During the last four years, 93 federal judges -- nearly one-fifth of the federal judiciary -- have attended all-expense-paid economics seminars in Florida financed by large corporations regularly involved in federal court cases.
The 105 corporate contributors include companies that are almost always before a federal judge somewhere, often in antitrust, regulatory of affirmative-action cases. They include IBM, ITT, AT&T, Standard Oil of Ohio, the Ford Motor Co., U.S. Steel and others.
The judges universally praise the sessions as useful and stimulating instruction in basic economics, which helps their understanding of the increasingly complex cases they face.
Critics among government regulators and liberal law professors see them, however, as a sophisticated new technique by corporations to lobby and propagandize the federal judiciary subtly. Their alarm is heightened by the increasing tendency among many judges, including some of those who have attended to decide regulatory and antitrust cases in favor of big business.
The critics all declined to be quoted, saying they were fearful of antagonizing the judges publicly.
Henry G. Manne, director of the Coral Gables-based center, said his courses scrupulously avoid passing judgment on the law or specific types of cases.
As for the contributing corporations, Manne acknowledged that it would be "disingenuous" to suggest that they don't see the program "in idiological terms.If they view the current status of antitrust law as being entirely out of line with economic sense, then they [the corporations] may think we are moving things in the right direction."
Judges are strongly discouraged by their code of ethics from accepting anything from anyone who may appear before them in court.
Most of the judges interviewed said they have been unaware of the corporations sponsoring the seminars. Most also said that the corporate sponsorship did not concern them.
The seminars have become enormously popular among federal judges, and receive twice as many applications than they can handle for the 22-student classes.
But the judges say their invitations do not mention the corporate sponsorship. They see the program as a conventional continuing-education fellowship.
The corporation money supports all the center's various programs, not just the judge's program. But the judges' seminars are the selling point in fund-raising, he said.
While those interviewed were universally enthusiastic about the usefulness of the two-week session, they disagreed about the objectivity, some saying the classes were tilted against government intervention in business, others saying they were neutral.
While the teachings may influence the judges, even critics of the program agree that the corporate contributions do not, especially when judges don't know about them.
But the Judicial Code of Ethics stresses that the appearance of justice is just as important as justice itself. The potential problem for judges attending the seminars is appearance.
New York U.S. District Court Judge David N. Edelstein, who presides over the long-running government antitrust action against IBM, attended the seminars. IBM is one of the contributors. He did not return telephone calls requesting comment.
California U.S. District Court Judge Samuel Conti, who also recently heard a major IBM antitrust case, has also attended the seminars. He said he was unaware of IBM's sponsorship, though as a precaution he requested and received no objections from both parties in his IBM case before attending.
Another California U.S. District Court Judge, Spencer Williams, recently decided a major antitrust case involving ITT, another contributor. "I didn't know who they (the sponsors) were," Williams said. "I didn't care who they were."
Third U.S. District Court of Appeals Judge Max Rosenn, a seminar participant, recently considered a major case involving U.S. Steel, which also gave money to the Law and Economics Center, according to the center's annual report. He also was unaware of U.S. Steel's role in the seminars.
Probably all of the judges on the federal bench face the same possibility because of the size and nationwide reach of most of the sponsoring corporations, among them, Alcoa Foundation, Amoco Foundation, Continental Oil, Adolph Coors Co., Dow Corning Corp., Exxon Corp., the Firestone Tire and Rubber Co., General Dynamics, General Electric, Kaiser Aluminum, Pfizer and the Procter and Gamble Fund.
Within the past two years alone, at least 33 of the 105 companies have been involved in 59 major, not to mention minor, federal court cases.
To guard against ethical problems, Manne said, the money contributed to the center cannot be earmarked by a corporation for the judges' seminar, but must be put into a general fund, which pays for a variety of center programs.
"The course we give is a basic economics course. The faculty is strongly instructed not to talk about economics as supplying the answer to any particular legal field, except in antitrust, where you can't get away from it, or some of the regulatory fields, where things are put in explicit economic terms, like cost-benefits," Manne said.
To illustrate the neutral quality of the course, Manne noted that both Milton Friedman, the Nobel Prize-winning economist who symbolizes free-market economics, and Paul Samuelson, the Nobel Prize-winning economist who represents a Keynesian approach, have taught seminars. Most of the rest of the faculty members, including Manne, are on the whole, by reputation, of a conservative bent.
D.C. District Court Judge June Green, who said she was aware of the corporate sponsorship but sought and received the approval of the U.s. judges' ethics committee before attending, said she thought "They had some definite opinions, and most of it was against government regulation. I had not been particularly skilled in economics. This caused me to do a little more reading when I came back."
California District Court Judge Williams said that while "Friedman was pretty persuasive, I have no criticism of the course. I don't think they're trying to make any sales pitch. I think it was outstanding. It gives judges a good insight into principles of economics and statistics. It's especially helpful in civil rights cases, many of which are based on statistical analysis. It's very easy for judges and lawyers to get confused by some of this testimony.
Judge Conti said that, "if I thought I was being brainwashed, I'd say forget it. I go to a lot of other judges' meetings and don't go back because they're boring. Not this one."
U.S. District Court Judge A. aNdrew Hauk of California described in detail how what he learned in Florida helped him decide a major case two years ago in which he held unconstitutional 10 percent minority quotas for government contractors.
He learned that "in every discrimination case -- color, race, creed, sex -- every discrimation case, though the lawyers may not phrase it this way, it all comes down basically to economics and statistics. How do you determine if there's discrimination? You've got to look at the statistics involved.
"At that school you learn to look at the real world. In the quota case, I used it to determine whether these 10 percent quotas are effective or whether they were for fast-buck artists who come in, bring in a minority person, pay him off, and then kick him out when they've got the contracts," he said.
"More and more," the judge said, "life is best explained not by religion, not by law, but by economics."
Here is how the center's annual report describes the courses:
The "Principal issues of law and economics scholarship are . . . closely tied to considerations of individual choise, private property, freedom of contract and the market allocation of resources . . .
"The institute faculty bends over backward to teach as objectively as possible what is scientifically known and generally accepted about microeconomic theory.
"While this very objective view of economics frequently surprises students with its favorable implications for private property and free markets, these results should not be attributed to an effort by the faculty to prescribe or promote one normative or ethical view of economics over another."
The judges are housed at the Key Biscayne Hotel or the Royal Biscayne near Miami, Manne said. They pursue what all described as a rigorous all-day schedule of seminars and study for two weeks, with a day and a half off on weekends. Some evenings they are taken to restaurants, according to a recent course schedule.
Each seminar cost $75,000. The annual budget for the center is $1.5 million.
"Please check charges to your individual account at the front desk," says the course schedule. All expenses, Manne says, are paid.
Chief Judge Howard Markey of the U.S. Court of Claims and Patent Appeals heads for federal judiciary's Ethics Advisory Panel.
He said the panel has not considered any formal ruling on whether judges can attend these seminars, and that as its chairman he cannot express a personal view.
But Markey said he too received an invitation, which he declined. "It was just a personal feeling that it wasn't for me to get into," he said.
"I knew I couldn't afford it, and I can't accept gifts. That's just a personal decision."
