JUDGE AS BANK ORGANIZER;
SPOUSE AS CORPORATE DIRECTOR

Opinion No. 70 (1983)*


QUESTION:
1. Would a judge be in violation of any section of the Code of Judicial Conduct by serving as an organizer of a new bank?
2. Would a judge be in violation of the Code of Judicial Conduct if the judge's spouse serves as a director on the board of a publicly owned corporation?
(In each of the above situations, neither the judge nor spouse would trade on or emphasize the fact of the judge's position as a judicial officer.)

ANSWER TO QUESTION 1: The Committee is of the opinion that the Code of Judicial Conduct does not specifically prohibit a judge from serving as an organizer of a new bank. Canon 5C(2) permits a judge to hold and manage investments and engage in other remunerative activities, including the operation of a business. When making such an investment, however, the judge must comply with paragraph C(1) of Canon 5, which requires a judge to refrain from financial or business dealings that tend to reflect adversely on his impartiality, interfere with the proper performance of his judicial duties, exploit his judicial position or involve him in frequent transactions with lawyers or other persons likely to come before the court on which he serves. In his business dealings, the judge must also comply with Canon 5C(3) which requires him to divest himself of interests that might require frequent disqualification (see Canon 3C and Canon 2B, which prohibits him from lending the prestige of his office to advance the private interest of others.) Subject to the stated conditions, the investment in question is permissible under the Code.

ANSWER TO QUESTION 2: The Committee is of the opinion that the Code of Judicial Conduct does not prohibit a judge's spouse from serving as a director on the board of a publicly owned corporation. The Committee suggests, however, that a wife should serve under her own name. The judge is disqualified in any proceeding involving the company. (Canon 3C(1)(c)) (Adopted by the Committee, one judge dissenting, one judge dissenting on the answer to Question 1, and one judge not participating.)

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*Provisions relating to recusal and disqualification were removed from Canon 3C effective January 21, 1987. See Rules 18a and 18b, Texas Rules of Civil Procedure. Canon 5C(1) was amended effective December 19, 1989.