The Courthouse Ethics and Transparency Act: The Fight Against Judicial Conflict of Interest

About the Author: Nicole Clay is a 1L at American University Washington College of Law. She attended Ohio Wesleyan University for my Undergraduate degree and graduated in 2021 with a double major in Sociology and East Asian Studies. She wants to pursue a career in international law. 

 

The Courthouse Ethics and Transparency Act was recently passed in the Senate on February 17, 2022, and it passed in the House of Representatives on December 1, 2021.[1] It will bring stricter regulation on the disclosure of financial information for judges to ensure transparency and prevent conflicts of interest in cases. The bill was first introduced by Congresswomen Ross and Congressman Issa.[2] This bill would amend the Ethics in Government Act of 1978 by creating an online database to enable public access within 90 days to any report required to be disclosed under this Act, and by preventing information from being redacted in the documents disclosed.[3] In addition, Judges would be required to file periodic transaction reports disclosing certain securities transactions and to publish online financial disclosure reports.[4] The bill gives 45 days to report a purchase, sale, or exchange of securities that exceeds $1,000.[5]

The bill was created to prevent judges from having conflicts in cases due to their personal monetary interests. It is already law under 28 U.S. Code § 455 that Judges are required to recuse themselves from a case if they hold any equitable interest and that a Judge would have to file annual reports disclosing their financial interest.[6] The Courthouse Ethics and Transparency Act is being brought because the existing law is not sufficient to prevent conflicting interests and could potentially lead to people doubting the judicial system. In addition, the precedent set by a case in which the presiding judge has conflicting interests may be shrouded in doubt.

Investigations show that between 2010 and 2018, over 130 Federal judges have presided over nearly 700 cases where they are part-owners with the parties, and over 60 judges have traded shares with the parties while the cases were ongoing.[7] Judges who have any financial interest in a case, no matter how small, are required to recuse themselves and these judges did not, which may potentially affect the outcome of the case and bring into question whether the proceedings were fair.[8] The number of cases that seem to have slipped through the existing law has led to The Courthouse Ethics and Transparency Act being drafted in order to hold judges to the same standards of accountability as lawmakers are under the STOCK act.[9] The potential effect of Judges who are not held accountable was best said by Congressman Issa, who stated, “When you are looking at people who have a lifetime appointment, people who do not stand for election, and cases that may involve 10s or 100s of millions of dollars of company or individual money and the outcome, if later overturned due to the potential malpractice, such as the 60 judges who actually traded while cases were in front of them, the cost can be devastating in dollars.”[10] As a bipartisan effort, The Courthouse Ethics and Transparency Act has the potential to be passed into law as it has gained support from the Republican and Democratic parties.

 

 

[1] Courthouse Ethics and Transparency Act, S. 3059, 117th Cong. (2022). 

[2] Courthouse Ethics and Transparency Act, H.R 5720, 117th Cong. (2021).

[3] See Courthouse Ethics and Transparency Act, supra note 1. 

[4] Id.

[5] Id.

[6] 28 U.S.C.S. § 455 (LexisNexis, Lexis Advance through Public Law 117-80, approved December 27, 2021).

[7] See Courthouse Ethics and Transparency Act, supra note 2.

[8] See 28 U.S.C.S. § 455 (LexisNexis, Lexis Advance through Public Law 117-80, approved December 27, 2021).

[9] Chairman Nadler Celebrates House passage of the Courthouse Ethics and Transparency Act of 2021, U.S. House Judiciary Committee (Dec. 1, 2021), https://judiciary.house.gov/news/documentsingle.aspx?DocumentID=4805. 

[10] See Courthouse Ethics and Transparency Act, supra note 2.

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