“Judicial Ethics and Transparency: The Limits of Existing Statutes and Rules

Subcommittee Chairman Henry C. "Hank" Johnson, Jr.

House Committee on the Judiciary
Subcommittee on Courts, Intellectual Property, and the Internet
Hearing on "Judicial Ethics and Transparency: The Limits of Existing Statutes and Rules"

October 26, 2021 at 2:00 p.m., 2141 Rayburn House Office Bldg.

Good afternoon and welcome. We are here today to explore and to consider disturbing facts that have been brought to light by recent reporting about the failure of federal judges to recuse themselves in cases where they or their family held a financial interest. We will also examine how the laws and rules currently on the books have fallen short and failed to prevent the circumstances exposed in that reporting.

Central to our discussion today will be the appearance of impropriety and the appearance of impartiality, which is an essential component of our constitutional system of justice. Justice John Marshall Harlan, the "Great Dissenter," said that, quote, "the appearance of evenhanded justice . . . is at the core of due process[,]" end quote. Appearances matter. It is in the appearance of impartiality that Americans find faith in their courts and trust in their democracy.

That is one reason why the recent reports from the Wall Street Journal exposing numerous instances where judges' decisions have appeared to be biased, or partial, or improperly influenced by their financial interests, are so disheartening. The damage has been done. Federal judges did not follow the law. We do not know whether any judge specifically acted to benefit his or her ownership interests, but the appearance of impropriety has already tainted their judgments. Notwithstanding any actual undue influence, the fact that the 130-plus judges profiled in the Journal appear as if they might have acted with their pecuniary interests in mind is enough to shake the public's confidence in the United States judiciary.

This is especially frustrating because the judges at the center of this exposé failed to meet the very modest demands placed on them by their lifetime tenure in the federal courts. The executive and legislative branches are subject to extensive and frequent financial reporting requirements as well as strict ethical rules on matters in which they have a financial interest. For judges, the bar is much lower: judges need only disclose limited information about their finances once a year and then recuse themselves from any cases in which they have a financial interest. The recusal is critical—and the recusal is where these judges broke the law.

The Supreme Court has described the statutory requirement for judicial recusal as, quote, "steps necessary to maintain public confidence in the impartiality of the judiciary[,]" end quote.

And yet, what the Wall Street Journal has shown us are judges deciding cases while being part owners of the parties in front of them; trading and profiting on trades of shares of those parties; and in at least one instance, making a ruling in favor of those parties, which was later overturned on appeal.

These failures to recuse were not isolated cases, nor were they limited to individual judges. The Journal reported on 131 federal judges participating in 685 cases in which they had a financial interest. Sixty-one judges actively traded stocks in the companies before them while their cases were pending. Fully one-fifth of the judges who had disclosed a financial interest decided a case in which that interest was implicated. One-fifth.

And these concerns are not limited to the lower courts: the Supreme Court is not bound by a code of ethics to help protect its members from the appearance of impropriety, which was the subject of legislation I introduced last Congress and which I plan on reintroducing soon.

Today we learn more about what Congress can do to make sure the members of our judiciary take the "steps necessary" to avoid violating the recusal statute and the troubling appearances of impropriety that result. I am proud to join my esteemed colleague, Ms. Ross, in introducing the Courthouse Ethics and Transparency Act, which would address head-on many of the lapses in regulation surfaced by the Journal's reporting. These reforms are critical to maintaining the public's confidence in the decisions and in the authority of our courts.

And that brings us to our distinguished panelists. Our first panel is comprised of experts and advocates in the fields of judicial ethics and transparency and constitutional law who will enlighten us on the legal and constitutional issues involved in restoring and maintaining the strength of the federal judiciary, particularly the public's perception of judges' legitimacy and impartiality.

We will then be joined by a member of the federal judiciary and a leader in the Judicial Conference, the body that is responsible for guiding and assisting judges in the satisfaction of their statutory responsibilities.

Thank you, and I look forward to your testimony.

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