[Senate Report 107-111]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 263
107th Congress                                                   Report
                                 SENATE
 1st Session                                                    107-111
_______________________________________________________________________



    MAKING PERMANENT THE AUTHORITY TO REDACT FINANCIAL DISCLOSURE 
        STATEMENTS OF JUDICIAL EMPLOYEES AND JUDICIAL OFFICERS

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                               H.R. 2336

    TO MAKE PERMANENT THE AUTHORITY TO REDACT FINANCIAL DISCLOSURE 
         STATEMENTS OF JUDICIAL EMPLOYEES AND JUDICIAL OFFICERS




                December 7, 2001.--Ordered to be printed
                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
99-010                     WASHINGTON : 2001

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 FRED THOMPSON, Tennessee
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
RICHARD J. DURBIN, Illinois          SUSAN M. COLLINS, Maine
ROBERT G. TORRICELLI, New Jersey     GEORGE V. VOINOVICH, Ohio
MAX CLELAND, Georgia                 PETE V. DOMENICI, New Mexico
THOMAS R. CARPER, Delaware           THAD COCHRAN, Mississippi
JEAN CARNAHAN, Missouri              ROBERT F. BENNETT, Utah
MARK DAYTON, Minnesota               JIM BUNNING, Kentucky
           Joyce A. Rechtschaffen, Staff Director and Counsel
                       Lawrence B. Novey, Counsel
         Hannah S. Sistare, Minority Staff Director and Counsel
                       Fred Ansell, Chief Counsel
                     Darla D. Cassell, Chief Clerk
                            C O N T E N T S

                              ----------                              
                                                                   Page
 I. Purpose and Summary...............................................1
II. Background and Need for Legislation...............................2
III.Legislative History...............................................6

IV. Regulatory Impact Statement.......................................6
 V. Congressional Budget Office Cost Estimate.........................7
VI. Changes to Existing Law...........................................7
                                                       Calendar No. 263
107th Congress                                                   Report
                                 SENATE
 1st Session                                                    107-111

======================================================================



 
     MAKING PERMANENT THE AUTHORITY TO REDACT FINANCIAL DISCLOSURE 
         STATEMENTS OF JUDICIAL EMPLOYEES AND JUDICIAL OFFICERS

                                _______
                                

                December 7, 2001.--Ordered to be printed

                                _______
                                

 Mr. Lieberman, from the Committee on Governmental Affairs, submitted 
                             the following

                              R E P O R T

                        [To accompany H.R. 2336]

    The Committee on Governmental Affairs, to which was 
referred the bill (H.R. 2336) to make permanent the authority 
to redact financial disclosure statements of judicial employees 
and judicial officers, having considered the same, reports 
favorably thereon and recommends that the bill do pass.
    When ordering the bill reported, the Committee agreed that 
Members would further evaluate the bill prior to Senate 
consideration. That further evaluation has occurred, and, based 
thereon, an amendment to the bill will be offered, and a 
recommendation will be made that the Senate adopt the amendment 
and pass the bill as so amended. The purpose of the amendment 
will be to extend the redaction authority for 4 years instead 
of making it permanent.

                         I. Purpose and Summary

    H.R. 2336 would make permanent the authority to redact 
financial disclosure statements filed by judges and other 
officers and employees of the federal judiciary when the 
Judicial Conference, in consultation with the United States 
Marshals Service, finds that revealing the information could 
endanger the filer. The bill would accomplish this by repealing 
section 105(b)(3)(E) of the Ethics in Government Act of 1978 (5 
U.S.C. app.), which now provides that the authority to redact 
shall expire on December 31, 2001.
    When ordering the bill reported, the Committee agreed that 
interested Members would further evaluate the bill before the 
bill would be considered by the Senate. Based on that further 
evaluation, an amendment to H.R. 2336 will be offered, and a 
recommendation will be made that the Senate adopt the amendment 
and pass the bill as so amended. As so amended, the bill would 
extend the authority to redact for an additional 4 years, until 
December 31, 2005.

                II. Background and Need for Legislation


                 A. EXISTING LAW AND ITS IMPLEMENTATION

    Under the Ethics in Government Act of 1978 (5 U.S.C. app.), 
judges and certain other officers and employees of the 
judiciary, like officers and employees in other branches of 
government, must file annual financial disclosure reports. 
However, considering the nature of the judicial function and 
the security risk it entails, the 105th Congress enacted 
section 7 of the ``Identity Theft and Assumption Deterrence Act 
of 1998'' (Public Law No. 105-318), adding a new subsection 
105(b)(3) to the Ethics in Government Act, which provides that 
the financial disclosure reports filed by judges and other 
judiciary personnel may be redacted before being made available 
to the public ``if a finding is made by the Judicial 
Conference, in consultation with the United States Marshals 
Service, that revealing personal and sensitive information 
could endanger that individual.'' 1
---------------------------------------------------------------------------
    \1\ This quotation omits an apparent typographical error in the 
United States Code, which refers to the ``United States Marshall 
Service.''
---------------------------------------------------------------------------
    The Judicial Conference has adopted regulations governing 
public access to financial disclosure reports filed by judges 
and other judicial employees under the Ethics in Government 
Act. Under these regulations, the Judicial Conference delegated 
to its Committee on Financial Disclosure the responsibility for 
implementing the financial disclosure requirements, and the 
regulations set forth the procedure by which members of the 
public may obtain access to the financial disclosure reports 
and by which decisions to redact the reports are made.
    The regulations restate a requirement, which is established 
generally under the Ethics in Government Act, that any request 
from a member of the public for access to a financial 
disclosure form must be in writing and must identify the 
requester and any other person on whose behalf the request is 
made. The regulations further provide that, when a request is 
received, the Committee will immediately notify the judge (or 
other employee who filed the requested report) and will send 
the judge (or other filer) a copy of the request.
    The judge (or other filer) may request redactions when 
filing the annual report, and may also request redactions upon 
receiving notification of a request from a member of the public 
for access to the report. In requesting a redaction, the filer 
must state specifically what material is sought to be redacted 
and provide detailed reasons justifying the redaction. The 
Committee on Financial Disclosure then determines, in 
consultation with the United States Marshals Service, whether 
the information sought to be redacted could endanger the filer 
and either grants or denies the request accordingly. A judge 
(or other filer) whose request for redaction is denied may 
appeal to a Special Redaction Review Panel of the Judicial 
Conference. The Committee may also redact information without a 
request if it receives evidence that release of information 
could endanger the filer. The regulations provide that the 
redaction is allowed to the extent necessary to protect the 
filer, and for as long as the reasons for redaction exist.
    The Administrative Office of the U.S. Courts provided to 
the Governmental Affairs Committee detailed information about 
the implementation of the redaction authority. In the calendar 
year 2000, financial disclosure reports were filed by 2357 
judges, of whom 179 requested redaction. Of these requests, 108 
were granted in full by the Committee on Financial Disclosure, 
32 were granted in part and denied in part, and 39 were denied 
in full. Sixteen judges appealed these decisions, and all 16 
appeals were denied.
    Of the 140 judges whose redaction requests were approved in 
full or in part, 59 judges' approved requests were based on 
specific threats such as high-threat trials, ongoing Marshals 
Service investigations, or continuing threats and financial 
harassment. For 81 judges, the approved redaction requests were 
based on what the Judicial Conference calls ``general 
threats,'' without a specific identified threat against the 
judge, but these ``general threat'' redactions applied only to 
information that would disclose the workplace, school, home, or 
other unsecured locations of judges or their family members.
    For the 140 judges whose reports were redacted during the 
year 2000, a total of 218 individual disclosure reports were 
partially redacted, and a total of 13 individual reports were 
totally redacted. In each instance where a report was redacted 
in its entirety, the Committee on Financial Disclosure had 
determined that the judge who filed the report or reports was 
subject to a specific, active security threat.

     B. Governmental Affairs Committee's Consideration of H.R. 2336

    As enacted in 1998, the provision of the Ethics in 
Government Act authorizing the judiciary to redact financial 
disclosure reports included an approximately three-year sunset 
clause, under which the authority will expire on December 31, 
2001, unless the authority is extended by Congress. H.R. 2336 
would strike the sunset clause, thereby making the redaction 
authority permanent. H.R. 2336 was introduced on June 27, 2001 
and passed the House of Representatives on October 16, 2001.
    The Governmental Affairs Committee considered the bill at 
its business meeting on November 14, 2001. At that meeting, no 
Committee Member spoke in opposition to favorably reporting the 
bill, but certain Members did express concerns. Senator 
Thompson noted that in some instances the redaction authority 
was used to avoid revealing stocks and other financial assets 
owned by judges, gifts in the form of trips taken by judges, 
and other gifts received by judges. This is a problem, he said, 
because financial assets and gifts can produce a conflict of 
interest. He stated that the redaction authority should not be 
used for financial assets or gifts of this kind and that he 
expects the Judicial Conference and the Administrative Office 
of the Courts to take notice of these concerns. Senator Bunning 
raised the point as to why authority to redact financial 
disclosure statements was only granted for judges and other 
officers and employees of the judiciary. He noted that U.S. 
Attorneys, Assistant U.S. Attorneys, and other federal 
personnel could be equally at risk from certain information in 
their financial disclosure statements. Redaction authority does 
not apply for them, and Senator Bunning raised the issue as to 
whether or not redaction authority should apply for those and 
other federal personnel.
    The Committee decided to report the bill favorably to the 
Senate, but, in light of the concerns expressed, the Committee 
agreed that Members would have an opportunity to further 
evaluate the legislation and to resolve any doubts before the 
bill would be considered on the Senate floor. The Committee 
proceeded to convene a meeting with a representative of the 
Administrative Office of the Courts, to obtain additional 
information about the Judicial Conference's implementation of 
the redaction authority and to discuss the concerns that had 
been expressed about that implementation.
    The information considered by the Committee indicates that 
the judiciary's current implementation of the redaction 
authority is prudent and responsible overall. However, to 
address specific concerns raised by certain Committee Members, 
the following steps are being taken. An amendment to H.R. 2336 
will be offered, and a recommendation will be made that the 
Senate adopt the amendment and pass the bill as so amended, to 
extend the redaction authority for 4 years, until December 31, 
2005, rather than now making the authority permanent. This 4-
year sunset period will give the Committee or interested 
Members an opportunity to inquire further into specific areas 
of concern regarding the implementation of the redaction 
authority, to evaluate any responses by the judiciary to these 
concerns, and to consider whether any legislative changes to 
the redaction authority are necessary.2 This will 
also provide an opportunity to look into whether the redaction 
authority, which is an exception to the generally applicable 
provisions of the Ethics in Government Act, should apply only 
to the judiciary, as it does now, or whether the authority 
should also apply to U.S. Attorneys or others outside of the 
judicial branch.
---------------------------------------------------------------------------
    \2\ A representative of the Administrative Office of the U.S. 
Courts also advised the Committee that copies of the annual reports 
required by section 105(b)(3)(C) of the Ethics in Government Act will 
in the future be sent to the Committee.
---------------------------------------------------------------------------
    Although the judiciary has generally exercised the 
redaction authority well, the Committee has some specific 
concerns about certain ways in which the redaction authority 
has been used since it was enacted three years ago with a 
three-year sunset. The Committee hopes that the judiciary will 
examine whether any of the Committee's observations might 
warrant changes in the operative regulations.
    The Committee understands that, although the redaction 
authority has not been used often to withhold a judge's entire 
financial disclosure report, such complete withholding has, 
upon the recommendation of the United States Marshals Service, 
occurred on occasion. The Committee believes that the intent of 
the legislation is to authorize withholding only that specific 
information that could endanger judges. Even if the information 
in one section of a report must be redacted, it may be safe to 
release another section of the report that either contains 
information posing no danger or that is blank because the judge 
had nothing relevant to disclose. The Committee questions 
whether it would ever be necessary to withhold every part of a 
judge'sreport. The Committee has shared this view with the 
Administrative Office of the U.S. Courts, which has indicated that the 
judiciary plans to use redaction authority in the future with a 
careful, section-by-section review and decision so that only the 
information that could endanger the filer would be redacted from a 
disclosure report. The Committee appreciates that position and hopes 
that the Judicial Conference will consider modifying its regulations to 
clarify its intent in that regard.
    The Committee also believes that the judiciary might desire 
to review its practices with respect to the redaction of 
financial assets. A judge's financial assets can potentially 
create a conflict of interest. Redaction of those assets could 
therefore prevent the public from learning that a conflict was 
present in a case. On the other hand, under some circumstances, 
disclosing financial assets might enable a hostile person to 
learn a judge's home address or might otherwise pose a danger. 
But there may be ways to maintain judicial safety through ways 
other than redacting the holdings. For instance, it may be 
worth considering whether holding assets in a brokerage account 
in ``street name,'' 3 or using a mailing address 
other than the judge's home address in connection with 
ownership of the assets, might eliminate danger that might 
otherwise arise from publicly identifying the assets. The 
judiciary might consider whether, if measures like these were 
used, redaction of financial assets might be unnecessary.
---------------------------------------------------------------------------
    \3\ Holding securities in ``street name'' means that the broker 
holds the securities in its name or in the name of another nominee, 
rather than the securities being held in the name of the real, or 
``beneficial,'' owner.
---------------------------------------------------------------------------
    Additionally, some redactions have been made with respect 
to reimbursement for travel to various conferences. The 
Committee has some difficulty understanding why this redaction 
has occurred, and has communicated its reservations to the 
Administrative Office of the U.S. Courts. Although a judge 
could be harmed by someone learning that a judge was attending 
a conference as it was occurring, the judge would have long 
since left that location by the time the reimbursement of the 
expense was reported. The Administrative Office has advised 
that no judge has asked that reimbursed travel be redacted, but 
that such items have been redacted in several occasions where 
the financial disclosure report was redacted in its entirety. 
(Concerns about some reports having being redacted in their 
entirety were discussed above.) Especially in light of the fact 
that a number of reimbursements have inadvertently not been 
reported at all, the Committee suggests that the judiciary 
review its policies for redacting information of that type, and 
consider whether to strengthen its enforcement or other 
compliance policies for assuring that judges comply with the 
legal obligation to disclose reimbursed travel.
    In considering the rationale for the redaction authority, 
the Committee understands that the need to reveal information 
that can potentially create a conflict of interest may be 
outweighed when disclosing the information might reveal the 
location of a judge or family member at an insecure location or 
might otherwise endanger the individual physically. But, in 
extending the program, the Committee believes that where the 
reason stops, so should the rule. Thus, redactions made not to 
protect a judge from a threat to his or her person, but to stop 
false liens from being placed on a piece of property or to 
prevent ``theft of identity,'' may not fit within the rationale 
for the redaction authority. The Committee believes that the 
judiciary might want to review its use of the redaction 
authority in this context. The judiciary might also want to 
evaluate whether decisions to grant waivers to disclosure 
should be made public.
    The Committee believes that the judiciary is undertaking 
strong efforts to ensure that assets and reimbursements are 
disclosed, but recognizes that public confidence in that 
process is necessary even if all information required to be 
disclosed is in fact disclosed. This is true for redacted 
information as well. Ultimately, a well-functioning redacting 
process is in the interest of both the judiciary and the 
public. The Committee believes that the Judicial Conference has 
been conscientious in its review of judicial requests for 
individualized redactions, and appreciates that appeals of 
rulings adverse to individual judges have not been granted when 
the Conference believes they are not warranted.
    These suggestions are offered in an effort to be helpful, 
rather than critical. The judiciary can determine for itself 
which, if any, it might choose to consider. The Committee 
appreciates the reactions it has received to some of these 
ideas from the Administrative Office of the U.S. Courts, and 
looks forward to further reviewing the operation of the 
program.

                        III. Legislative History

    H.R. 2336 was introduced on June 27, 2001, by Congressman 
Coble, for himself and Congressman Berman, and was referred to 
the House Committee on the Judiciary. No hearings were held, 
and on October 2, 2001, the House Judiciary Committee ordered 
the bill favorably reported by voice vote. The bill was then 
considered in the House on October 16, 2001, under suspension 
of the rules and passed by voice vote.
    In the Senate, H.R. 2336 was referred to the Committee on 
Governmental Affairs. No hearings were held on the legislation. 
H.R. 2336 was considered by the Committee at its business 
meeting on November 14, 2001, and was ordered reported 
favorably, without amendment, by voice vote. When ordering the 
bill reported, the Committee agreed that Members would further 
evaluate the bill before the bill would be considered by the 
Senate. Committee members present were Senators Akaka, Durbin, 
Cleland, Carper, Carnahan, Thompson, Voinovich, Cochran, 
Bunning, and Lieberman.
    Based on that further evaluation, it was decided that an 
amendment to H.R. 2336 will be offered, and a recommendation 
will be made that the Senate adopt the amendment and pass the 
bill as so amended. As so amended, the bill would not make the 
redaction authority permanent, but would instead extend the 
authority for 4 years, until December 31, 2005.

                    IV. Regulatory Impact Statement

    Paragraph 11(b)(1) of rule XXVI of the Standing Rules of 
the Senate requires that each report accompanying a bill 
evaluate the ``regulatory impact which would be incurred in 
carrying out this bill.'' Carrying out H.R. 2336 would have no 
regulatory impact.

              V. Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, November 19, 2001.
Hon. Joseph I. Lieberman,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2336, a bill to 
make permanent the authority to redact financial disclosure 
statements of judicial employees and judicial officers.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lanette J. 
Walker.
            Sincerely,
                                           Steven Lieberman
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 2336--A bill to make permanent the authority to redact financial 
        disclosure statements of judicial employees and judicial 
        officers.

    H.R. 2336 would repeal the sunset provision in the Ethics 
in Government Act of 1978 relating to the authority of certain 
judicial employees and judicial officers to revise their 
financial disclosure statements. CBO estimates that 
implementing H.R. 2336 would have no significant impact on the 
federal budget. The bill would not affect direct spending or 
receipts; therefore, pay-as-you-go procedures do not apply. 
H.R. 2336 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    On October 12, 2001, CBO transmitted a cost estimate for 
H.R. 2336 as ordered reported by the House Committee on the 
Judiciary on October 3, 2001. The two versions of the 
legislation and our cost estimates are identical.
    The CBO staff contact for this estimate is Lanette 
J.Walker. This estimate was approved by Peter H. Fontaine, 
Deputy Assistant Director for Budget Analysis.

                      VI. Changes to Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
H.R. 2336, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in brackets, new matter is 
printed in italic, and existing law in which no change is 
proposed is shown in roman):

                           UNITED STATES CODE

            TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES

           *       *       *       *       *       *       *


                           TITLE 5--APPENDIX

                    ETHICS IN GOVERNMENT ACT OF 1978

TITLE I--FINANCIAL DISCLOSURE REQUIREMENTS OF FEDERAL PERSONNEL

           *       *       *       *       *       *       *


Sec. 105. Custody of and public access to reports

           *       *       *       *       *       *       *


    (b)(1) *  *  *

           *       *       *       *       *       *       *

    (3)(A) *  *  *

           *       *       *       *       *       *       *

    [(E) This paragraph shall expire on December 31, 2001, and 
apply to filings through calendar year 2001.]

                                  
