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Top court’s financial disclosures provide snapshot

Six of the seven judges on Maryland’s top court own more than one home, two are carrying more than $10,000 in non-mortgage debt, two have car payments and one is ruing a bad investment from 25 years ago.

Many have money in mutual funds, while one has a diversified stock portfolio, with holdings in drug, software and oil companies.

This information, gleaned from the judges’ financial disclosure forms for calendar year 2011, provides a snapshot of the Court of Appeals judges, but not a complete picture. The judges are required to list their properties, debts and investments but not their net worth.

A Bethesda-based certified public accountant who reviewed the forms said true disclosure would include a statement of the judges’ assets, liabilities and bank holdings.

“I was surprised that the documents do not require the disclosure of money held in deposit at banks,” said Thomas A. Sigler, CPA. “A major depositor in a small local bank could conceivably have a lot of influence over that bank’s financial behavior.”

The Court of Appeals’ lack of net worth disclosure is in stark contrast to the Supreme Court.

The justices are required to list their assets and liabilities and, based on those disclosures, provide a general range of their net worth. For example, for calendar year 2010, Chief Justice John G. Roberts Jr. listed his net worth as between $2.5 million and $6.2 million, with 57 separate assets and no liabilities.

Full disclosure is required “so everyone knows there is no conflict of interest,” said William Reynolds, the Jacob A. France Professor of Judicial Process at the University of Maryland Francis King Carey School of Law.

At the federal level, now-retired Supreme Court Justice Sandra Day O’Connor routinely recused herself from telecommunications cases because of her stockholdings in AT&T, which she listed on her annual financial statement. For calendar year 1997, she listed AT&T holdings of $15,000 to $50,000 and a net worth of between $2.3 million and $5.6 million, according to the Associated Press.

Under Maryland’s Code of Judicial Conduct, judges are required to recuse themselves “in any proceeding in which the judge’s impartiality might be questioned,” including a case in which they have “a significant financial interest in the subject matter in controversy or in a party to the proceeding.” Significant financial interest is defined as having received or being entitled to receive more than $1,000 per year.

On the Maryland Court of Appeals, Judge Sally D. Adkins’ financial disclosure for calendar year 2011 lists that she has stock in the pharmaceutical companies Merck and Amgen Inc., software giant Microsoft Corp. and Apache Corp., an oil-and-gas company.

Adkins said in an email that she has recused herself “for financial reasons a handful of times” during her 16 years on the bench —four years on the high court, 10 on the Court of Special Appeals and two on the Wicomico County Circuit Court.

One of those cases that prompted her recusal is Gomez v. Jackson Hewitt, filed with the Court of Appeals on June 22. Adkins said she owns stock in E.S. Adkins & Co., which leases a small office to a franchisee or other affiliate of Jackson Hewitt.

“As a matter of standard practice, I recuse myself if the case involves a company in which I hold any security that meets the specific criteria” of the code, Adkins stated. “In some cases, I will recuse myself even though the security does not meet these criteria in full, because I believe my ownership interest might cause someone to reasonably question my impartiality.”

The Court of Appeals forms show that Adkins has interests in five real properties that she valued at about $1.8 million: two in Wicomico County, one in Ocean City, one in Sussex County, Del., and another in Punta del Burro, Mexico.

Mortgage, cars and credit cards

Chief Judge Robert M. Bell holds three properties in Baltimore with a net value, after deducting for mortgage owed, of $603,000.

He also listed a total of $10,187.82 in non-mortgage debt, more than half of it to credit-card issuers American Express and Slate from Chase, with the balance to department stores Saks, Nordstorm, Lord & Taylor, Neiman Marcus and Macy’s, and to Harbor Bank of Maryland. Bell, who is set to retire in July 2013, paid down his non-mortgage debt by about one-fourth since last year’s filing; his 2011 form listed a total of $13,597 in that category.

Judge Clayton Greene Jr. has two real estate holdings in Anne Arundel County with his wife, Janice, with an estimated net value of $530,000. One property is the couple’s residence, and the other is a house where his mother-in-law lives.

Greene also listed non-mortgage debts totaling $47,122.45, including more than $15,000 in credit card debt, about $20,000 in auto loans for himself and his wife and the balance on a lease with American Honda Finance Corp. on a car for his parents. (Greene did not list these debts or their amounts on last year’s form.)

Nearly all of Greene’s credit card debt was on a Visa through the State Employees Credit Union. Greene also has a credit card from Sears with a four-figure balance.

Without naming names, Sigler said that “some of the judges could benefit from the services provided by a financial planner.”

Bell’s salary, as chief judge, is $181,352. The other Court of Appeals judges are paid $162,352.

“Somebody with that kind of income should not be carrying that high revolving debt,” Sigler said, noting that credit cards in general charge a relatively high interest rate. “From a money-management perspective, carrying credit-card debt is not a good idea.”

Maryland Judiciary spokeswoman Terri Bolling stated in an email that Bell and Greene have filed their financial disclosure statements “as required by law.” Each judge “indicates that he has nothing further to report,” Bolling added.

Judge Mary Ellen Barbera listed two residential properties, which she holds jointly with her husband, Montgomery County Circuit Judge Gary E. Bair. Their Montgomery County residence has a net appraised value of $210,158, when accounting for the mortgage debt, and their Worcester County property has a net of $333,100, for a total of $543,258.

Barbera, who listed no non-mortgage debt, disclosed investments in Ameriprise, Wells Fargo, Franklin Investments, Oppenheimer and Vanguard funds.

A court spokeswoman said in an email that Barbera was unavailable for comment.

Judge Lynne A. Battaglia also listed two properties, one in Howard County that she owns jointly with Louis Norbeck and another that she owns solely in Sussex County, Del.

Battaglia did not list on the disclosure form what percentage of interest she has in the Howard County property, which was purchased for $670,000 in November 2006. The mortgage lender, Chase Bank, loaned a principal of $348,000.

Battaglia purchased the Delaware home for $557,000 in May 2004. The mortgage lender was Wells Fargo, but Battaglia did not provide the loan principal on the disclosure form.

She listed American Funds as her only investment.

The newest member of the court, Judge Robert N. McDonald, listed his residential property in Baltimore County, which he owns with his wife, Joyce, with a net value of $210,000; and land in North Carolina that his in-laws gave to him and his wife valued at $153,000, for a total of $363,000. McDonald, who listed no non-mortgage debt, also disclosed holdings in Vanguard, T. Rowe Price and Fidelity Investments.

McDonald, who joined the high court on Jan. 24, made his financial disclosure not on the judges’ form but on the form required for his prior job: chief counsel for opinions and advice at the Office of the Attorney General of Maryland.

Neither Battaglia nor McDonald responded to requests for comment placed through the Maryland Judiciary’s public information office.

Feeling frugal

Judge Glenn T. Harrell Jr. was the only member of the court to list just a single home, with net equity of $118,830. He listed non-mortgage debts of $4,691.06 to the Maryland State Employees Union for his purchase of a 2007 Nissan Altima and $2,143.53 to Sallie Mae on a student loan for a son.

Harrell also listed what he described in a telephone conversation as “a bad investment” in 1985 that has a recorded loss of more than $9,000.

The judge, who holds no other stock, said he invested on the advice of a fraternity brother/financial adviser who told him in the mid-1980s that the future was in shopping malls anchored by K-Marts or Wal-Marts. That 1 percent investment in Nolan River Mall Associates has a negative cash value of $9,022, the minimum price Harrell would have to pay to get out of it today.

“It has not turned out as it was originally pitched,” Harrell said of the investment set to expire in 2015. “I’m looking forward to the time I can set fire to it.”

Harrell, the father of two adult sons, attributed his limited debts to his and wife Pamela’s “frugal lifestyle, once we got the boys out of the house.”

Harrell said that any debt he has was the result not of poor financial planning but the anticipated cost of leaving a law practice for the bench, as he did in 1991 when he was appointed to the intermediate Court of Special Appeals.

“With the transition from a successful private practitioner from the 1970s and ’80s, there had to be a diminution in my standard of life when I went on the bench,” Harrell said. “You have to expect when you do that there are going to be changes in your life and your bottom line.”