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Judge Ortrie Smith: Transparency Goal of Committee on Financial Disclosure
Judge Ortrie Smith was appointed chair of the Judicial Conference Committee on Financial Disclosure in October 2005. He was appointed to the U.S. District Court for the Western District of Missouri in 1995.
Q: What are the responsibilities of the Committee on Financial Disclosure and how do these differ from the responsibilities of the Committee on Codes of Conduct?
A: First let me say that both groups have the salutary effect of promoting respect for and inspiring confidence in the Judiciary, but their responsibilities are quite different. As I understand the responsibilities of the Codes of Conduct Committee, it is essentially to monitor the Codes of Conduct and make suggestions for changes designed to establish guidelines governing the conduct of judges. An equally important responsibility of that Committee is its willingness to accept and respond quickly to the sometimes puzzling questions which arise daily with sitting judges. In addition, the Committee on Codes of Conduct provides confidential advisory opinions to judges upon request. I think it’s important to note that the Codes of Conduct Committee doesn’t actually enforce the Code. The enforcement responsibility is left with the various circuit councils.
We, on the other hand, have been delegated the responsibility for implementing the financial disclosure provisions of the Ethics in Government Act of 1978. And in order to do that, we review every financial disclosure report filed by judges and other judicial branch officers and employees.
In a given year we will review in excess of 4,000 of these financial disclosure reports, and upon completion of that review, certify compliance with the Ethics in Government Act. We then maintain copies of those reports for six years and make those reports available to members of the public who want to see them. We also approve and modify the forms and instructions used by the filers. We respond to requests for redaction of certain information from those reports, as provided in the regulations adopted by the Judicial Conference and the statute.
We propose changes in legislation. We have a proposal that has been approved by the Conference that would modify the filing requirements so as to eliminate the value in income codes from the assets held by judges. Those codes really make no sense because if you own one share of stock you are required to recuse; it doesn’t matter what the value of it is, or what income derives from it. That legislation has yet to find a sponsor, but we’re hopeful that at some point it will get a fair hearing by Congress.
We do have some enforcement authority. A late filer, for example, would be subject to a $200 late filing penalty. And for someone who deliberately disregards the filing requirements, ultimately we are authorized to refer the matter to the Attorney General for prosecution.
Finally, members of the Committee and staff provide education by speaking to groups of judges and other filers about their filing responsibilities and of course the staff is always available to respond to inquiries from filers.
Q: Why is it important that judges file accurate and timely annual financial disclosure reports?
A: The purpose of the Ethics in Government Act was to create a level of transparency in government. The Act was passed in 1978. Public confidence in government was at a low ebb and the idea was to provide information that would enable the public to evaluate their performance, determine conflicts of interest, watch for abuses of power, and the like. So in order to implement that goal, it is important that filers file their reports on time and also that the reports be as accurate as they can make them. The reports are scrutinized by the public and if the report is incomplete or inaccurate, then it sort of defeats the whole purpose—the purpose being to allow the public to evaluate official performance. That can result in criticism, sometimes unfair, but almost always avoidable criticism, of the Judiciary.
Q: The deadline for filing a report for any calendar year is by May 15 of the following year. Are deadline extensions available, and for how long?
A: Yes, we are authorized to allow extensions for up to 90 days, that would be August 13th, for an annual report. That’s the maximum extension that we are authorized to grant. The request for an extension should be forwarded to the Committee staff and it should state the reason for the request. Again, if the report isn’t filed in a timely manner there is a $200 fine but the Committee has, on occasion, forgiven or excused, payment of that fine upon showing of good cause.
Q: Will most people be able to file a financial disclosure report without assistance? Is it fairly straight-forward?
A: I believe everyone required to file the report is capable. It’s not that complicated. Further, we provide software to assist the filers. The software follows the report form for ease in use. It has key tips and videos, to help filers understand the disclosure requirements.
This year, for the first time, the software contains a self-audit function, which we’re really excited about because it will help filers avoid most of the common errors that we find on reports. About 40 percent of the filings generate correspondence from the Committee, either a letter of inquiry or an advisory letter. Most of the mistakes are repetitive and common to many reports, and the self-audit function, we think, will help the filer identify those errors before the report is filed and reduce the amount of correspondence from the Committee to the filers.
For those filers who simply don’t want to take the time—and it is admittedly a distraction from our primary responsibility—the Conference has authorized reimbursement to a filer of expenses up to $1,000 if he or she chooses to retain a professional to prepare the report.
Because there are often omissions through inadvertence and oversight, the Committee does correspond with filers. But we’re required to do that before we can certify compliance with the Ethics in Government Act. I know it’s a nuisance to the filers, I wish it weren’t so, and I’m excited about this self-audit feature because I think that’s going to eliminate a lot of those things.
A couple of years ago, we started issuing closure letters, which simply tell the filer that the report is in proper form, it complies with the Ethics in Government Act, and we’re closing the file. Before that, every piece of correspondence that came from the Financial Disclosure Committee made people’s stomach’s churn. Now they know there’s a possibility that there’s a closure letter in that envelope and maybe that will make their minds a little easier.
Q: How can members of the public get copies of financial disclosure reports?
A: We are required to make them available to the public. The requester simply completes a very simple one-page form providing some basic information, specifying the reports requested. We’ll then process that in accordance with the Judicial Conference regulations, notifying the filer of the request, redacting any excess information such as account numbers, addresses, and the like from the form. And then we’ll consider whether the release of the form in an unredacted format represents a threat to the security of the filer. In a proper case, we’ll redact certain portions of the report where those concerns are found to exist.
Q: Litigants often believe that a financial disclosure report will tell them what stocks a judge holds. What information is available—and what information is not available—in a financial disclosure report?
A: Let me begin by saying what a filer is required to include in their report: a complete listing of positions held by the filer, any agreements to respect to future employment, or continuing participation in a employee welfare benefit plan maintained by a former employee, non-investment income from whatever source, including fees, commissions, royalties and the like, reimbursements of any payment or other thing of value in excess of $305 in a reporting period for travel related expenses from private organizations or individuals; gifts other than transportation aggregating $305 or more received from any source during the preceding calendar year; liabilities exceeding $10,000 at any time during the reporting period, and then assets held for investment, having a fair market in excess of a $1,000, or annual income in excess of $200 during the preceding calendar year. Those are the things that are required to be dis closed and beyond that there is an entire constellation, I suppose, of issues that are not addressed by the Ethics in Government Act.
Q: What fees are charged for copies of reports?
A: The fee is $.20 a page. For a short report that might be $2 or $3 or $5. Some of these reports run scores and scores of pages, maybe 100 pages. In those cases it would be slightly more.
Someone who can demonstrate it is in the public interest that the fee be waived would not have to pay. Our definition of “public interest” simply means that the requester is unable or demonstrates an inability to pay the $.20 per page.
Q: Judges also are required to disclose certain information about their attendance at privately funded educational programs. Must this information also be reported on their financial disclosure reports?
A: The short answer is yes, IF the reimbursement exceeds $305.
There is, on the financial disclosure page of the J-Net, a side-by-side comparison of the financial disclosure requirements and attendance at private seminars. And I would commend that to any judges’ reading who might be confused about the difference in the various filing requirements.
Q: The availability of the reports to the public has raised security concerns. How has the Judiciary dealt with these concerns?
A: I think there is an increasing awareness, particularly in light of the tragedy which struck Judge Joan Lefkow in Chicago in 2005. I think there is increasing awareness that the things that judges do on a daily basis expose us to the anger and ire of people and organizations. It’s certainly not beyond the realm of possibility that someone’s safety would be endangered as a result of the decisions that we make on a daily basis. We are aware of those things and we try to take the necessary precautions to give us the highest level of security consistent with this whole concept of transparency. We do allow redaction of excess information, that is information which is not required by the Ethics in Government Act. In some instances where there is a threat to the security of a judge or his or her family, we’ll redact additional information. Generally, it is information that would reveal the whereabouts of the judge or his family in an unsecured location. If for example you’re on the board of your condominium association, someone might reasonably conclude that you live in that condominium, or if your wife is president of the PTA at Glenwood Elementary School, they might assume you have children in that school. That’s the kind of information that we think it’s reasonable to redact and so we do.