The Supreme Conflicts of Interest
From theWasington Post
Sell the Stock
Financial conflicts are hobbling the Supreme Court.
Saturday, May 17, 2008; A16
THE SUPREME Court found itself paralyzed this week, unable to decide whether to take up an important class-action case against companies that allegedly aided and abetted South Africa's apartheid regime. The result is unfortunate, leaving in place a flawed lower-court decision that allows the misguided litigation to proceed.
The reason for the impasse: The court fell short of the required six-justice quorum because four justices recused themselves because of conflicts of interest. Justice Anthony M. Kennedy reportedly could not participate in the case because his son works for Credit Suisse Group, a defendant in the case. Three others -- Chief Justice John G. Roberts Jr. and Justices Stephen G. Breyer and Samuel A. Alito Jr. -- apparently declined involvement because they own shares in defendant companies. Justice Kennedy's predicament is unavoidable; that is not the case with the others.
Judges must recuse themselves if they have a financial or personal interest in a case. By this measure, the chief justice and Justices Breyer and Alito did the right thing by stepping aside. What makes this situation confounding, however, is that the justices could have averted a conflict if they had kept their investments in mutual funds rather than in individual stock, which are the most likely to trigger a conflict. Chief Justice Roberts, one of the newest and wealthiest arrivals to the court, should be commended for having taken steps in that direction. But he and his colleagues should go further. A law passed late last year allows judges to avert capital gains taxes if they sell financial holdings to resolve conflicts of interest. All of the justices should take advantage of this provision.
No one wants to see justices take a financial hit. As it is, their public-sector salaries are dwarfed by the millions earned by often less talented lawyers in the private sector; Congress could narrow this disparity by giving federal judges a much-deserved pay raise. But there is something discomfiting about the highest court in the land having to retreat from an important legal matter because of the financial considerations of its members. The justices would do themselves and the public a great service by promptly divesting themselves of any holdings that could keep them from fulfilling their professional duties.