks they own in accounts run by money managers.
Sammartino has since informed the court clerk’s office of the conflicts, and the office has filed a letter notifying parties to the cases with violations identified by the WSJ.
“Judge Sammartino was not aware of this financial interest at the time the case was pending,” the letter says. “The matter was brought to her attention after disposition of the case. Thus, the financial interest neither affected nor impacted her decisions in this case. However, the financial interest would have required recusal.”
Judge Rodney Gilstrap, chief of the District Court for the Eastern District of Texas, has the largest number of conflicts based on the WSJ analysis. Gilstrap has 138 cases assigned to him involving companies in which he or his wife held an interest.
He has argued that there’s no need to recuse himself from some cases because they required little or no action on his part, and in other cases because the stocks were in a trust created for his wife. “I take my obligations related to potential conflicts/recusals seriously,” Gilstrap says in an email. “Throughout my judicial career, I have endeavored to comply with all such obligations, and I will continue to do so.”
Let me be the one
In at least 18 instances, judges disqualified themselves over conflicts, only to have the case reassigned to a judge who also had a conflict but did not recuse.
In 2015, Judge Robert Cleland in Michigan bowed out of a suit by an injured motorist against insurer Allstate Corp., whose stocks the judge had been buying and selling that year.
The case was reassigned to Judge Gershwin Drain, who also owned Allstate shares. Judge Drain heard the case and wrote a ruling denying a request by the motorist to move the dispute to state court. The case then settled on undisclosed terms.
Follow Corruption.news for more news and information related to corruption involving big corporations.
Article by Nolan Barton
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