September 15, 1995
PERSONAL AND CONFIDENTIAL
Investment in and service as director of bank
In re: Committee on Standards of Conduct Governing Judges
Your Inquiry Dated July 13, 1995
You inquire whether you may invest in and become a director in a new bank. You have been asked to participate both as an investor and director of a soon to be formed commercial bank. You intend to purchase the stock with funds in your IRA account. You further intend that the custodian or your IRA account, Dean Wittter Reynolds, will hold the stock.
As to whether you may invest in the bank, nine members of the Committee believe this activity is allowed under the Code. Canon 5D(1) states that a judge cannot engage in business and financial dealings that could reasonably be perceived to exploit that judge's position or "involve the judge in frequent transactions or continuing business relationships with those lawyers or other persons likely to come before the court on which the judge serves." Canon 5D(2) allows a judge to hold and manage investments belonging to the judge or members of his family.
Subsection 4 of Canon 5D mandates that a judge "shall manage the judge's investments and other financial interest to minimize the number of cases which the judge is disqualified." It further provides that a judge is to divest himself of such investments or other financial (sic) that might require frequent disqualification. Canon 3E(1)(c) provides that a judge should disqualify himself where
the judge knows that he or she individually or as a fiduciary, or the judge's spouse, parent, or child wherever residing, or any other member of the judge's family residing in the judge's household has an economic interest in the subject matter in controversy or in a party to the proceeding or has any other more than de minimis interest that could be substantial (sic) affected by the proceeding.
It is somewhat doubtful that your investment in the bank would violate any of the above Canons as you are currently assigned to the family division and will rotate in 1996 to the felony division. You expect to retire in January 2000. However, you still need to monitor your investment to make sure you do not run afoul of the Canons.
The dissenting member of the Committee believes that Canon 5D(1) prohibits your investment in the bank, stating:
I disagree that it is appropriate to invest in the bank, and believe this would violate Canon 5D(1). If the judge is assigned to the civil division, he would routinely preside over cases involving banks. He naturally would have to disqualify himself from cases involving any bank. Otherwise, his impartiality could be seriously questioned.
Further, I do not believe he can escape this obvious conflict by stating he is in another division and plans to retire in a few years. Besides assignments and plans being always subject to change, a judge should not limit the areas of the law over which he can preside for personal financial reasons. Canon 3A expressly prohibits a judge from allowing other activities to take precedence over his judicial duties, and such duties include all the duties of the judge's office prescribed by law. (emphasis in original)
As to your second inquiry, the Committee unanimously agrees that you cannot serve as a director of the bank. Canon 5D(3) states that "[a] judge shall not serve as an officer, director, manager, general partner, advisor or employee of any business entity." There are two exceptions to this rule, but neither is applicable here. The Committee directs your attention to Opinions 73-12, 73-13, 77-3 and 78-8, all of which hold that a judge may not be a director in a bank or savings and loan association.
The Committee is expressly charged with rendering advisory opinions interpreting the application of the Code of Judicial Conduct to specific circumstances confronting or affecting a judge or judicial candidate. Its opinions are advisory to the inquiring party, to the Judicial Qualifications Commission and to the judiciary at large. Conduct that is consistent with an advisory opinion issued by the Committee may be evidence of good faith on the part of the judges, but the Judicial Qualifications Commission is not bound by the interpretive opinions by the Committee. Petition of the Committee on Standards of Conduct Governing Judges, 327 So.2d 5 (Fla. 1976).
Very Truly Yours,
Oliver L. Green, Jr., Chairman
Committee on Standards of Conduct
CC: All Committee Members
Office of the State Courts Administrator
(Name of judge deleted from this copy)
Participating Members:Judges Cardonne, Dell, Doughtie, Green, Kahn, Patterson, Rushing Silverman, Tolton and Attorney Cushman