Cornyn, Coons Bill to Apply STOCK Act Requirements to Federal Judges Signed Into Law

Chris Coons (D-DE) and I released the following statements after our Courthouse Ethics and Transparency Act, which would require online publication of financial disclosure reports for federal judges and mandate they submit periodic transaction reports for certain securities transactions, was signed into law:

Excluding federal judges from the same disclosure requirements as other federal officials under the STOCK Act was a mistake, and I’m glad we could right this wrong. hank you to my colleagues in Congress and the Biden Administration for acting quickly to make this the law of the land so we can prevent conflicts of interest and reassure litigants that they will receive a fair trial.

“Every American who has their day in court deserves to know they’ll be treated fairly by their judge, and now that the Courthouse Ethics and Transparency Act is law, they can be more confident than ever that they’re getting equal and unbiased treatment. By signing this bipartisan measure into law, President Biden has brought badly needed transparency to federal judges’ finances by signing this bipartisan measure into law,” said Sen. Coons.

The legislation is cosponsored by Senate Judiciary Committee Chairman Dick Durbin (D-IL) and Ranking Member Chuck Grassley (R-IA) and Senators John Kennedy (R-LA), Sheldon Whitehouse (D-RI), Ted Cruz (R-TX), and Jon Ossoff (D-GA).

Background:

The Courthouse Ethics and Transparency Act will require that federal judges’ financial disclosure reports be made publicly available online and require federal judges to submit periodic transaction reports of securities transactions in line with other federal officials under the STOCK Act. The bill will amend the Ethics in Government Act of 1978 to:

• Require the Administrative Office of the U.S. Courts to create a searchable online database of judicial financial disclosure forms and post those forms within 90 days of being filed, and
• Subject federal judges to the STOCK Act’s requirement of filing periodic transaction reports within 45 days of securities transactions over $1,000.

Importantly, the bill also preserves the existing ability of judges to request redactions of personal information on financial disclosure reports due to a security concern.

Under ethics guidelines and federal law prior to the Courthouse Ethics and Transparency Act, federal judges were prohibited from hearing cases that involve a party in which they, their spouse, or their minor children have a financial interest. Federal judges were instead supposed to disqualify themselves in any proceeding in which their impartiality may be questioned. Despite this, a recent report from the Wall Street Journal found that between 2010 and 2018, more than 130 federal judges failed to recuse themselves in nearly 700 cases in which they or an immediate family member held stock in a company involved in the case.

While federal judges were required to submit financial disclosure reports, the law did not provide sufficient transparency or certainty for litigants to discern if the judge has a conflict of interest. The process for obtaining judicial financial disclosure forms was often cumbersome and took months or even years. By contrast, financial disclosure reports for the President, Members of Congress, and Presidential-appointed and Senate-confirmed officials are readily available online.

Litigants need real-time access to judges’ financial disclosures and securities transactions in order to preserve the integrity of the proceedings and ensure a recusal when there’s a potential conflict of interest in their case. The Courthouse Ethics and Transparency Act will enact necessary updates to disclosure rules and provide litigants and the public with greater confidence in the judicial system.