FISA Court Judges Keep Buying Verizon Stock; Wonder What They Know...

from the foia-ftw dept

Lee Fang, over at Vice, has quite a revelation based on some FOIA requests. It seems that the various judges on the FISA Court who keep approving the NSA's requests for bulk data from the telcos... also seem to keep buying Verizon stock.

On May 28 last year, Judge James Zagel, a FISA Court member since 2008, purchased stock in Verizon. In June of this year, Zagel signed off on a government request to the FISA Court to renew the ongoing metadata collection program.

He's not the only one. We filed a request to the courts for the personal finance statements for all of the FISA Court judges. About a month ago, federal judges began turning in their disclosures, which cover the calendar year of 2013. The disclosures show that FISA Court Judge Susan Wright purchased Verizon stock valued at $15,000 or less on October 22. FISA Court Judge Dennis Saylor has owned Verizon stock, and last year collected a dividend of less than $1,000. The precise amount and value of each investment is unclear—like many government ethics disclosures, including those for federal lawmakers, investments amounts are revealed within certain ranges of value.

While this may not be a true sign of corruption, it at least raises some basic ethics questions. As Fang notes, ethics rules say that judges need to recuse themselves from cases where they have a financial stake in the outcome. But, it's not as clear cut, since the telcos aren't actually parties to the cases brought by the DOJ to the FISA Court (there are no other parties, generally, it's just the government). And even if there isn't anything fishy here, just the appearance of a potential bias seems problematic.
"I think prudence would suggest that a FISA judge would not acquire investments in these telecommunication stocks," says Professor William G. Ross, an expert on judicial ethics at Samford University's Cumberland School of Law in Alabama. "I'm not saying there is a conflict of interest, which my impression says there's probably not," Ross says, adding, "this is between what's improper and what's prudent."
And, indeed, there definitely appears to be a conflict of interest here. As you may recall, it's been reported that the telcos were given over $100 million for "volunteering" to hand over customer records. While that may be peanuts overall to a major telco's bottom line, it's not nothing.

Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Michael, Jul 29th, 2014 @ 5:50am

    Based on what we know from their rulings, I would not jump onboard any technology stock they seem to be interested in. Technology doesn't seem to be their 'thing'.

     

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  2.  
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    Groaker (profile), Jul 29th, 2014 @ 6:05am

    I have no fondness for the FISA court, and would love to nail them on just about anything they are guilty if. But the purchase of small amounts of Verizon stock may be unseemly and imprudent, but hardly de facto corruption.

    This stock is generally considered a safe retirement stock, and is often used for that purpose alone.

    Certainly from an economic viewpoint, I would be willing to make a long term investment in a stock with Verizon's situation. But I do not knowingly invest in stocks of companies that behave the way that Verizon does.

    I also agree with Michael @5:50. The FISA court's display of technical logic implies that the most profitable investments would be contrarian to that of the FISA court.

     

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  3.  
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    Josh in CharlotteNC (profile), Jul 29th, 2014 @ 6:31am

    Priorities

    $100 million for violating their customer's privacy, yet Verizon still can't afford a few dozen 10Gb router cards to help their customers get what they paid for so they can stream some movies.

     

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  4.  
    identicon
    Anonymous Coward, Jul 29th, 2014 @ 6:33am

    How is this disgusting so called "Court" not being disbanded yet?

     

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  5.  
    identicon
    Anonymous Coward, Jul 29th, 2014 @ 6:46am

    Re:

    While a minor issue, it is not completely irrelevant. Since there are economic interests at play, it is a thing where prudency is questionable. At the same time, this is a court where rulings are sealed. You need far more trust in these judges than normal judges because for normal judges, the results of their work can be scrutinized. A lack of prudency among the FISA judges is bad and it could warrent a further scrutiny of their potential conflict of interests, except that is going to be difficult to conduct...

     

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  6.  
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    Groaker (profile), Jul 29th, 2014 @ 7:31am

    The purchase of the stock is like going after the FISA court for attempted jaywalking, when we really should be impeaching them for destruction of the Constitution and Bill of Rights.

    And they should really suffer a more serious punishment for the damage that has been done to the nation, except that I don't think that falls within the legal framework (though it should.)

     

    reply to this | link to this | view in thread ]

  7.  
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    Michael, Jul 29th, 2014 @ 7:45am

    Re: Priorities

    Government Telco handouts come with a provision that the money never be used to actually help customers.

     

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  8.  
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    Anonymous Coward, Jul 29th, 2014 @ 7:45am

    Re:

    I hardly believe they are doing so under the powers of their own advice. They have an adviser whom may very well know better telling them to buy.

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Michael, Jul 29th, 2014 @ 7:46am

    Re:

    I'd be perfectly happy if they were convicted of copyright violation in Columbia.

     

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  10.  
    identicon
    Anonymous Coward, Jul 29th, 2014 @ 7:47am

    Re:

    Your permanently out to lunch Legislature does not believe courts should be struck down anymore... They seem to think they are operating at 100%.

    Courts being toppled used to be a natural way for them to be 'encouraged' to actually enforce law appropriately instead of corruptly.

     

    reply to this | link to this | view in thread ]

  11.  
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    Anonymous Coward, Jul 29th, 2014 @ 8:01am

    Re: Re: Priorities

    They might as well anyways

     

    reply to this | link to this | view in thread ]

  12.  
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    Groaker (profile), Jul 29th, 2014 @ 8:31am

    Both the Court System and the Legislative Branch have become pretty much meaningless. It is only within the last few weeks that the FBI got up and walked out of a Senate hearing because they did not like the questions they were asked. The committee should have had them arrested and put in the cells underneath the Congress for that purpose, but just nothing happened.

    The NSA has admitted to lying to SCOTUS. Again nothing happened.

    The visible executive branch probably doesn't run the show either, but more likely the "shadow government" that Cheney was so fond of talking about.

     

    reply to this | link to this | view in thread ]

  13.  
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    Berenerd (profile), Jul 29th, 2014 @ 9:00am

    Re: Re:

    And it used to be that politicians never got paid, they only got reimbursed for costs associating with office while in session. This kept the people actually wanting change, in office and not someone looking to sell out to the highest bidder

     

    reply to this | link to this | view in thread ]

  14.  
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    John Fenderson (profile), Jul 29th, 2014 @ 9:10am

    Re: Re: Re:

    True, but one of the main reasons why this changed was that politicians would abuse their position to earn extra money on the side. Things like bribery, etc. Yes, we have this problem with corruption now, but it's possible it would be even worse if politicians were unpaid volunteers.

     

    reply to this | link to this | view in thread ]

  15.  
    identicon
    Anonymous Coward, Jul 29th, 2014 @ 9:27am

    Ethics professor quoted by Techdirt: there's probably not a conflict of interest.

    Techdirt's summation: there definitely appears to be a conflict of interest.

     

    reply to this | link to this | view in thread ]

  16.  
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    John Fenderson (profile), Jul 29th, 2014 @ 9:38am

    Re:

    Yep, it's called "analysis and opinion". Inclusion of contrary perspectives is a good thing, not a bad thing.

     

    reply to this | link to this | view in thread ]

  17.  
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    Groaker (profile), Jul 29th, 2014 @ 9:59am

    Not true that politicians didn't normally get paid. That rumor was started by the behavior of George Washington. He was offered a salary, but said he would rather take expenses. He came out way ahead on the deal.

    There have been politicians who donated all or a portion of their salaries back to their level of government, but they were in the minority.

    There were also "dollar a year" men who were executives paid a normal salary by their corporations to assist in the efforts during WWI and WWII. There may have also been some during the '29 depression.

     

    reply to this | link to this | view in thread ]

  18.  
    identicon
    Anonymous Coward, Jul 29th, 2014 @ 10:11am

    Re: Re:

    Really? Quoting "probably not A" and then just stating "definitely appears to be A" counts as analysis in your book?

    Or is defending the authors here just a knee-jerk reaction? This is, at best, bad writing. More realistically (in my opinion) it shows the tendency to spin every article towards a certain pre-formed viewpoint.

     

    reply to this | link to this | view in thread ]

  19.  
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    John Fenderson (profile), Jul 29th, 2014 @ 10:29am

    Re: Re: Re:

    It counts as opinion. This is an opinion blog, after all. I'm not really defending Techdirt as such, I'm just pointing out that your criticism is a bit odd. If the article was attempting to be deceptive, it wouldn't have included a contrary perspective at all.

     

    reply to this | link to this | view in thread ]

  20.  
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    Groaker (profile), Jul 29th, 2014 @ 11:07am

    The FBI got away with that logic in bullet trace analysis for hundreds of cases. They basically claimed that if for A<>C, but if for some B=A and some B=C, then A=C and could be called a match in court.

    I recall that some three hundred cases had to be redone, but my memory on the number might be off.

     

    reply to this | link to this | view in thread ]

  21.  
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    OldMugwump (profile), Jul 29th, 2014 @ 11:08am

    New Hampshire

    New Hampshire state representatives are paid $100/year, plus mileage to and from Concord (the state capital).

    Not a notably corrupt place.

     

    reply to this | link to this | view in thread ]

  22.  
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    Kal Zekdor (profile), Jul 29th, 2014 @ 11:57am

    Re: Re: Re:

    "definitely appears to be a conflict of interest" != "there is a conflict of interest".

    The statement "And, indeed, there definitely appears to be a conflict of interest here." was in reference to "I think prudence would suggest that a FISA judge would not acquire investments in these telecommunication stocks," which was quoted logically following the statement "And even if there isn't anything fishy here, just the appearance of a potential bias seems problematic."

    In other words, Mike was saying that there definitely exists the appearance of a conflict of interest. Even if there is no actual conflict of interest, the semblance of one alone is a problem.

     

    reply to this | link to this | view in thread ]

  23.  
    identicon
    Anonymous Coward, Jul 29th, 2014 @ 2:49pm

    Re: Re: Re: Re:

    Yes, well, opinions are not all equally reasonable.

     

    reply to this | link to this | view in thread ]

  24.  
    icon
    John Fenderson (profile), Jul 29th, 2014 @ 2:59pm

    Re: Re: Re: Re: Re:

    Why not tell us why you find that opinion unreasonable?

     

    reply to this | link to this | view in thread ]

  25.  
    identicon
    Anonymous Coward, Jul 29th, 2014 @ 3:22pm

    Re: Re: Re: Re:

    I understand what you're saying, but I don't think it's a reasonable seque. I mean, to quote someone as saying "I don't think there's a conflict of interest" and then say there *definitely* appears to be one is, at the very least, an unexplained leap.

    It's like quoting someone saying "It doesn't look confusing to me" then stating there *definitely* is a likelihood of confusion. At least explain how you get from one to the other.

     

    reply to this | link to this | view in thread ]

  26.  
    identicon
    Anonymous Coward, Jul 29th, 2014 @ 3:24pm

    Re: Re: Re: Re: Re: Re:

    Because I fail to see any conflict, the article doesn't identify any conflict, the expert quoted says it looks like there's no conflict. On that background, I think it is unreasonable to say there *definitely* appears to be a conflict.

    Maybe it appears that way to a moron in a hurry.

     

    reply to this | link to this | view in thread ]

  27.  
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    Kal Zekdor (profile), Jul 29th, 2014 @ 3:58pm

    Re: Re: Re: Re: Re:

    It's a matter of public perception. While someone who is well versed in judicial ethics might be able to say that there's probably not a conflict of interest (which is not a particularly strong statement in itself), a layman's view would see the act in question as dubiously ethical.

    Your focus is on the wrong word. Don't read it as "there definitely appears to be a conflict of interest", read it as "there definitely appears to be a conflict of interest". It is easy to prove that there appears to be a conflict of interest:

    When I first heard about this story, I assumed there was a conflict of interest.

    After reading about it in more depth, it appears that the stock is merely an investment vehicle, and there may not be a conflict of interest.

    QED, there appears to be a conflict of interest until one looks closer.

    An action which would cause a non-trivial portion of the public to question the ethical standing of one who is a secret arbiter of ethical judgement is something which should be avoided. I.e., those that preside over secret courts need to be entirely above reproach, not merely technically avoiding a conflict of interest.

     

    reply to this | link to this | view in thread ]

  28.  
    icon
    John Fenderson (profile), Jul 29th, 2014 @ 5:02pm

    Re: Re: Re: Re: Re: Re: Re:

    I think that, as Kal so aptly explained, the appearance of a conflict of interest is pretty obvious. I suspect that it's only that -- an appearance -- because things look less shady when you peer closer. But the appearance is certainly there. I know you keep going to the expert, but the expert's opinion is completely irrelevant to the issue of appearances.

    I am curious, though... you seem to be quite emotional about this, given that it's a relatively minor article that makes no serious allegations. Why?

     

    reply to this | link to this | view in thread ]


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