Vanguard Ruling Defended
'Oversights,' but No Conflict, Alito Says

By Amy Goldstein
Washington Post Staff Writer
Wednesday, January 11, 2006

Supreme Court nominee Samuel A. Alito Jr. acknowledged yesterday "there were some oversights" that led him to rule on a lawsuit involving a mutual fund company in which he holds personal investments. But, as Democrats sought to cast doubt on his ethics, he asserted he did not break conflict-of-interest rules on when a federal judge should sit out a case.

Alito gave the most extensive of several explanations he has offered in recent weeks as to why he did not recuse himself from a 2002 case involving the investment firm Vanguard. A dozen years earlier, he had promised in writing to senators who confirmed him as an appellate judge that he would disqualify himself from "any cases involving the Vanguard companies."

"I just didn't focus on the issue of recusal" when the case arose, Alito told the Senate Judiciary Committee. He said the reason was that the plaintiff -- a woman who said she was entitled to money from a retirement fund belonging to her late husband -- was representing herself without a lawyer. In most cases, he said, the clerk of the U.S. Court of Appeals for the 3rd Circuit asks judges beforehand whether they need to recuse themselves. But that checking is not done, he said, in such lawyerless cases.

"If I had to do it over again, there are things that I would have done differently," Alito said. Still, he said that ethics standards did not require him to refrain from voting in the case, adding that he would have done so only because he has tried as a judge "to go beyond the letter of the ethics rules and to avoid any situation where there might be an ethical question raised."

Democrats have used the Vanguard case as a wedge to challenge his fitness for the Supreme Court: whether he is a man of principle.

"The point about all of this," said Sen. Edward M. Kennedy (D-Mass.), who grilled Alito about Vanguard, is "so that interested parties that come before the courts are going to believe, not only in reality but in appearance, that they're going to get a fair shake."

The recusal issue produced yesterday's most ardent defense of Alito by the committee's Republicans. Sen. Orrin G. Hatch (R-Utah) called the Vanguard question "as phony as anything I've ever seen in my time around here." Sen. Charles E. Grassley (R-Iowa) told Alito not to "lose any sleep" over having forgotten his 1990 recusal promise to the senators.

Alito was part of a three-judge panel of the 3rd Circuit that in 2002 unanimously upheld the dismissal of the lawsuit by the Pennsylvania widow, Shantee Maharaj, against Vanguard. In 2003, she read the financial disclosure statements of the judges who issued the ruling, noticed Alito's investments in Vanguard and filed a motion accusing him of conflict of interest.

At the time, Alito said he had not violated any ethics standards but disqualified himself from the case anyway. The 3rd Circuit's chief judge appointed a new three-judge panel, which in 2004 upheld the case's dismissal.

On his financial disclosure forms for 2002, Alito reported that he owned shares in 17 Vanguard funds worth a total of $390,000 to $975,000. Democrats have not suggested Alito profited financially from his participation in the case -- a point the nominee emphasized yesterday.

When the issue resurfaced once President Bush nominated Alito to the high court on Oct. 31, a White House spokesman said at first that a "computer screening program" had neglected to detect the potential conflict -- an explanation Alito said yesterday was incorrect.

Alito then sent Judiciary Committee members a two-page letter with different explanations: that his 1990 promise went further than ethically necessary in pledging not to rule on cases involving Vanguard and two other financial institutions, and that he had promised only to avoid cases involving the two companies during his "initial service" on the court. According to Democratic Senate aides, Alito mentioned the issue of lawyerless cases -- the explanation he gave yesterday -- in at least two recent, private meetings with senators.

Sen. Russell Feingold (D-Wis.) said Republicans are wrong to portray Vanguard as irrelevant. "I reject this idea . . . that asking questions about an ethical issue is somehow a political game."