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Alabama earns ‘F’ for judicial financial disclosure

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B

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 Alabama:

Strengths:

Alabama is one of just 12 states that post at least some portion of its judges’ financial disclosures online for the public to view. As a result, Alabama scored a perfect 10 out of 10 for allowing easy access to the annual reports. The state also fared well in the outside income category, scoring 15 out of 20 possible points. Judges must also list companies that employ their spouses.

Weaknesses:

Alabama has no requirements for judges to disclose gifts they receive. The state’s Ethics Commission sets a $25 limit on each gift received up to $50 from a single source in a year. However such rules do have loopholes, including only asking for the face value of tickets in a state where the Auburn University and University of Alabama football rivalry is legendary. “Those tickets could sell for $10,000 if people would offer them,” said Alabama Ethics Commission General Counsel Hugh Evans. The state also does not require any disclosures of paid trips, waived conference fees or similar reimbursements. “The form has not been changed in almost 40 years, and it’s unlikely that it’s going to be changed,” said James Sumner, director of the Alabama Ethics Commission. Sumner said that’s because the state legislature doesn’t seem to have the appetite for beefing up the current financial disclosure requirements. In 2010, when the legislature passed sweeping ethics reforms, Sumner says lawmakers declined to adopt a proposal that would have narrowed the broad dollar ranges used when officials report investments. “We got no movement on that at all,” he said. In addition to filing an annual Statement of Economic Interests form with the state Ethics Commission, Alabama judges must submit a separate financial disclosure to the clerk of the Supreme Court. But that report is kept sealed and confidential.

Highlights:

  • In 2010, Alabama Supreme Court Justice Jacquelyn Stuart wrote the majority opinion in a ruling that dismissed a securities-fraud lawsuit brought by a group of shareholders against Regions Financial Corp. Stuart reported earning dividends from Regions Financial and its banking subsidiary, Regions Bank, in disclosure reports dating back to 2007. In 2010, specifically, Stuart reported receiving less than $1,000 in dividends from Regions Financial. As to how much her investment is in Regions, we can’t tell from the disclosure. The state only requires judges to report stock ownership if it totals a 5 percent or more interest. It would take some doing to reach that threshold — the bank’s market capitalization is about $13 billion.
  • In February 2010, Stuart joined a unanimous court decision in a case involving 3M. In the case, 3M and a handful of other companies petitioned the Supreme Court for a change of venue related to a class-action lawsuit brought by Alabama landowners who claimed that the companies had polluted their property with dangerous chemicals. The court granted the companies’ request. Stuart’s 2010 disclosure lists less than $1,000 in dividend earnings from the company.

In an emailed statement, Stuart declined to comment about her stock ownership but pointed to Alabama’s Code of Judicial Ethics, including one section that states: “Ownership of a de minimis portion of the securities of a publicly traded corporation is not a ‘financial interest.’ A ‘de minimis’ portion is an interest that could not raise a reasonable question as to a judge’s impartiality.”