Judge Took Black/Bank Matter Second Time,
Supporters’ Defense of Troubled Nominee Undercut
FOR IMMEDIATE RELEASE
February 20, 2002
CONTACT: Doug Kendall 202-296-6889
available documents undercut claims by supporters of federal
Judge D. Brooks Smith that the controversial nominee to the
Third Circuit exercised an "abundance of caution"
in avoiding illegal stock conflicts in a historical financial
Smith came under fire today when newspaper accounts indicated
he ruled in a high-profile 1997 fraud case involving a bank
in which he held large amounts of stock, then failed to notify
the public about his conflicts. The judge cast two rulings
that advanced the bank's interests.
Smith's defenders say he took himself off the case when he
realized after a month of actively ruling on the case that
his wife worked at the bank involved in the case. However,
new public documents provided today to the Senate Judiciary
Committee (available free to the public at www.ewg.org)
show that Smith chose to again involve himself in the controversy
by presiding for an additional five months over a related
case involving the same bank and a massive school district
In 1997, in a case called
SEC v. Black, Judge D. Brooks Smith issued several important
and apparently illegal rulings in the heavily covered case.
Federal judges must know their investments and
avoid ruling in cases in which their financial interests are
In the words of preeminent legal ethics expert Steve Lubet
of Northwestern University School of Law, Judge Smith's rulings
constitute "an inexplicable lapse, because the facts
are clear and the law is clear and there isn't any question
that [Smith] is disqualified, but he continued to sit on this
case for 30 days."
Yesterday, a senior Bush Administration official, (who asked
to remain anonymous), defended Judge Smith's actions as "proper"
and described Judge Smith as having exercised "an abundance
of caution," because he ultimately disqualified himself
from the case.
Judge Smith's rulings in the 1999 case,
USA v. Black, came two years after Judge Smith had recognized
that he was disqualified in the earlier, related,
SEC v. Black. Smith
still issued several orders including a detailed trial scheduling
order. By this point, Mid-State Bank,
where Judge Smith's wife was a high-ranking officer and in
which the Smiths owned a large amount of stock, had been
sued in state and federal fraud cases, including a case brought
by former U.S. Attorney General and former Pennsylvania Governor
Richard Thornburgh for its role in the fraud. Nonetheless,
Smith sat on the case and disqualified himself only after
a party filed a motion seeking his recusal.
In disqualifying himself, Judge Smith again relied entirely
on his wife's status as a Vice President of Mid-States Bank,
failing again to disclose his large financial stake in the
Bank. Smith also
admitted in the recusal statement that he considered recusal
at the outset of U.S.
v. Black, yet failed even to inform the parties of the
basis for seeking his recusal.
Judge Smith blatantly violated the judicial ethical rule that
"a judge should disclose on the record information the
parties or their lawyers might consider relevant to the issue
of disqualification, even if the judge believes there is no
real basis for disqualification.”
According to Community Rights Counsel Executive Director Doug
Kendall, "It’s hard to fathom how Judge Smith could sit
on the second case for even a day. It clearly
violates federal recusal law and raises serious questions
about Judge Smith's fitness for a seat on the appellate bench.”