Documents Show Controversial Bush Judge Broke Ethics Law
by Will Evans

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A controversial Bush nominee on the verge of joining one of the country's highest courts has apparently violated federal law on judicial conflicts of interest repeatedly since his nomination.

Terrence W. Boyle, a long-time federal judge in North Carolina, was nominated by President Bush in 2001 to the 4th U.S. Circuit Court of Appeals, based in Richmond, Va. Senate Democrats have blocked his confirmation for years, but Boyle, 60, appears to be headed for the final stage of the process - a full Senate vote that could come soon and may ignite partisan warfare.

Since his 2001 nomination, however, Boyle has issued orders in at least nine cases that involved five different corporations in which he reported stock holdings, according to financial and court documents. In most of the cases, Boyle ruled in favor of his financial interest, though it is a violation regardless of how he ruled.

Federal law and the official Code of Conduct for U.S. Judges explicitly prohibit judges from sitting on such cases - no matter how small their stock holdings - in order to ensure public trust in the judicial system.

A Salon/CIR investigation reveals that Terrence Boyle, a key circuit court nominee touted by the White House and Senate Majority Leader Bill Frist, ruled in multiple cases involving corporations in which he held investments.
By Will Evans

From Salon.com

May. 01, 2006 - Starting in 2002, Terrence W. Boyle, a longtime federal district court judge in North Carolina, presided over a lawsuit against General Electric, in which the corporation stood accused of illegally denying disability benefits to a long-standing employee. Deep into the case, on Jan. 15, 2004, Judge Boyle bought stock in General Electric, according to a review of his financial filings. Two months later, he made his ruling: Boyle shot down the plaintiff's claims to long-term and pension disability benefits, granting him only a fraction of the money in short-term compensation for a debilitating mental condition.

Boyle, 60, a controversial Bush nominee strongly opposed by Democrats and liberals as a staunch foe of civil rights, is on the verge of joining one of the country's highest courts. An investigation by Salon and the Center for Investigative Reporting has revealed that Boyle apparently violated federal law prohibiting judicial conflicts of interest -- not only in the G.E. case, but in many instances since his nomination by President Bush five years ago.

Bush nominated Boyle in 2001 to the 4th U.S. Circuit Court of Appeals, based in Richmond, Va. Senate Democrats have blocked confirmation of the one-time Jesse Helms staffer, though his conflicts of interest on the bench have not come to light until now. Senate Republicans pushed Boyle through the Judiciary Committee last summer. Now, with the full-throated backing of Senate Majority Leader Bill Frist and the White House, Boyle appears to be headed for the final stage of the process -- a full Senate vote that could come soon and may reignite partisan warfare that in 2005 led to threats of a "nuclear option" to wipe out filibustering of judicial nominees. Frist reportedly aims to use a fight over Boyle and other controversial nominees to fire up conservative voters and help fill campaign coffers heading into congressional elections this November.

Early in his nomination process in 2001, Boyle wrote to the Senate Judiciary Committee in response to its routine questionnaire: "I will avoid any conflict of interest, potential conflict of interest, or appearance of conflict of interest. I am disqualified from presiding over, or being involved with, any litigation involving any party with whom I might have any financial interest."

At the very time Boyle typed up that pledge of integrity, however, he was in the middle of a case involving Quintiles Transnational, a pharmaceutical services company in which he reported stock holdings, and on whose behalf he had been issuing favorable rulings.

In fact, since his May 2001 nomination, Boyle has issued orders in at least nine cases that involved five different corporations in which he reported stock holdings, according to financial and court documents. In most of the cases, Boyle ruled in favor of the companies in which he had financial interests -- though his participation was a violation of the law regardless of how he ruled. Federal law and the official Code of Conduct for U.S. judges explicitly prohibit judges from sitting on such cases -- no matter how small their stock holdings -- in order to ensure public trust in the judicial system. From 1999 to 2004 (the years that Boyle's financial disclosure forms are currently available), he broke the rules in at least one case per year. Boyle presided as chief judge of the U.S. District Court of the Eastern District of North Carolina during those years.

"It's a pretty egregious example of a judge disregarding the brightest-line rule of judicial ethics," said Doug Kendall, executive director of Community Rights Counsel, a nonprofit public-interest law firm in Washington that works to expose ethical conflicts of judges.

Professor Leslie W. Abramson, a judicial ethics expert at the University of Louisville's law school who reviewed Boyle's record, said it shows at least a pattern of negligence, if not one "heading toward intentional disregard" of federal law. "Judge Boyle's conduct," Abramson said, "places his own and the judiciary's integrity and reputation at risk."

Boyle did not return repeated phone calls to his office requesting comment. He also did not respond to a letter, delivered April 19, detailing the cases at issue and asking for specific explanation.

None of the lawyers and plaintiffs interviewed by Salon had any idea about Boyle's conflicts in their cases. Martha Bursell, the widow of the General Electric employee, Ken Bursell, who ended up in Boyle's court, was surprised and outraged to learn the judge had purchased G.E. stock.

"Why could he get away with doing it?" she asked in a phone interview from her home in Indian Trail, N.C.

In March 2004, the same month Boyle ruled in the G.E. case, he also ruled in favor of Midway Airlines in a bankruptcy case. At that time, Boyle owned stock in Midway in a trust account. (The stock was basically worthless because of the bankruptcy, though he still listed it as a financial investment.) Boyle's ruling was later partially reversed on appeal by the 4th Circuit Court. One of the Democrats' common criticisms of Boyle is that he has been reversed on appeal at an unusually high rate, though his supporters dispute that.

Kendall, who also reviewed Boyle's records, said there's not enough money involved to conclude that Boyle made any rulings for personal financial gain. All of the stock holdings at issue were valued below the $15,000 mark according to his financial disclosure forms, and many were worth substantially less. But, Kendall said, the violations are especially glaring because he committed them as a circuit court nominee. "You would think he would be particularly careful at that point," Kendall said, "and apparently he has not been."

Professor Monroe Freedman, an ethics expert at the Hofstra University School of Law, said Boyle's conflicts of interest alone should prevent his confirmation to the nation's second highest bench. "If they're going to let people get by and confirm people who have this kind of background, why should anybody then be surprised when we have a federal bench with judges on it that engage in unethical conduct?" Freedman asked. "He is disregarding the law. I'm appalled that he got past the Judiciary Committee." Freedman added that given Boyle's record, if the Senate votes to confirm him, "they communicate the message that the disqualification statute doesn't matter."

President Ronald Reagan appointed Boyle to be a federal district judge in 1984, with a push from former Sen. Jesse Helms, who once employed him briefly. President George H.W. Bush nominated Boyle to the appellate bench in 1991, but Boyle never made it to a Senate vote. He remains a favorite of conservatives, and currently holds a unanimous well-qualified rating from the American Bar Association. But Democrats and liberal advocacy groups have vigorously criticized him for his numerous rulings on disability, gender and racial discrimination cases.

Bush renominated Boyle in 2003 -- when then-North Carolina Sen. John Edwards was key in blocking his confirmation -- and again in 2005. With Edwards gone from the Senate, Boyle got past the Judiciary Committee last summer on a party-line vote.

Frist has made it clear he'll push for a full Senate vote for Boyle and other controversial nominees soon. "In the coming weeks, we need to ... confirm new nominees to fill vacancies on the federal bench," Frist said in an April 27 speech touting Brett Kavanaugh, another controversial circuit-court nominee Frist is currently pushing along with Boyle. Frist emphasized, "We need judges on our courts who are qualified, who demonstrate the highest integrity ... and will respect the rule of law and the Constitution."

"Frist's successful fight on circuit judges last year energized the base and contributed to small donor giving for Senate Republicans," a GOP leadership aide said on April 20, according to the National Journal publication CongressDaily. "Future fights on pending circuit court nominees over the next few months will show voters the difference between Senate Republicans and the obstructionist Senate Democrats." In the same report, a spokesman for Minority Leader Harry Reid said Frist's efforts were directed toward 2008 as well, labeling them "part of the Bill Frist presidential campaign of throwing a little red meat to the base."

Meanwhile, White House spokeswoman Jeanie Mamo said in an April 24 article in the Raleigh News & Observer that "Judge Boyle has a distinguished record of judicial service and should be confirmed immediately."

Neither the White House nor Sen. Frist's office responded to calls seeking comment on the conflicts of interest riddling Boyle's record. In an e-mail, a Department of Justice spokesman wrote, "as a matter of practice the Department of Justice does not comment on pending nominations."

Boyle is not the only Bush circuit-court nominee found to have repeatedly violated conflict of interest law. Salon reported in January that Judge James H. Payne of Oklahoma had issued more than 100 orders in cases involving companies in which he had financial interests. In reaction to the report, the American Bar Association lowered its rating of Payne, whom Bush had nominated to the 10th U.S. Circuit Court of Appeals. At the time, Senate Judiciary staff and the chief judge of the 10th Circuit also said they would investigate Payne's record further.

By March, Payne withdrew from the nomination, while declaring "the allegations were without merit," though he offered no further explanation of his record. In a letter to President Bush, later published in Payne's hometown paper, he explained that he was obligated to turn down the appointment to the higher court so that he could finish overseeing the renovation of information technology systems at his current courthouse in Muskogee.

Like nearly all federal courts nationwide, the North Carolina court where Boyle serves is equipped with a computer system designed to avert conflicts of interest. Judges can plug in a list of their financial interests, and have the computer screen the cases. University of Louisville's Abramson advocates that court clerks run the program and reassign problem cases before they ever reach the judge's chambers.

Boyle's court, however, doesn't use the system. Instead, judges themselves are responsible for looking over the cases assigned to them and determining if they have any conflicts of interest.

"We've been successful with the current situation," said Michael Brooks, acting clerk of Boyle's court.

Regardless of what system a judge chooses to use, federal law says a judge is responsible to "inform himself about his personal and fiduciary financial interests" in order to avoid conflicts.

Several lawyers litigating against the companies in which Boyle had financial interests said they trusted Boyle and were not bothered by his participation in the cases, even when he had ruled against them. Jerry Leonard, for example, is a Raleigh lawyer who brought a case against AT&T, in which Boyle made only one routine, administrative order. A former judge and self-described "wide-eyed liberal," Leonard said he shares the view of many local lawyers that Boyle is fair-minded, and "probably the best judge we have around here." He added: "That's not saying a lot at all."

In a case in 2002 against America Online and other companies, one plaintiff did request that Judge Boyle recuse himself, but Boyle refused. The plaintiff alleged he was biased against her -- though, ironically, she did not know at the time of Boyle's reported stock holdings in AOL Time Warner, the parent company of America Online.

Refuting her, Boyle wrote, "In this case, Plaintiff has presented no evidence of bias whatsoever ... The Court can only guess that Plaintiff's motion is based on the fact that this Court has previously dismissed some of the cases filed by Plaintiff."

Also in 2002, Boyle ruled in favor of Midway Airlines when the company was in Chapter 11 bankruptcy and hoping to bounce back. Theoretically, if the airline survived, Boyle's investment in the company had a chance of being worth something again. North Carolina's labor department had investigated Midway and found it owed $2.1 million in vacation pay to more than 1,000 workers. Midway disagreed. Boyle ruled that the labor department couldn't sue Midway in state court to get the money; it could only seek the vacation pay through bankruptcy proceedings.

"It limited the state's ability to pursue this particular kind of claim, at least in this (judicial) district," Daniel Addison, a special deputy attorney general who worked on the case, told Salon. Addison said he didn't know Boyle owned stock in Midway at the time, and declined to comment specifically on that.

By the time Boyle made that ruling in the Midway case, he had begun presiding over Ken Bursell's case against General Electric.

After 20 years at the company, Mr. Bursell was accused one day in 1999 of stealing two laptop computers, according to his lawsuit. He was immediately suspended from work and escorted by security to his truck. He was later reinstated, but never recovered emotionally. He developed major depression, panic and obsessions from the incident, according to his psychiatrist. He felt violent rage at work, and decided he couldn't stay there. He couldn't hold down another job, or even go to the store alone. He was diagnosed as totally disabled.

"It broke his spirit, he was never the same," said his widow. "He just went into complete breakdown." Mrs. Bursell, 61, said her husband's downward spiral helped lead to his death from cancer last year.

G.E. repeatedly refused Bursell disability benefits. Other doctors, whom the company had review his medical condition, found him capable of working.

Boyle's ruling in the case, handed down two months after the judge invested in General Electric stock, was disappointing to the Bursells. "It was not much money," said Mrs. Bursell.

She now believes her husband couldn't have received a fair hearing in front of a judge with financial interests in G.E. -- but how were they supposed to know? "I would have loved to have known what was going on, because I'm a fighter," she said, after learning of Boyle's financial records. "To me, he shouldn't do it."

John Doyle, a lawyer for General Electric in the case, said he wasn't aware of any stock conflict at the time of the case.

Six months after his judgment in the G.E. case, Boyle ruled in another emotionally charged case. And he committed another apparent violation of ethics law. On Sept. 17, 2004, he ruled against Deborah Virgil, whose 11-year-old son, Craig, had been hit and killed by an Amtrak train in Elm City, N.C., in March 2003. With the crew failing to notice, the train hadn't stopped after striking the boy until it had passed the next station.

Virgil sued the conductor, Amtrak and CSX Transportation, the company that owned and operated the tracks. Boyle reported stock holdings in parent company CSX Corp. while he presided over the case. Virgil's attorney filed motions that would have sent the case to a county court instead. But accusing Virgil of shopping for a friendlier court, Boyle rejected those motions, taking the ethical high ground.

"Fairness to all in the litigation process warrants the suppression of undisciplined forum shopping," Boyle wrote.

The parties settled shortly afterward

-- By Will Evans

Alliance For Justice Report on Justice Boyle's nomination

Black leaders urge nominee rejected
Richmond Times, Apr 11, 2005

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CHARLOTTE, N.C. - Black leaders urged the U.S. Senate to reject the nomination of U.S. District Judge Terrence Boyle to the federal appeals court in Richmond, Va., saying his hostility to civil rights and high rate of reversal makes him unfit for the job.

Boyle, a former aide to Jesse Helms, the retired Republican senator from North Carolina, has been seeking a promotion to the 4th U.S. Circuit Court of Appeals since 1991, when President George H.W. Bush first nominated him at Helms' urging. The court hears cases from Maryland, North Carolina, South Carolina, Virginia and West Virginia.

"This is a lifetime appointment," said U.S. Rep. Mel Watt, D-N.C., chairman of the Congressional Black Caucus.

"A lot of people in North Carolina, including progressive white people, should be outraged that we are still living in the shadow of Jesse Helms," Watt said following a news conference at which he was joined by other civil rights leaders.

Democrats have consistently blocked Boyle's nomination, with senators and liberal groups saying he has been reversed by higher courts too many times and that he has ruled unfairly on civil rights, women's rights and employee's rights.

"Judge Boyle is the last judge who should be added to our circuit court," said Keith Sutton, president and chief executive of the Triangle Urban League in Raleigh. "Our circuit is nationally known as the most extreme in the country when it comes to interpreting civil rights laws.

"Our circuit is in desperate need of a moderating influence," he said. "Terrence Boyle will not provide that moderation."

Last month, Boyle defended his nomination before the Senate Judiciary Committee.

"I think that a careful look at my record will show that I am evenhanded, that the cases I have decided have been decided on the facts as I understood them at the time and not based on any agenda," he said.

The Southern States Police Benevolent Association and the Leadership Conference on Civil Rights also are on record in opposition to Boyle's nomination.

Wade Henderson, executive director of the Leadership Conference on Civil Rights, said his organization was ready to "go to the mat" to defeat Boyle's confirmation.

"There's a line in the sand when it comes to Terrence Boyle," he said Monday.

After the first President Bush nominated Boyle in August 1991, Democrats stalled the nomination. President Clinton later withdrew Boyle's name. In retaliation, Helms refused to allow any of Clinton's nominees from North Carolina to move forward in the Senate.

The current President Bush renominated Boyle in 2001, but former Sen. John Edwards, D-N.C., refused to let the judiciary committee consider the nomination.

Now that Edwards has been replaced by Republican Richard Burr, Republicans again are trying to move Boyle's nomination.

On Monday, Watt called on Burr and U.S. Sen. Elizabeth Dole, R-N.C., to nominate another candidate for the post. Neither senator immediately returned calls seeking comment Monday.

"I'm calling on my Senate colleagues to use their power to move this state out of the last century and into the 21st century," Watt said. "I call on them to express themselves."

Boyle is one of 20 Bush judicial nominees who did not make it through the Senate last year. Ten of them were blocked by Democrats and the Senate confirmed 204 others.

28 USC Sec. 455: Disqualification of justice, judge, or magistrate judge [PDF]

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In 1974, Congress revised the law on judicial conflicts of interest to make the rules on recusals more strict and objective. The new law basically set in stone the judicial code of conduct previously adopted by the federal judiciary: "(a) Any justice, judge, or magistrate judge of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned. (b) He shall also disqualify himself in the following circumstances: ... He knows that he, individually or as a fiduciary, or his spouse or minor child residing in his household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding; ... 'financial interest' means ownership of a legal or equitable interest, however small& "

Remember John Roberts

Courting Big Business:
Is the Bush White House using the courts as another way to pay back special interests?

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When President Bush nominated William G. Myers III for the 9th U.S. Circuit Court of Appeals in San Francisco in May 2003, judicial experience apparently wasn't a factor in the choice. Myers has spent little time in the courtroom as a lawyer, and has never been a judge. Instead he made his name as a lobbyist for major Republican donors, especially in the coal industry. Despite that lack of experience, the Senate Judiciary Committee voted 10-9 to move Myers' nomination to the full Senate on Thursday.

But a Federal Trade Commission decision to block a Wyoming coal consolidation that was made possible by a Myers lobbying blitz is shining a spotlight on the nominee's corporate background, and raising new questions about whether the Bush White House is using the courts as another way to pay back the special interests from which it raises millions of dollars. Corporate interests have become increasingly involved in attempts to influence the outcome of state judicial elections, so developing sway with the federal judiciary seems a logical step. There is no doubt that confirming Myers would give big business a friend on the crucial 9th Circuit Court of Appeals.

Myers and his law firm earned hundreds of thousands of dollars representing the cattle and coal industries that are so important in Vice President Dick Cheney's home state of Wyoming. The new 9th Circuit nominee lobbied successfully on behalf of the state's three largest coal operators, Arch, Peabody and Kennecott, to pass legislation to significantly boost the amount of coal these companies mine on U.S. government land. The government controls coal leasing on federal land to promote market competition among coal producers and thereby control costs that utilities must pay to produce electricity from coal for consumers. The three Wyoming giants also happen to be the largest coal operators in the nation.

When Sen. Dianne Feinstein, D-Calif., asked Myers about his role in lobbying for the legislation, he pointed out that it passed with widespread support and was signed into law by President Clinton just weeks before the 2000 election. What Myers didn't say is that the new legislation, known as the Coal Market Competition Act of 2000, helped pave the way for the proposed Arch-Triton consolidation, which the FTC has now ruled will weaken domestic competition in the coal industry, particularly in Wyoming, the so-called Saudi Arabia of coal.

Myers' client Arch Coal, the nation's second-largest coal producer, announced last year that it had reached agreement to purchase the seventh-largest producer, Triton. Consolidation in the coal industry was helped considerably by the higher coal-lease limits that are now allowed on federal land, thanks to Myers' lobbying. Arch currently leases or has applied to lease nearly 40,000 acres of federal coal in Wyoming, while Triton has over 11,000 acres in that state. Arch's acquisition of Triton would not have been possible under the pre-2000 rules that limited federal coal leases in any one state to 46,080 acres.

The proposed deal has been controversial even in the coal industry. One anonymous source told trade publication Coal Week last year, "I'm afraid that Arch purchasing Triton is going to get us into that oligopoly situation -- and I just wonder if anybody's going to fight it and complain to the Justice Department." Covering the Arch-Triton deal, Platts Coal Outlook reported, "Many coal industry officials believe concentration of production would mean a shift in market power toward coal producers instead of consumers." And a major electricity company that purchases Wyoming coal has voiced its concern to the government over the possible impact on coal prices for its coal-based generating plants. Arch Coal has vowed to appeal the FTC action in court. The head of Arch counters that "we continue to believe that this acquisition is pro-competitive and would create tremendous efficiencies that would benefit our customers and ultimately consumers of electricity."

The deal received lengthy scrutiny at the Federal Trade Commission because of its anti-competitive implications. In announcing its 4-1 decision on Tuesday, the FTC found that "the acquisition would result in the top three competitors controlling 86 percent of 2003 coal production in (Wyoming's key coal fields) and would substantially increase the possibility of, and harm from, coordinated interaction by these major players ... (the FTC action) will protect electricity consumers from higher energy prices that would result from reduced competition in (Wyoming) coal, an important low-cost energy source for electric generators." Almost all of Wyoming's coal is used to produce electricity in the approximately 26 states where it is shipped.

The FTC review comes on the heels of a Justice Department investigation into possible anti-competitive practices in Wyoming coal production, an investigation reportedly triggered by allegations about Myers' lobbying clients Arch, Peabody and Kennecott. (The lobbying disclosure forms that Myers' law firm filed for these three coal producers also seem to indicate they were at least coordinating their political activities back then, as each indicates identical payments for different reporting periods in 1999 and 2000.)

Why would the Bush administration want to support Big Coal with a friendly judicial nominee who has been a lobbyist for the three largest U.S. coal producers? Bush White House political guru Karl Rove is no stranger to judicial politics. Rove, a former Texas tobacco lobbyist, ran the campaigns of several Texas Supreme Court judges, who must stand for election and raise money from special interests. The growing involvement of special interests in the election of state judges has been highly criticized by legal experts, and even Supreme Court justices Anthony Kennedy and Stephen Breyer have questioned the trend. Millions of dollars is being raised from the business community, as well as from trial lawyers and unions.

Last year, the Washington publication the Hill reported that Senate GOP conference chairman Rick Santorum, R-Penn., urged business lobbyists to get more involved in federal judicial nomination battles, stating, "It's one of the most fundamental issues we have." Business groups and Republican supporters have donated tens of thousands of secret dollars to the newly formed Committee for Justice, a partisan group headed by former Bush White House counsel C. Boyden Gray that has run ads attacking senators for opposing the administration's judicial nominees.

The coal companies that Myers lobbied for, and the coal industry in general, routinely give substantial campaign contributions to congressional Republicans and the Republican Party. Peabody and Arch gave over a million dollars to congressional candidates during the 2002 election cycle, most of it to Republicans. The coal industry regularly has cases before the federal courts. Peabody Coal, for example, has two cases currently before the 9th Circuit.

Although the Senate Judiciary Committee approved the Myers nomination, Democrats may block a vote by the full Senate. President Bush can still prevail, at least during 2004, if he takes the opportunity to place Myers on the 9th Circuit with a recess appointment that bypasses the need for full Senate confirmation. A Senate recess is scheduled for April.

Ann McArthur contributed research to this report.

About the writer: Dan Noyes is a reporter at the Center for Investigative Reporting. The Open Society Institute supports the Center's reporting on the federal judiciary.