Alito’s vulnerability

November 11, 2005

For Dems who’ve hoped to see Samuel Alito’s Supreme Court nomination spark a massive fight that would ultimately force the White House to retreat, the past few weeks haven’t been going well. Key Dem senators have balked at the idea of a filibuster, and closely-watched GOP moderates have signaled that Alito may be acceptable to them. There’s still a lot of time left before the confirmation hearings begin, but Alito’s opponents haven’t made many strides in derailing this nomination.

As it turns out, however, critics may have just need a change in focus. To date, the idea has been to defeat Alito by emphasizing an ideological argument (i.e., Alito is too far from the mainstream). The far more salient problem for Alito, it seems, is ethics.

Supreme Court nominee Samuel A. Alito Jr. said yesterday that he did nothing improper when he ruled in cases involving two financial firms in which he held accounts, although he had told the Senate 15 years ago that he would step aside in matters involving the companies.

Alito, trying to quell conflict-of-interest issues raised by liberal opponents, said he had been “unduly restrictive” in promising in 1990 to recuse himself in cases involving Vanguard Group Inc. and Smith Barney Inc. After the Senate confirmed him as an appellate judge and when he subsequently ruled on routine cases involving the two companies, he said, he acted properly because his connections to the firms did not constitute a conflict of interest under the applicable rules and laws.

Alito had at least $390,000 in Vanguard mutual funds when he ruled in a 2002 case that favored the company. After a party to the suit complained, he stepped aside and another panel of judges reheard the case. Alito also ruled in a 1996 case involving Smith Barney, which was his brokerage firm.

Forget the filibuster; this is a problem for Alito.

First, the justification is hardly persuasive. Alito told the Senate he’d recuse himself from the cases, then he didn’t. I don’t quite know what “unduly restrictive” promises mean, but the bottom line remains the same. “You are ultimately the check on whether or not you kept your pledge,” Sen. Kent Conrad (D-N.D.) told Alito. “You indicated you would recuse yourself, and then did not.”

Second, Alito’s explanation contradicts the White House’s explanation. The Bush gang cited a courthouse “computer screening program” that was supposed to alert Alito to recuse himself. Alito had a far different take yesterday. When they’re not on the same page, it hints at a bigger problem.

And third, Republicans seem to believe this is of at least some significance. Judiciary Committee Chairman Arlen Specter has suggested the questions could endanger his nomination, and at least one conservative blogger-in-the-know suggests the answers to the questions thus far have been less than satisfactory.

The “out of the mainstream” argument doesn’t seem to be connecting, but the ethical question may be the difficulty for which there is no easy solution.

Seems like a stretch on this one folks. If he owned Halliburton and ruled favorably on the company, yes the stock goes up he benefits. How does a favorable opinion for a brokerage firm help him? If he owns mutual funds, nothing in the ruling is likely to impact the majority of stocks (unless the mutuals own the brokerage firm in their holdings. If they are “managing” his money, they should be maximizing his returns based on his stated risk profile, regardless of anything else. If they could do better and were not, legally, they’d be negligent. If they found he ruled favorably for them, they could only make his portfolio better illegally. You’d have to see evidence of insider info in terms of which stocks they place him in, or info that somehow related reduced fees to his work for them. Unless there is more info out there, I dont see how this is anything more than the appearance of an ethical conflict. And, for the record, Im not defending Alito or his views. I personally dont think he represents the America Id like to live in, but obviously there are plenty of people in this country who want to see it go backwards in time and who will stump for him as if he is the second coming…

  • To follow up… If the focus of that conflict issue is ethics, perhaps the only point you can push is that he said one thing and did another. Sadly, I think we will get stuck with this guy, unless something much more sinister pops up.

  • If he can’t see a conflict of interest here, then there’s no such thing as a conflict of interest.

    Are we supposed to believe that there weren’t any other judges available?

    Why did he agree to recuse himself before, with “overly restrictive” ethics?

    Have his other ethics become less “restrictive”?

    I think Joe American can understand that people with $400,000 worth of stock should not be allowed to decide court cases that involve the company they own stock in.

    I say pound this one into Joe American’s head, and when he gets through (which he probably will, unless they find a dead body in his back yard), the Republicans will have appointed a corrupt judge. (In the mind of Joe American).

    Americans FINALLY don’t think Bush can be trusted. The equation has changed, the burden of proof is on THEM to prove that they aren’t up to their usual tricks.

  • I don’t think so.

    There seems to be a cutural inertia when it comes to holding officials accountable in regards to monetary ethical lapses.

    Want some proof?

    How come Cheney STILL holds Halliburton assets?

    If the culture refuses to hold the VICE PRESIDENT accountable, smaller fish will easily swim through that net as well.

    Why does this inertia exists?
    That’s a fascinating question for sure.

  • My goodness… certainly if their side can wound John Kerry (bad pun intended) about whether his purple hearts were sufficiently heroic, our side can seriously question whether Mr. Alito’s ethics are strong enough for a Supreme Court seat based on a clear case of him saying one thing and doing another. If John Q. decides it’s not a sufficiently serious conflict of interest, so be it, but his explanation of why he said he would recuse himself and then didn’t is pretty crappy.

    Also, as I understand it, he hasn’t answered *at all* why he decided it was ok in the case of his sister’s law firm.

    It would be one thing to argue that there isn’t a serious conflict of interest, but the problem is that he specifically agreed to recuse himself, and then didn’t. To me, that makes the conflict look even worse– he *knew* it should raise questions, and he did it anyway.

    Let his team make the argument that it’s not a disqualifying offense, don’t make that case for him!

  • Having worked as an appellate clerk, I can say that a judge should not need a computerized screening program to know whether he has a conflict of interest in a case.

    Typically, appellate judges begin their review of a case a few months before the lawyers travel to the appellate courtroom and argue it. This is because an appellate judge needs to be prepared to ask questions of the lawyers during their arguments. Appellate clerks prepare bench briefs, and the judge to whom the case is assigned reviews the entire record of the case (including the entire trial transcript if the case has gone as far as a trial), all in advance of the oral arguments.

    It is hardly as if a judge is hauled out of bed, his robe wrapped around him and tossed onto the bench with no warning of who the parties to a case are. A reasonably careful judge knows who the parties are to the cases he is deciding. A judge who says he does not know who the parties are in time to recuse himself either is not a very prescient judge or is being cagey about why he remained on the case.

  • short fuse has it right—this should be an easy pick for Dems. Koreyel thinks “there seems to be a cultural inertia when it comes to holding officials accountable in regards to monetary ethical lapses.” No, there isn’t. There is a Democratic inertia to get out there and swing solid punches. Maybe it’s stupidity, maybe it’s fear, but neither of those qualities are ones I want in a leader.

    The problem isn’t corruption or the public’s apathy, it’s the fact that the only viable opposition stacks up about as solid as a paper plate in a dishwasher.

  • I hope you are right with this eadie:

    No, there isn’t. There is a Democratic inertia to get out there and swing solid punches. Maybe it’s stupidity, maybe it’s fear, but neither of those qualities are ones I want in a leader.

    One of the reasons I posted my inertia idea is because in the last 20 years I’ve seen the media engage in a lot of myth making about CEOs. The media paints these corporate bigwigs out to be glorified savants worthy of their outrageous salaries. To hear the media sing: You would think the greatest good a human being could with his life would be to rise to the level of being corporate executive. That’s the cream. That’s what we should all be dreaming about being.

    If you are with me on that, then you know the next step is to argue that big business in general is glorified by the media. And that’s where the public inertia comes from. Politicians who are entangled with big business get away with ethical lapses because the media has packaged our values to permit those lapses.

    How else can you explain that no one– except a few harmless bloggers– keep pointing out that the VICE PRESIDENT OF THE USA is drawing down paychecks from HALLIBURTON.

    HALLIBURTON = VICE PRESIDENT = MILITARY INDUSTRIAL COMPLEX

    I mean really…. WTF?

    Am I the only person in America that doesn’t need a lattern to see a dishonest man in daylight?

  • G2000 has it right. Investing in a mutual fund is not the same thing as investing in the financial service company that manages the mutual fund. Vanguard calls its investors “customers” and that’s what they are. I don’t know exactly what Alito promised 15 years ago, but I don’t understand why he would have promised to recuse himself from any case involving Vanguard.

    It would be like recusing yourself from every case involving United because it is your favorite airline and you have frequent fliyer miles.

    Millions of people own interests in mutual funds. They know this is a silly argument, and it makes us look ignorant. Much of the country already thinks Democrates don’t understand capitalism. Let’s not give them ammunition with silly stuff like this.

  • The questioning of Judge Alito’s ethics is important because his past judicial conduct will necessarily bear upon the manner in which he conducts himself as a member of the Supreme Court. One of the most foremost cases to cast doubt on his ethical conduct is the Vanguard matter. A quick overview might be helpful.

    This appeal by Shantee Maharaj concerned Vanguard’s liability in unlawfully seizing her late husband’s IRA in violation of federal and state laws, and Vanguard’s own IRA contract. This is clear from the Court records in her late husband’s case No. 95-5235 in the Federal District Court in Philadelphia. The lawsuit was for compensatory and punitive damages based on Vanguard’s unlawful conversion of Maharaj’s husband’s IRA which should have lawfully passed to her as Monga’s wife.

    It should be understood that no court involved in this litigation has ever found that the IRA was created or maintained as fraudulent instruments. In fact, on several occasions during the course of this matter, Mr. Monga formally requested that the respective court rule on whether the account was illegitimate to which no court chose to respond. It was partly for this reason that the Massachusetts receiver’s action in reaching these staturorily protected funds was illegal. I might add that there were letters from Vanguard’s own counsel which were introduced to the court early on stating that the IRA was legitimate. Please note that Vanguard retained $92,000 of Maharaj’s IRA, which is apparant from court records. Vanguard gave the rest to Attorneys John Ottenberg and Peter Brooks who paid themselves. Contrary to your indication, no creditor received any money.

    It is important to make note of the fact that there was never a hearing by the second panel (nor Alito’s panel) of this appeal. Judge Alito misrepresented this fact, as have many reports. The second panel only rubberstamped Alito’s rulings word for word, as is evident from Court records.
    Supporters of Judge Alito have made inaccurate assessments of Vanguard’s organization. Vanguard clearly states in its literature that it is owned by its investors. Vanguard further explains that, unlike most other mutual funds, it’s investors become shareholders in the management company known as The Vanguard Group. Vanguard’s own description of their operation must be taken as it is so clearly stated, as it must have been understood by Judge Alito.

    Some individuals have characterized Judge Alito’s recusal as if it is a unilateral act of courage. The facts show, however, that Judge Alito never asked that he be removed from the panel. Moreover, Judge Alito authored the Opinion in favor of Vanguard, a company in which he holds ownership. He even acquired Vanguard’s shares three times during the appeal while he made rulings in Vanguard’s favor. This is clear from the Court records. Court documents also show that it was only after Shantee Maharaj, Monga’s wife, challenged his participation in her appeal, that he recused himself.

    Judge Alito’s participation in the Vanguard appeal was improper. His promise in 1990 is evidence of his understanding that the judges’ recusal statute, 28 U.S.C. §§ 455(a), (b) & (d), would require him to do so. Judge Alito’s recent response to the Senate Judiciary Committee’s Questionnaire clearly shows that he continued to include Vanguard companies up through 2005 on his “standing recusal list.” Furthermore, Judge Alito added no stipulations to his promise, nor did he indicate that it was time-limited.

    The excuses that both the White House and Judge Alito have provided for the breaking of his promise are outrageous and taxing for any reasonably minded individual. The important fact remains that Judge Alito will be assuming one of the most important positions in our government. Consequently, the people of the United States have a right to know this man, not only as to his ability to adjudicate, but also the nature of his ethical and moral constitution. I believe that your editiorial failed to provide the obligation to fully inform your readers.

    This matter should act as a warning to all individuals who have Vanguard IRAs, and who believe that their hard earned money is safe. Despite the fact that there are statutes in place, as well as agreements with the funds custodians which are suppose to preserve these acounts, it is apparent that protection is not guaranteed when in the hands of Vanguard or in a case before Judge Alito. This is a distressing realization for all Americans who depend on these funds for their retirement.

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