Last December, the California Supreme Court declined to hear an appeal filed by a couple who had accused financial giant Wells Fargo & Co. of predatory lending.
One justice, who owned stock in the bank, recused himself from the case. But Justice Kathryn Werdegar, who owned as much as $1 million of Wells Fargo stock, participated — and shouldn’t have.
The Center for Public Integrity learned of Werdegar’s financial stake thanks to California’s relatively strong financial reporting requirements for justices. But California’s law is an exception.
Forty-two states and the District of Columbia received a failing grade in a Center evaluation of disclosure requirements for high court judges. And not a single state earned an A or a B.
Yet despite the dearth of information, the Center still found 35 examples of questionable gifts, investments overlapping with caseloads as well as other entanglements.
After reviewing three years of personal financial disclosures, the Center found judges who authored opinions favoring companies in which they owned stock. The Center found judges who ruled on cases even when family members were receiving income from one of the parties. And it found judges who accepted lavish gifts — like a $50,000 trip from a lawyer.
The Center also found that enforcement of disclosure rules is spotty. Twelve states, for example, rely on self-policing disciplinary bodies — made up of high-court justices themselves — to enforce the courts’ ethics rules.
Much has been made of the potential corrupting influence of campaign contributions on judicial elections. But little attention has been paid to the personal finances of the 335 judges in the state courts of last resort and how those holdings may influence decisions handed down from the bench.