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The Arkansas Judicial Ethics Advisory Committee issued an advisory opinion stating that a judge may serve on a bank's advisory board, that the judge's ownership of approximately 2% of the voting stock of the bank constitutes a financial interest that requires disqualification in all cases in which the bank is a party, and that the judge should consider divesting the stock and resigning from the board if frequent disqualification is required. The Committee also advised that the judge must disqualify himself from cases filed or tried by his brother-in-law, the city attorney, and must not issue warrants at the request of his brother, the deputy prosecuting attorney. The Committee also advised that the judge is not precluded from appointing his wife as an unpaid deputy clerk but that it would be better not to do so, although she could still occasionally do general secretarial or administrative work. The committee stated that if the judge still considers appointing his wife as a clerk, he should do so only if she is qualified, the position is a deputy position, the position is temporary and part-time, the appointment is on a volunteer and philanthropic basis with no perceived present or future financial benefits (either direct or fringe) to the relative or the judge, and the volunteer service provided by a relative is not considered with respect to increases in the judge's salary. In response to a question about what financial reports judges must file, the Committee stated that the request was not made in accordance with Procedural Rule 3 because it was not accompanied by a concise memorandum setting forth the judge's own research and conclusion.


 

November 22, 1991

 

 

The Honorable Paul X. Williams, Jr.
Municipal Judge
Booneville Municipal Court
Logan County Courthouse
Booneville, Arkansas 72927

RE: Advisory Opinion # 91-04 (2)

Dear Judge Williams:

In response to your request dated September 25, 1991 for a Judicial Ethics Advisory Opinion, we submit the following:

1. May a judge serve on a bank's advisory board?

Arkansas was one of the thirteen states which adopted the least restrictive version of Canon 5 C(2) of the Code of Judicial Conduct. Accordingly, there is no provision in the present Code which would specifically prohibit a judge from serving on a bank=s board or advisory board. Canon 5 C(1) provides that AA judge should refrain from financial and business dealings that tend to reflect adversely on his impartiality, interfere with the proper performance of his judicial duties, exploit his judicial position, or involve him in frequent transactions with lawyers or persons likely to come before the court on which he serves@. The Arkansas version of Canon 5 C(2) provides that ASubject to the requirement of subsection (1), a judge may hold and manage investments, including real estate, and engage in other remunerative activity including the operation of a business?. Canon 5 C(3) provides that AA judge should manage his investments and other financial interests to minimize the number of cases in which he is disqualified. As soon as he can do so without serious financial detriment, he should divest himself of investments and other financial interest that might require frequent disqualification@. We were submitted no specific information as to the impact your service on this advisory board might have with respect to these provisions. Under the present Code you may serve on a bank=s advisory board so long as you comply with the above and all other provisions of the Code. In your request for an opinion, you stated that you owned approximately 2% of the total voting stock of the bank. This ownership constitutes a Afinancial interest@ as defined in Canon 3 C(3)(c) and you must disqualify in all cases in which the bank is a party to the proceedings. You should also consider divesting the stock and resignation from the advisory board should this require frequent disqualification.

You may wish to consider that membership on the bank=s advisory board is prohibited by Canon 4 D(3) of the proposed Arkansas Code of Judicial Conduct now pending before the Arkansas Supreme Court unless you qualify as a Acontinuing part-time judge@ as defined in that Code. In making your decision, you are also cautioned to consider Canon 2 B which states in part: AHe should not lend the prestige of his office to advance the private interests of others.

2. May your brother-in-law, the elected City Attorney, file and try cases in the Booneville Municipal Court of which you are the elected Judge?

Your brother-in-law as the elected City Attorney certainly can file and try cases in this court. The real issue however is whether you should disqualify yourself. Canon 3 C(1) of the Code of Judicial Conduct provides AA judge should disqualify himself in a proceeding in which his impartiality might reasonably be questioned, including but not limited to instances where=. . . .(d) he or his spouse, or a person within the third degree of relationship to either of them, or the spouse of such a person=. . . .(ii) is acting as a lawyer in the proceeding (iii) is known by the judge to have an interest that could be substantially affected by the outcome of the proceeding;@. While we are sensitive to the fact that significant inconvenience may ensue, particularly in thinly populated areas of the state, it is clear that the Code requires that you disqualify in all cases filed or tried for or on behalf of the City Attorney. In addition to the Arkansas Code of Judicial Conduct there is a body of Arkansas case law which should be studied. Consider for instance Braswell v. Gehl, 263 Ark. 70, 567 S.W. 2d 113 (1978). See also Brill, Howard W., Arkansas Professional and Judicial Ethics, Second Edition, M & M Press (1991). We recommend also that you review Canon 3 D, Remittal of Disqualification.

3. May your brother, who is the Deputy Prosecuting Attorney, present to you affidavits for warrants of arrest and transmit criminal information with the affidavits for the issuance of warrants even though he will not try the cases?

The issuance of warrants is a very important part of the criminal law process and you should not issue such for your brother. Based on the reasoning and authorities set forth under Question 2 above, we are of the opinion that you should disqualify in all matters handled by your brother.

4. May you appoint your wife as an unpaid deputy clerk in order that she may voluntarily handle the paid clerk=s duties in his or her absence?

Canon 3 B(4) of the Code of Judicial Conduct was recently amended by the Arkansas Supreme Court by Per Curiam Order dated November 19, 1990 to provide as follows: AA judge should not make unnecessary appointments. A judge should exercise his power of appointment only on the basis of merit, avoiding nepotism and favoritism. No judge shall employ a spouse or other relative unless it has been affirmatively demonstrated to the Arkansas Judicial Discipline and Disability Commission that it is impossible for the judge to hire any other qualified person to fill the position. A judge should no approve compensation of appointees beyond the fair value of services rendered@. This change reflected the Supreme Court=s concern that the appointments of close relatives to position do case doubt on the integrity and impartiality of the judiciary.

On November 15, 1991, the Judicial Discipline and Disability Commission considered a number of complaints wherein a judge=s spouse or mother regularly performed an number of clerical functions for the judge as a volunteer and while in a non-pay status after July 1, 1991. In all of these instances the complaints were dismissed because such relative worked for the judge as a volunteer and in a non-pay status. These cases concerned persons who previously had been paid for the same work.

Because of this recent ruling by the Judicial Discipline and Disability Commission, the need for judicial staff assistance and your apparent sincere and altruistic motives, we have struggled with this part of our opinion. We are unable to opine that you are precluded from appointing your wife as a deputy. However, we believe that the best approach is to avoid even the appearance of impropriety and, accordingly you should not appoint your wife as a deputy clerk even if she is not compensated. She would still be able to assist occasionally by doing general secretarial or administrative work.

Should you still consider appointing your wife as a volunteer deputy clerk, you should not do so unless each of the following questions can be answered in the affirmative:

a) Is the relative qualified for the position?

b) Is the position a deputy position?

c) Is the position a temporary and part-time position?

d) Is the appointment on a volunteer and philanthropic basis with no perceived present or future financial (either direct or fringe) benefits to the relative or to the judge?

Such volunteer work or service provided by a relative should never be persuasive, or even considered with respect to future increases in the salary of the judge.

5. What financial reports are due under Canon 6 of the Code of Judicial Conduct?

This request was not made in accordance with our Procedural Rule 3 in that it was not accompanied by a concise memorandum setting forth your own research and conclusions. Canon 6 is not very long and you can read it just as easily as we can. You are reminded that Part-time judges are exempted from Canon 6 C. We also invite your attention to the fact that there are other filings which are required of judges and the Administrative Office of the Courts is available to assist judges in this regard and to supply blank forms.

 

Very truly yours,

 

Bruce K. Bullion, Chair

 

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