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Trends Journal has recently featured several reports about ethical breaches at the Federal Reserve; see, for example, “FED ETHICS? FU!” (21 Sep 2021); that article invoked the notion (as expressed by Shakespeare’s phrase that “Caesar’s wife should be above suspicion”) that persons in positions of power and influence should be particularly mindful to avoid even the appearance of impropriety.
And the article then suggested that perhaps some Federal Reserve officials had never studied Shakespeare, let alone their own institution’s “code of conduct.”
Those officials had engaged in personally trading the same kind of assets the Fed itself had been trading. Now comes word, as reported on 16 October by The Wall Street Journal, of the same kind of shenanigans committed by federal judges. And not just a few of them.
The WSJ‘s own investigation revealed a federal judicial system even more rife with ethical breaches than the federal banking system. It found 131 federal judges who, between 2010 and 2018, violated federal law and judicial ethics by hearing cases involving companies in which the judges or their family members owned stock.
TRENDPOST: The WSJ reported on this before, on 30 September, and Trends Journal wrote about it then; see “AMERICAN LEGAL SYSTEM: A CRIME SYNDICATE?” (5 Oct 2021).
Those laws and ethics rules require judges to recuse themselves if even a single share of stock in a company that appears in their court as a litigant (plaintiff or defendant) is owned by the judge, or the judge’s spouse or minor children.
But the WSJ‘s sleuths found 61 judges who had traded such stocks while the cases were in progress before them. And, when confronted, their excuses included unawareness of owning such stocks, claiming that their holdings were handled by brokers or financial advisors.
And some claimed they had merely “failed to update” their recusal lists; federal courts have software programs designed to spot such conflicts, but that software depends on information supplied by the judges.
When advised of such a conflict, one judge, who in 2015 had sold stock in International Paper Co. for a profit of between $15,000 and $50,000 while hearing and ruling on a case involving that company, his remarks struck notes similar to those of other judges in like situations: “In all candor, I am remiss in not checking this as thoroughly as I should.” He claimed that the stock was handled by a manager who “can buy or sell without getting my permission,” and that he was unaware of owning stock in International Paper because he hadn’t read his statements.
TRENDPOST: The WSJ article doesn’t mention that judge’s body language or demeanor, so there’s no indication that his statement was given in a cavalier manner and was accompanied by a shrug and a shit-eating grin.
A law professor and ethics specialist seemed to take such conflicts more seriously, saying that such trading “can happen only if the judge is recklessly indifferent to the conflict-of-interest rules in the statute and the Canons of Ethics.” And the Administrative Office of the U.S. courts sent judges a memo on 13 October reminding them they’re required to stay informed about their personal finances and keep updated lists of parties that are off limits.
The article cites numerous other examples; in 2010, one judge made 11 trades of Pfizer stock while a suit against the pharmaceutical behemoth was in progress in his courtroom.
Pfizer isn’t the only drug company named in these tales of judicial impropriety. Another example involves Judge Petrese Tucker, whose husband traded Eli Lilly and Co. stock while she presided over a suit alleging boorish treatment of some female Lilly employees.
Judge Tucker threw out all but one of the charges, saying the alleged bad behavior wasn’t severe or pervasive enough to support the claim of a hostile work environment.
A jury ruled in Lilly’s favor on the remaining charge; that and the judge’s dismissal of the other charges were appealed, but the rulings were upheld. The judge claimed to have had no knowledge of her husband’s dealings, nor that they had any influence on her decisions.
A 1974 law requires judges to disqualify themselves when they have such financial interests in parties before them, but a 1988 exception allows them to sell the stock and remain on the case. The Code of Conduct for U.S. judges, however, has no such exception.
TREND FORECAST: Since none of the 131 federal judges received so much as a slap on the wrist, let alone any official censure (or worse), don’t expect any great changes to this kind of behavior.
It all just highlights the gap between the patricians and the plebeians, between the elites and the hoi polloi. “We the people” have allowed ourselves to be ruled over by a privileged caste that loves to declare “no one is above the law” when it suits their purposes, and yet routinely hold themselves above not only the law but above ethics, accountability, even conscience.
That gap will continue, and will continue to breed resentment and anger against the elites, leading to events that will be unpleasant for everyone; see “OFF WITH THEIR HEADS 2.0” (10 Dec 2019).
As Gerald Celente frequently quotes the late comedian and social critic George Carlin, “It’s one big club, and you ain’t in it.” As to the legal system, the only trouble with the title of the Trends Journal article cited above—“AMERICAN LEGAL SYSTEM: A CRIME SYNDICATE?”—is that the question mark no longer belongs, since it’s really no longer a question but is a statement of fact.