Bloomberg columnist Ann Woolner had a fascinating/disturbing analysis today showing what happens when judges come on the bench and don’t put their investments in blind trusts, or sell their shares “and put their money where they have no control over it.”
Good news for BP Plc. and other oil, coal and chemical companies seeped out last week from New Orleans, barely noticed in the blanket coverage of the as-yet uncontrolled oil gusher in the Gulf of Mexico.… [The companies won a widely watched global warming lawsuit] because appellate judges with conflicts of interest, presumably because of stock ownership, stepped off the case. Without a quorum the judges couldn’t consider the case, so they dismissed it. The outrageous part is that three, un-conflicted judges on that same court had already ruled against the energy companies in the same case. But their opinion was nullified and is now dead, according to the court.”
(Here is more coverage of that case from the New York Times.)
Woolner also mentions that the “U.S. Supreme Court had to give up on a case involving American corporate involvement in South Africa’s apartheid for lack of a quorum. And the court’s ruling on damages for the Exxon Valdez spill turned out 4-4 on some issues because Justice Samuel Alito had shares in the company and stepped aside."
Meanwhile yesterday, Louisiana U.S. District Judge Carl Barbier apparently told his broker to sell his Transocean and Halliburton bonds. But he says he didn’t really have to. He explained, “the judicial code of conduct forbids federal judges from owning common stock in a corporation involved in any case that comes before them However, recusal is not required if the stock is part of a mutual fund unless the judge participates in the management of the fund. Nor is recusal required because of ownership of debt instruments such as corporate debentures or bonds.”
The big problem here, writes Woolner, is that “Too many business cases get decided, not on the merits, but because judges own shares in companies that come before their courts.” Just when you thought corporate America couldn’t strangle our democracy any more than it already has.…