Arkansas earns ‘F’ for judicial financial disclosure

Strengths:

Bolstered by strong accountability and accessibility, Arkansas came very close to earning a passing grade for its financial disclosure requirements for its highest court. Arkansas’ financial disclosures are posted online for public inspection by the secretary of state’s office. Judges must disclose the source and exact value of any gifts they, their spouse and dependent children receive. (Gifts received by judges and their spouses must be reported if their value exceeds $100; the reporting threshold for gifts received by dependent children is $250.) They must also provide a description of the gift.

Weaknesses:

When it comes to investments, judges report values in broad categories: between $1,000 and $12,500 and more than $12,500. Income is reported the same way. Judges, as well as other state officials, do not have to report investment transactions or income generated from each investment. Additionally, the state requires little disclosure of judges’ liabilities. Only the names and addresses of creditors who are owed more than $5,000 need be reported. No information about the type of debt or the amount owed is required.

Highlights:

In April 2012, Justice Paul Danielson wrote the court’s opinion in a case involving XTO Energy, a subsidiary of Exxon Mobil Corp. Plaintiffs Kenny, Shelia and Kendell Lee Staggs argued that XTO Energy and two other companies wrongly claimed oil and gas rights to property on which the Staggs family owned the rights. An Arkansas circuit court granted summary judgment, ruling in favor of XTO Energy based on a deed executed in 1934. The Supreme Court affirmed the lower court’s decision. The same year Danielson wrote the court’s opinion in favor of XTO Energy and the other companies, the justice reported his wife earned between $1,001 and $12,499 in income from the natural-gas company. He reported the same range of income from XTO Energy in 2011, as well.

In an interview, Danielson said his wife earned the XTO Energy income in the form of oil and gas royalties tied to land she inherited from her family. He said he was aware of the royalty payments when the Staggs case reached the Supreme Court, but he didn’t recuse himself because “it certainly wasn’t going to affect my decision.” To Danielson, his family’s XTO income is insignificant. “If I had Wal-Mart stock worth $100,000, I’d get off a Wal-Mart case,” he said.

“But I won’t get off a case for silly reasons. These are just calls we have to make as judges,” Danielson continued. “I have a bigger problem with judges being too quick to recuse.” Danielson said he was “elected to decide cases,” not sit them out. Especially cases involving oil and gas litigation. “One of my specialties is oil and gas [litigation],” he said. “If I had to get off of every oil and gas case, it wouldn’t be good for the court.” In fact, Danielson added, “it would do more harm than good.”

In 2012, Justice Courtney Goodson accepted a $50,000 trip to Italy from Arkansas attorney W.H. Taylor, according to Goodson’s financial disclosure. It wasn’t the first time she vacationed on the lawyer’s dime. The year before, according to her 2011 financial disclosure, Taylor paid for Goodson’s $12,000 “Caribbean Cruise.” The two trips raised eyebrows after they were revealed in Arkansas news reports earlier this year. Taylor’s clients include John Tyson, the chairman of Tyson Foods, Inc., a food-processing giant based in Arkansas. “As Justice Goodson has previously stated, she will continue to recuse in cases involving her personal lawyer, W.H. Taylor; and out of an abundance of caution, she will continue to recuse in cases involving Tyson,” court spokeswoman Stephanie Harris wrote in an email to the Center on behalf of the judge.