Federal Judiciary: The Administrative Office of the U.S. Courts Should Ensure Financial Disclosure Redaction Reports Are Submitted to Congress Annually
Released: 2018-05-31T00:00:00

Letter

Background

Purpose and Structure of the Judicial Conference and AOUSC

The Judicial Conference of the United States is the national policy-making body of the federal courts. The Chief Justice of the United States is the presiding officer of the Judicial Conference. The Conference operates through a network of 20 committees, including the Committee on Financial Disclosure. The Judicial Conference delegated authority to redact information from a financial disclosure report to the Committee on Financial Disclosure. Upon request from a judicial official, the committee, in consultation with the USMS, redacts the information when it decides that revealing such personal or sensitive information could endanger the judicial official or a member of his or her family. Responsibilities of the Committee on Financial Disclosure include reviewing reports filed, adjudicating requests for redactions of information from the report, approving and modifying reporting forms and instructions, and monitoring the release of reports to ensure compliance with statute and the committee’s guidance. The Judicial Conference of the United States is responsible for implementing the judiciary’s redaction authority in a manner that provides judicial officials with the intended security measures without compromising timely public access to judicial officials’ financial disclosure reports.

AOUSC is the agency within the judicial branch that provides a broad range of legislative, legal, financial, technology, management, administrative, and program support services to federal courts. It is responsible for carrying out Judicial Conference policies, and one of its primary responsibilities is to provide staff support and counsel to the Judicial Conference and its committees, including the Committee on Financial Disclosure. The Director of AOUSC serves as the Secretary to the Judicial Conference and is an ex officio member of the Executive Committee.

Legislative Basis for Filing Financial Disclosure Reports

The Ethics in Government Act of 1978, as amended, requires specified judicial, legislative, and executive branch officials to file annual financial disclosure reports in the spring of each year. These reports include financial information for the previous calendar year. Financial disclosure reports are made up of nine parts—positions, agreements, non- investment income, reimbursements, gifts, liabilities, investments and trusts, explanatory comments, and certification and signature. (See appendix I for a copy of a blank annual financial disclosure report).

In addition to filing an annual report, covered judicial officials are required to file financial disclosure reports when nominated (nomination report); within 30 days of taking office (initial report); and within 30 days of leaving their position (final report)—see table 1.

Federal law also requires that copies of judicial officials’ financial disclosure reports be made available, upon written request, to members of the public. Judicial officials may request that certain information be redacted before their financial disclosure reports are sent to the requesting individuals.

Legislative Basis for Judicial Redaction Authority

The judiciary’s authority to redact information from financial disclosure reports was established in 1998 and was initially authorized for a 3-year period. That legislation also instituted an annual congressional reporting requirement for the judiciary on the operation of the redaction authority. Over the past 20 years, the judiciary’s redaction authority and reporting requirement have been successively reauthorized for various periods of time, but have lapsed on occasion. The authority was most recently reauthorized on March 23, 2018 through the end of 2027.

According to AOUSC officials, while the redaction authority lapsed, the Committee on Financial Disclosure did not grant any new redaction requests, but it did grant requests to continue redactions that were approved prior to December 31, 2017.

The Judiciary’s Process for Adjudicating Redaction Requests and Responding to Requests for Copies of Financial Disclosure Reports

The Judicial Conference, through its Committee on Financial Disclosure, has developed a multistep process for reviewing federal judges’ requests for redactions of information from their financial disclosure reports and requests for copies of these reports, as shown in figure 1. While the committee encourages judicial officials to request redactions at the time they file their financial disclosure reports, AOUSC officials stated that most redaction requests were made after judicial officials were notified that copies of their reports had been requested.

A judicial official may request a redaction of information when his or her financial disclosure report is filed or after receiving a notification of a request for a copy of his or her financial disclosure report. When requesting a redaction, the judicial official must state specifically what information is sought to be redacted and the justification for the redaction. The Committee on Financial Disclosure will determine, in consultation with the USMS, if the information could endanger the judicial official or an immediate family member. For redaction requests involving information pertaining to the unsecured location of (1) a spouse’s employer, (2) a child’s school, or (3) a primary or secondary residence, a separate security consultation is not required based on an agreement AOUSC reached with the USMS memorialized in a 2004 letter that, in essence, serves as a security consultation. For all other types of information requested to be redacted, a further USMS security consultation is required.

Taking into account the information provided by the judicial officials, as well as results from the USMS security consultations, members of the Subcommittee on Public Access and Security, a subcommittee under the Committee on Financial Disclosure, decide—by majority vote—to either grant (in whole or in part) or deny each redaction request. Such redactions are good until the end of the calendar year in which they are granted. The Committee on Financial Disclosure notifies the judicial official if the information requested to be redacted has been granted, granted in part, or denied. Judicial officials can appeal a redaction decision; however, according to AOUSC officials, there were no appeals from 2012 through 2016, the time period covered by our review.

The Judicial Conference Has Developed Procedures to Ensure Judicial Officials File Financial Disclosure Reports, and More Than 4,000 Reports Are Filed Annually

The Judicial Conference’s Committee on Financial Disclosure has developed an electronic report filing system, written guidance, and a compliance process to help ensure judicial officials file their financial disclosure reports. Specifically, in 2011, AOUSC switched from having judicial officials file financial disclosure reports in hard copy to electronic filing through an online electronic depository, Financial Disclosure Online Filing System (FiDO). AOUSC also uses a separate internal electronic database (LEGO) to track compliance with financial disclosure report filings. LEGO contains the entire database of judicial filers, including what reports should be filed, the dates financial disclosure reports are due, and which are in process. The Committee on Financial Disclosure stated in September 2014 that FiDO had been upgraded, but committee members continued to experience limitations with the system. For example, according to AOUSC officials, FiDO does not keep track of which reports are in process or when they are due. Accordingly, the committee members authorized an assessment to look for an alternative system that would meet their needs and, by 2016, had selected software currently being used by the government to be customized for the judiciary. According to AOUSC officials, the plan is for the Judiciary Electronic Filing System (JEFS) to replace both FiDO and LEGO and be used for filing financial disclosure reports and tracking compliance with filing requirements beginning in 2019.

The Committee on Financial Disclosure also provides guidance to judicial officials to ensure that financial disclosure reports are filed correctly. The types of guidance provided include the Guide to Judiciary Policy, Filing Instructions for Judicial Officers and Employees, and a Step by Step Guide for the Preparation and Electronic Filing of Financial Disclosure Reports. Additionally, members of the Committee on Financial Disclosure are to review each filed financial disclosure report to confirm that required items have been sufficiently reported and that the filer is in compliance with applicable laws and regulations. In addition, for some sections, members of the committee will compare information provided in a filed report with what was reported in a prior year’s report to ensure the information reported is accurate and consistent.

The Committee on Financial Disclosure also provides guidance on the process to be followed if a judicial official fails to file a required financial disclosure report. Specifically, the Guide to Judiciary Policy states that a late filing fee of $200 will be assessed if a report is filed more than 30 days after the report is due. Further, the Chairman of the Committee on Financial Disclosure is to write a letter to any noncompliant filer.

In addition to the guidance described above, in 2013, the Committee on Financial Disclosure reported that it would establish specific procedures for securing filer compliance with all reporting requirements and the late filing assessments. In 2014, the Committee reported on the successful implementation of these new policies. Part of this effort included developing templates for three successive communications that are to be provided to a noncompliant filer. The communications reflect a progressively increasing level of urgency in language and content, culminating in explicit warnings that if a noncompliant filer does not comply, the matter can be referred to the Attorney General.

From calendar years 2012 through 2016, more than 4,000 financial disclosure reports were required to be filed each year by judicial officials, as shown in table 2. Most of the reports filed were annual reports.

According to AOUSC officials, as of March 2018, all annual financial disclosure reports required to be filed from calendar years 2012 through 2016 were filed, except for one for calendar year 2015. Additionally, all nominee and initial financial disclosure reports required to be filed during this time period were filed, and all but one final financial disclosure report, for calendar year 2016, were filed. The AOUSC officials stated that the remaining final report is still pending and the compliance process is being followed to ensure the report will be filed.

The Judiciary is Complying with Procedures for Responding to Requests for Financial Disclosure Reports and the Number of Reports Released Has Varied from 2012 through 2016

The judiciary is complying with the Judicial Conference’s Guide to Judiciary Policy (Volume 2, Part D, Chapters 3-4), which sets forth the process for releasing financial disclosure reports. First, members of the public may request financial disclosure reports by submitting Form AO 10A (see appendix II for a blank copy of the Form AO 10A). The Committee on Financial Disclosure notifies the judicial official that a Form AO 10A has been received and provides the official with a copy. At that time, the judicial official has up to 10 days to decide whether or not to request that information from the financial disclosure report be redacted. Once the members of the Subcommittee on Public Access and Security have reviewed any redaction requests and any accompanying USMS security consultation results, the members vote on whether or not to grant redactions and then forward the results to AOUSC staff for final processing. In March 2017, the Judicial Conference approved the release of financial disclosure reports by electronic storage device free of charge in order to expedite the release of requested reports. As a result, once AOUSC staff receive the redaction decisions from the Subcommittee, AOUSC staff are to ensure that approved redactions are made to the financial disclosure reports, and then download the reports to electronic storage devices to mail to the requesting parties.

The AOUSC received, on average, about 70 requests for copies of judicial officials’ financial disclosure reports each year from calendar years 2012 through 2016 using the AO 10A request form. The form can include a request for the financial disclosure report of one judicial official, or for multiple judicial officials. Additionally, the form could include a request for multiple years of financial disclosure reports. Based on the AO Form 10As received from calendar years 2012 through 2016, AOUSC released approximately 16,000 financial disclosure reports. The number of financial disclosure reports released each year varied during this time period, as shown in table 3.

According to AOUSC officials, the number of financial disclosure reports released each year varies based on the number of requests received and the time of year the requests are submitted. For example, a requester might submit a Form AO 10A late in the calendar year and the requested reports could be released the following calendar year based on how long it takes to process the request. AOUSC officials noted that there are two organizations that have requested copies of the financial disclosure reports for all federal judges every year. In 2016 AOUSC received the requests late in the year and, therefore, were not able to release the reports until 2017.

Few Judicial Officials Requested Redactions and They Pertained Mostly to the Unsecured Location of Family Members, but the Judiciary Has Not Reported Redaction Results to Congress in a Timely Manner

On Average, 3.2 Percent of Judicial Officials Requested Redactions from 2012 through 2016

The number of judicial officials who requested redactions represents a small percentage of the total number of financial disclosure reports filed in recent years. As shown in table 4, the number of redaction requests ranged from a low of 112 in 2014 to a high of 162 in 2012 and 2015.

For calendar years 2012 through 2016, there were a total of 716 requests for redaction of information from judicial officials’ financial disclosure reports—711 from judges and 5 from judicial employees—with a yearly average of about 143 redaction requests. In particular, for calendar years 2012 through 2016, judicial officials’ redaction requests accounted for, on average, 3.2 percent of the total financial disclosure reports filed during this time period, as shown in table 5. When we segregated the results by judges and judicial employees, we found that, on average, 5.8 percent of judges requested redactions compared to 0.1 percent of judicial employees over the 5 year time period.

Of the 3.2 percent of financial disclosure reports that included redaction requests made from 2012 through 2016, on average, about 85 percent were granted, 3 percent were partially granted, and 12 percent were denied, as seen in figure 2.

Most Redaction Requests Pertained to the Unsecured Location of a Judicial Official or Immediate Family Member

We analyzed AOUSC data on redaction requests made from calendar years 2012 through 2016 by type of information requested to be redacted and found that the majority (about 76 percent) of the requested redactions pertained to information related to the unsecured location of a judicial official or an immediate family member. The next biggest category of information requested to be redacted was the “other” category, with 10.4 percent. Three categories—asset value, gifts, and reimbursement—each accounted for less than 1 percent of the redaction requests, as shown in Figure 3.

AOUSC Has Not Submitted Required Annual Redaction Reports to Congress in a Timely Manner

We requested copies of the annual redaction reports submitted to Congress for calendar years 2012 through 2016 and determined that AOUSC had not submitted the annual redaction reports to congressional committees of jurisdiction in a timely manner. Specifically, we found that AOUSC submitted the annual report covering 2012 in May 2014 and submitted four annual reports (for calendar years 2013 through 2016) in February and August of 2017, as shown in table 6. For the 2013 and 2014 annual reports, AOUSC prepared and submitted them to the congressional committees of jurisdiction after we asked for them.

AOUSC officials told us that they could not find evidence that they had submitted the annual reports for calendar years 2013 and 2014 to the committees of jurisdiction in a timely manner. However, AOUSC staff sent a 5-year report to congressional committees of jurisdiction in March 2017 that included information on redaction requests and results for calendar years 2012 through 2016. Thus, the congressional committees of jurisdiction had received no reports from AOUSC on redaction requests and results from May 2014 to February 2017. While the Ethics in Government Act of 1978, as amended, does not set a specific submission date, it requires that AOUSC submit an annual report (i.e., occurring once every year) to congressional committees of jurisdiction on the operation of the judiciary’s redaction authority. As shown in table 8 above, AOUSC did not submit an annual report every year, and there was an interval of almost three years (from May 2014 to February 2017) in which there is no record of AOUSC providing any annual redaction reports to Congress.

AOUSC officials stated that although there are no reporting time frames specified in legislation for preparing and submitting the reports to the congressional committees of jurisdiction (other than annual submission), beginning in 2016, AOUSC staff began to work on preparing the redaction report for the previous year by February of the following year. The AOUSC officials acknowledged, though, that they have not implemented a formal process, with designated steps and time frames, to ensure they consistently produce the annual redaction reports in a timely manner. The AOUSC officials also stated that since 2013, the Financial Disclosure Office—the office responsible for preparing the reports—had experienced a series of changes in management, as well as staff turnover in key positions, which contributed to the inconsistent process for developing and completing the annual redaction reports in a timely manner. Given that AOUSC experienced staff turnover in the past, and could experience it in the future, it is important that AOUSC has the necessary controls in place to overcome staffing issues and ensure that it consistently prepares and submits the annual redaction reports to the committees in a timely manner.

Standards for Internal Control in the Federal Government state that management should implement control activities by documenting responsibilities through policies for each unit. With guidance from management, each unit determines the policies necessary to achieve the desired objectives. Management should also define objectives in specific terms so they are understood at all levels. This involves clearly defining what is to be achieved, who is to achieve it, how it will be achieved, and the time frames for achievement. AOUSC officials stated that the annual reports cannot be compiled until after the close of the previous calendar year and after all data have been reviewed. While this is true, without a formal process for ensuring that staff complete the reports in a timely manner, there are no assurances that the process will consistently occur on a regular schedule, or at all. Implementing a more formal process, with specified steps and time frames, would ensure staff are fully informed of their responsibilities and allow AOUSC to be better positioned to provide the congressional committees of jurisdiction with timely redaction reports that can be used to conduct oversight of the federal judiciary’s use of its redaction authority.

Conclusions

The Ethics in Government Act of 1978, as amended, serves the public interest by providing access to selected information from financial disclosure reports filed by judicial officials that could represent conflicts of interest for these officials. At the same time, the law accounts for the security threats faced by judicial officials and grants the judiciary authority to redact personal and sensitive information from their financial disclosure reports if a finding is made that the release of the information could endanger these officials or members of their families. Thus, the Judicial Conference has a responsibility to balance the goals of safeguarding judicial officials’ information and providing timely public access. The Judicial Conference developed a compliance process to ensure judicial officials were filing financial disclosure reports that adhere to applicable laws and regulations, and also had procedures in place to ensure the public had access to copies of judicial officials’ financial disclosure reports when requested. While the Ethics in Government Act of 1978, as amended, provides the Judicial Conference with authority to redact information that could pose a security threat to judicial officials, this authority has been used sparingly. From 2012 through 2016, about 3.2 percent of financial disclosure reports included a redaction request and about 85 percent of those were approved. Nevertheless, the law requires AOUSC to submit an annual report to congressional committees of jurisdiction on the operation of the judiciary’s redaction authority, including information on the total number of reports with redactions and the types of information redacted. Our review of available guidance and documentation shows that AOUSC has not implemented a formal process for producing annual redaction reports and has not submitted these reports to Congress in a timely manner. Implementing a more formal process, with specified steps and timeframes, would allow AOUSC to be better positioned to provide congressional committees of jurisdiction with the required annual redaction reports that can be used to conduct oversight of the federal judiciary’s use of its redaction authority. This is particularly important given that Congress recently passed an extension to the judiciary’s redaction authority through the end of 2027.

Recommendation for Executive Action

The Director of AOUSC should develop and implement a formal process, with specified steps and associated time frames, to better ensure that required annual redaction reports are completed and submitted to Congress within the following year.

Agency Comments and Our Evaluation

In April 2018, we requested comments on a draft of this report from DOJ, USMS, and AOUSC. Neither DOJ nor USMS had any comments. AOUSC provided technical comments, which we have incorporated into the report, as appropriate. In particular, based on AOUSC comments, we amended the report title to provide greater clarity into the subject matter of the report and added additional text to the conclusions section to better address all aspects of the report’s findings. In addition to its technical comments, AOUSC provided an official letter for inclusion in the report, which can be seen in appendix III. In its letter, AOUSC stated it concurred with the recommendation and will determine how best to implement a more formalized process to better ensure it can submit annual redaction reports to Congress in a timely manner.

We are sending copies of this report to the Administrative Office of the U.S. Courts, the Attorney General, the United States Marshals Service, selected congressional committees, and other interested parties. In addition, this report is also available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any further questions about this report, please contact me at (202) 512-8777 or goodwing@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributions to this reported are listed in appendix III.

Appendix I: Administrative Office of the U.S. Courts Form AO 10: Blank Financial Disclosure Report for Calendar Year 2016

Appendix II: Administrative Office of the U.S. Courts Form AO 10A Used for Requesting Copies of Judicial Officials’ Financial

Appendix III: Comments from the Administrative Office of the U.S. Courts

Appendix IV: GAO Contact and Staff Acknowledgements

GAO Contact

Staff Acknowledgements

In addition to the contact named above, Christopher Conrad (Assistant Director) and Valerie Kasindi (Analyst-in-Charge) managed this assignment. Kristiana Moore, Dominick Dale, Melissa Hargy, Eric Hauswirth, Amanda Miller, Jerry Sandau, and Janet Temko-Blinder made key contributions to this report.