NC among states faulted for lax financial disclosure rules for Supreme Court justices

cjarvis@newsobserver.comDecember 4, 2013 

Few states do an adequate job of making their Supreme Court justices disclose potential financial conflicts of interest, says a new report by the Center for Public Integrity.

The Washington, D.C., nonprofit investigative journalism organization gave failing grades to 42 states and the District of Columbia, based on a scorecard the center developed. California and Maryland were the two highest-scoring states, earning Cs. North Carolina was one of the states receiving an F; the state ranked 25th overall.

Despite the weak disclosure laws, the center found 35 examples of financial ties raising questions about conflicts of interest, including two in North Carolina.

N.C. Justice Paul Newby was cited for opinions he wrote in 2005 and 2009 related to the tobacco buyout. At the time, there was a dispute over how much tobacco companies had to pay growers in 14 states; North Carolina was the lead state to resolve disputes.

It was widely reported in 2005 that Newby and four other justices on the seven-member bench publicly declared they had financial interests in tobacco companies. Still, they handled the case, which resulted in more payments to farmers, including Newby.

In 2009, the court ruled that tobacco companies could stop making payments in Maryland and Pennsylvania, but the ruling didn’t affect N.C. farmers. The report says Newby received money for his Wake County land. Property records show he owns more than 100 acres designated as agricultural. His payments have been estimated at $35,700 over a 10-year period.

Newby declined to comment to the center.

Justice Bob Edmunds wrote a decision in 2010 siding with Abbott Labs, a company in which he owned stock in 2009 and 2010. He also reported owning Wells Fargo stock in 2011 and was part of a decision that favored the bank. Edmunds reported owning Duke Energy stock in 2012, yet participated in a case that overturned a rate hike.

Edmunds told the center those cases didn’t pose conflicts because the court’s rules allow minimal financial interest. He described his interest as “miniscule” but declined to say how much of a stake he had in the companies, the report says. North Carolina’s Supreme Court justices are required to report investments worth at least $10,000.

The center also faulted North Carolina for a new law allowing the state Supreme Court to discipline its own members instead of assigning those cases to a panel of appellate court judges. The General Assembly passed the bill – which also makes discipline for other judges more secretive – in the final hectic hours of the session.

Jarvis: 919-829-4576; Twitter: @CraigJ_NandO

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