Justice Obscured

Published — December 4, 2013

California earns ‘C’ for judicial financial disclosure

Introduction

The Center for Public Integrity evaluated the disclosure rules for judges in the highest state courts nationwide. The level of disclosure in the 50 states and the District of Columbia was poor, with 43 receiving failing grades, making it difficult for the public to identify potential conflicts of interest on the bench. Despite the lack of information in the public records, the Center’s investigation found nearly three dozen conflicts, questionable gifts and entanglements among top judges around the country. Here’s what the Center found in California:

E


Strengths:

California’s financial disclosure law ranks first out of the 50 states and the District of Columbia, according to the Center for Public Integrity’s grading criteria. The Golden State scored points in every category. It did especially well in the accountability and accessibility sections, partly because the state’s financial disclosures are posted online for public inspection by the state’s Fair Political Practices Commission. The vast majority of states do not require judges to report investment transactions, but California earned full credit in that subcategory because judges must report the date when they acquired or disposed of an investment within the reporting period. California requires judges and other officials to report gifts they receive worth at least $50. However, the state bans officials from accepting gifts from a single source totaling more than $440.

Weaknesses:

The state has extensive reporting requirements for gifts and reimbursements, but they only apply to judges’ spouses and children in certain circumstances. Because the language of the reporting instructions is open to interpretation and could result in reportable gifts going unreported, California lost points. Additionally, judges are only required to report the value of their income and investments in ranges, rather than specific figures.

Highlights:

  • Last December, California Justice Kathryn Werdegar owned between $100,001 and $1 million worth of stock in Wells Fargo — yet the judge participated in a court decision denying an appeal to a couple who accused Wells Fargo of predatory lending and unlawful foreclosure. While Werdegar participated in the court’s decision to deny the couple’s petition for review, Justice Marvin Baxter, who also reported financial ties to Wells Fargo, recused himself from the vote. Baxter’s 2012 financial disclosure shows that the judge owned between $10,001 and $100,000 in Wells Fargo stock. “Justice Werdegar and the other justices of the California Supreme Court routinely recuse themselves whenever a conflict of interest arises,” court spokesman Cathal Conneely wrote in an emailed response on Werdegar’s behalf. Unfortunately, he said, Werdegar’s acquisition of stock in Wells Fargo Bank was inadvertently omitted from the Supreme Court’s conflicts list. “The justice regrets the error and thanks you for bringing it to her attention,” he added. “The Supreme Court is re-examining its internal conflict of interest procedures to prevent similar errors in the future.”
  • In January 2012, Justices Ming Chin and Joyce Kennard joined the majority opinion in O’Neil v. Crane Co. Crane, an industrial-product manufacturer, was sued for a wrongful death allegedly caused by asbestos. The court ruled in favor of the company. Caterpillar, a heavy equipment maker, filed a “friend-of-the-court” brief on behalf of the defendants. Chin and Kennard both owned Caterpillar stock in 2012. In an emailed response on behalf of the judges, court spokesman Conneely wrote that the justices needn’t have disqualified themselves because Caterpillar wasn’t a party in the action.

Read more in Money and Democracy

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