Congress approves tougher financial disclosure rules for U.S. judges

FILE PHOTO: Visitors at the U.S. Supereme Court building in Washington
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By Nate Raymond and Moira Warburton

WASHINGTON (Reuters) -Legislation that would subject U.S. Supreme Court justices and federal judges to tougher disclosure requirements for their financial holdings and stock trades passed the House of Representatives on Wednesday in a rare show of bipartisanship.

The bill, approved on a voice vote after winning Senate passage in February, would make it easier for the public to see if a member of the federal judiciary has a financial conflict of interest warranting recusal from hearing a case.

The Courthouse Ethics and Transparency Act now goes to President Joe Biden to sign into law. White House spokesperson Andrew Bates said that while he had yet to talk to Biden about the bill, "he has always been full throated about furthering ethics and transparency in government and restoring trust in institutions, and this kind of policy is aligned with those goals."

Lawmakers introduced the legislation in October after the Wall Street Journal reported that more than 130 federal judges had failed to recuse themselves from cases involving companies in which they or their family members owned stock.

"This is simply unacceptable," Democratic Representative Deborah Ross, who sponsored the House version, told Reuters ahead of the vote. "The judiciary should be subject to the same requirements as the legislative and executive branches."

The House in December approved a version of the bill with slight differences on a 422-4 vote.

The bill covers the nine Supreme Court justices as well as some 2,500 federal appellate, district court, bankruptcy and magistrate judges, said David Sellers, a spokesperson for the Administrative Office of the U.S. Courts, the judiciary's administrative arm.

"Our federal judiciary is the envy of the world, and Congress has an obligation to ensure that this hard-earned reputation is maintained," Democratic Representative Jerrold Nadler, who chairs the House Judiciary Committee, said at a hearing related to the bill.

The federal judiciary has sought to better police itself following the Journal's report by bolstering ethics training and adopting a new system to process disclosure reports, steps some lawmakers deemed inadequate.

The bill calls for making federal judges follow similar disclosure requirements as lawmakers by establishing a 45-day window for judges to report stock trades of more than $1,000.

Under it, the Administrative Office of the U.S. Courts must also create a searchable and publicly accessible online database of judicial financial disclosure forms posted within 90 days of being filed. It calls for the database to be online within 180 days of enactment, though the judiciary can obtain extensions.

"This legislation will help bring potential conflicts of interest to light and bolster public trust in our judicial system, and I'm glad it is on its way to the president's desk," Republican Senator John Cornyn, who sponsored the bill in the Senate, said after its House passage.

Sellers said the judiciary had already taken a number of steps to strengthen its conflict screening policies and is "prepared to add features to our public release system to address other aspects of this bill."

While judges file annual financial disclosure reports, requests by litigants or members of the public to review them are sent to judges themselves to decide if anything needs to be redacted and can take months or longer to fulfill.

U.S. Chief Justice John Roberts, the judiciary's senior-most member, in a year-end report in December called the recusal lapses the Journal identified "isolated" and "unintentional," but said the judiciary took the concerns "seriously."

Democrats are seeking even broader legislation revamping federal judiciary ethics, recusal and travel rules and requiring the Supreme Court to adopt an ethics code. They have pressed for Supreme Court Justice Clarence Thomas to recuse himself from cases over the Jan. 6, 2021, attack on the U.S. Capitol by former President Donald Trump's supporters due to activities of the justice's wife, a conservative political activist.

Congress faces public pressure to impose controls on financial transactions by its own members, including possibly banning them from buying and selling stocks, though that effort is not very far along.

(Reporting by Nate Raymond in Boston and Moira Warburton in Washington; Editing by Will Dunham and Alexia Garamfalvi)