The Washington PostDemocracy Dies in Darkness

The Supreme Court clerk who leaked a ruling to Wall Street traders

The U.S. Supreme Court in 1921. (Harris & Ewing/Library of Congress)

In 1919, a young Supreme Court clerk named Ashton Fox Embry abruptly resigned after nine years of working for Justice Joseph McKenna, pleading that he needed to attend to his bakery business.

The mystery of his sudden defection was cleared up a few weeks later. Embry was indicted on a charge of providing inside information about the expected result in a case to Wall Street speculators, who used the information to make illicit profits in stock trades.

A century later, the scandal of Embry’s alleged leak has been largely forgotten. But as the Supreme Court confronts its highest-profile leak in history, of a draft opinion by Justice Samuel A. Alito Jr. overturning Roe v. Wade, the Embry case offers important lessons about the difficulty of bringing full clarity to the rare breaches in the court’s long tradition of secrecy.

The national parlor game of whodunnit over the identity of potential leakers who gave Alito’s draft opinion to Politico has led to wild speculation.

The 1973 Roe v. Wade decision also was leaked to the press

Sen. Ted Cruz (R-Tex.) has suggested that one of the law clerks for Justice Sonia Sotomayor is the most likely suspect, without, as he admits, a scintilla of evidence. Others, again without any proof, see Justice Clarence Thomas’s wife, the right-wing activist Virginia “Ginni” Thomas, as the culprit.

But history tells us that if the person or persons responsible do not confess, we may never know their identity.

The 1973 opinion in Roe v. Wade was itself leaked to the press, but the only reason we know who disclosed the ruling in advance is because the law clerk responsible came forward and offered to resign after Chief Justice Warren Burger called for an investigation.

And we wouldn’t know Embry’s name now if not for the Justice Department’s decision to prosecute him — or for the work of another judge, John Owens of the 9th Circuit Court of Appeals. Owens clerked for Justice Ruth Bader Ginsburg in the late 1990s, and he became obsessed with the disloyal clerk saga. He conducted an extensive research project using documents at the National Archives and in Supreme Court records, and he has written in depth about the case.

That case, though colorful, remains unsolved to this day despite an intense investigation and an appeal that made its way to the Supreme Court, the very institution the clerk was accused of betraying.

Embry, a Kentucky native with a Georgetown law degree, held a series of jobs as a clerk (or “stenographer,” as the position was called then) at the Justice Department and for a federal judge in Tennessee before being hired by McKenna. The case against Embry by the Justice Department and the relatively new Bureau of Investigation (which became the FBI in 1935) was based on highly suspicious circumstantial evidence that convinced a grand jury that Embry and several conspirators committed a crime.

The facts are fairly straightforward. Embry admitted to investigators that he knew what the result would be in a case involving the Southern Pacific Railroad Co. and met with one of the conspirators — a Justice Department attorney and a partner in Embry’s baking business — the night before the ruling was to be handed down. He further admitted he gave this conspirator $5,000. The conspirator took the money and traveled by night train to New York City, where he and others sold Southern Pacific stock short the next morning. Later that day, the decision of the Supreme Court against the railroad was announced, and the speculators walked away with a handsome profit. Embry admitted that his conspirator repaid the $5,000 advance and an additional $600 (equivalent to about $10,000 today) once he returned to Washington.

A newspaper reporter named Marlen Pew was tipped off by an informant, a man named John C. Hammond who had been approached to join the scheme. Pew thought it his duty to visit Chief Justice Edward White and tell him what was going on. White was dumbstruck and “so affected by his emotion concerning the alleged imposition on his Court that he wept,” according to Pew’s account in the Washington Times.

The chief consulted with McKenna, who was showing signs of dementia, and they decided to ask the Justice Department to investigate. The department gave Hammond a machine known as a dictagraph to secretly record conversations with Embry’s conspirators.

Once arrested, the suspects hired lawyers who came up with a novel defense. Without admitting the clerk provided inside information, they asked: So what if a Supreme Court clerk told others in advance about expected rulings by the court? How is that a crime? (At the time, insider trading laws did not yet exist.)

In response, the government invoked the federal prohibition on conspiracy to commit offense against or defraud the United States. The theory was that when Embry shared information in advance of the ruling, the United States was defrauded and deprived it of its lawful right to announce its decisions in its customary time and fashion. The trial judge bought the tenuous theory and allowed the case to proceed. Before any actual trial began, the defense attorneys appealed that decision to the Supreme Court, which declined to hear the matter without comment, sending it back to the trial court.

Embry never confessed to sharing inside information, and for unexplained reasons the case dragged on for almost a decade before simply being dropped without going to trial. Hammond, the informant, turned out to be unreliable (a young J. Edgar Hoover thought Hammond was “lacking in good mental balance”), and new presidential administrations and a new chief justice, William Howard Taft, showed little appetite for pursuing the case.

Embry prospered in his bakery business — according to Owens, he and his brother expanded to seven locations in Washington, their specialty being salt-rising bread “from an old Kentucky recipe” — and never looked back. His case is a reminder that pulling back the velvet curtain at the Supreme Court is a fraught business — even in a leak as scandalous as the current one.

“The 1919 leak scandal eventually drifted from the Court’s conscience,” Owens told The Post. “This one won’t.”

When Embry died in 1965, his son honored his father’s final request and secretly spread his ashes on the grounds of the Supreme Court late one night, under the cover of darkness.

One wonders if Embry’s spirit of concealment still haunts the court.

Loading...