Federal judges face stricter stock disclosure rules in bipartisan bills

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The U.S Capitol seen at night from Pennsylvania Avenue in Washington, U.S., October 24, 2021. REUTERS/Sarah Silbiger/File Photo

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(Reuters) - A bipartisan group of lawmakers on Monday introduced legislation in both houses of the U.S. Congress that would require judges to report stock trades over $1,000 within 45 days and force the federal judiciary to post their financial disclosure forms online.

Lawmakers in the U.S. Senate and House of Representatives filed the two bills in response to a Wall Street Journal report that 131 federal judges failed to recuse themselves from cases involving companies in which they or their family members owned stock.

The Senate version of the bill, called the Courthouse Ethics and Transparency Act, would amend the Ethics in Government Act of 1978 to require judges to submit securities transactions reports in line with other federal officials under the STOCK Act.

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That law, which currently applies to federal agency employees and members of Congress, was enacted in 2012 to combat insider trading and requires government officials to report securities transactions over $1,000 within 45 days.

The legislation also calls for the Administrative Office of the U.S. Courts, the judiciary's administrative agency, to create a searchable publicly accessible online database of judicial financial disclosure forms that are posted within 90 days of being filed.

Judges' financial disclosures are filed annually by May of the following year, but requests for copies of the disclosure forms can take months or even years to fulfill.

The Free Law Project, a legal research nonprofit group, recently posted judges disclosures for 2010 to 2018 online but has said it is still waiting for copies of disclosures from 2019 to be released.

Republican Senator John Cornyn of Texas, who drafted the bill with Democratic Senator Christopher Coons of Delaware, said the legislation will ensure "litigants are protected from conflicts of interest and cases are decided fairly."

The bill is co-sponsored by Senate Judiciary Committee Chairman Dick Durbin, Democrat of Illinois and Republican Senator Chuck Grassley of Iowa, the committee's ranking member.

Democratic Senator Sheldon Whitehouse of Rhode Island and Republican Senators John Kennedy of Louisiana and Ted Cruz of Texas are also backing it.

Representative Deborah Ross, a Democrat from North Carolina, introduced a companion bill backed by four fellow members of the House Judiciary Committee including Darrell Issa, Republican of California, and Democratic Chairman Jerrold Nadler of New York.

An Administrative Office spokesperson in a statement said it was "considering ways to automate the release of these reports so they are available more quickly and in a manner more convenient to the public."

The agency's director, U.S. District Judge Roslynn Mauskopf, earlier this month in a memo said she was directing staff to evaluate ways to improve its conflict screening process following the Wall Street Journal report.

The U.S. House Judiciary Committee is slated to hold a hearing on Tuesday to investigate issues identified by the newspaper.

U.S. Circuit Judge Jennifer Walker Elrod of the 5th Circuit, who chairs the Judicial Conference's Codes of Conduct Committee, is expected to testify.

Nadler has said he plans to separately re-introduce legislation called the 21st Century Courts Act that would reform judicial financial disclosures and conflict rules.

(This story has been updated to correct the state that Representative Deborah Ross of North Carolina is from.)

Read more:

U.S. judiciary to review conflict policies after report on judges' stocks

U.S. House Democrats plan hearings on judges' conflicts of interest

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Nate Raymond reports on the federal judiciary and litigation. He can be reached at nate.raymond@thomsonreuters.com.