Video: Judge significantly invested in BP, oil stocks

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    MADDOW: keep you posted. We begin our coverage tonight, though, with a bombshell in the newly released financial records of the judge who has blocked the temporary ban on deepwater drilling in the Gulf of Mexico . This is a ban that was imposed by the Obama administration in the wake of the BP oil disaster. It essentially says no more deepwater drilling in the Gulf for six months. Earlier this week that ban was struck down by a U.S. district judge in Louisiana named Martin Feldman . According to our review of documents released today, it appears that Judge Feldman is significantly invested in none other than BP . Judge Feldman `s 2009 financial disclosure report provides a detailed list of all the companies and trusts that he is invested in. This is the latest information that we have available. This was his 2009 disclosure reports. And there is one investment in particular that shows up over and over and over again. It`s an investment management firm called Blackrock . If you look through this judge`s financial holdings you`ll find Blackrock Floating Rate Income Strategies Fund , Blackrock Limited Duration Income Trust , Blackrock Floating Rate Income Strategies Fund again, Blackrock Global Floating Rate Income Trust , Blackrock Global Floating Income Trust , Blackrock Enhanced Dividend Achievers Trust , Blackrock and Blackrock , and Blackrock , and Blackrock and Blackrock . He took this Blackrock investments listed as having the value of up to $15,000. And if you think you`ve heard the name Blackrock in the news recently, this was probably where. " The New York Times " last Wednesday, quote, "No single institution has more money riding on BP than Blackrock . The money management firm that is BP `s largest shareholder." Blackrock is the single biggest shareholder in BP . Nobody is more invested in BP than Blackrock . Look at this chart. Look at this chart of the biggest stakeholders in BP . This is published in the " New York Times ." Blackrock owns more than one billion shares of BP stock . When BP `s financial future is at stake in the Gulf of Mexico , so is Blackrock `s. Again this judge is invested in various divisions of Blackrock . But here`s what it looks like when you break down how Blackrock `s components and parts are dependent on BP `s financial health. Take for instance, the Blackrock Enhanced Dividend Achievers Trust which this judge is invested in to the tune of somewhere up to $15,000. According to their latest filing with SEC , here is a list of their largest holdings. Look. BP . And it`s not just this judge`s potential financial interest in BP alone. It has always been noted this week that this judge had and sold stock in the drilling company Transocean , which owned the Deepwater Horizon rig that blew up in the Gulf . Within the last year, this judge also held stock in a company called the Noble Corporation . Noble is definitely one of the companies affected by the deepwater drilling ban. Noble is currently operating two drilling rigs in the Gulf of Mexico that are sitting idle because of this drilling ban. According to documents we reviewed today, every day the moratorium goes on, one of those rigs loses roughly $459,000. Every day for that company. Again, this judge previously owned stock in Noble . But those shares appear to have been sold last year. And according to these new documents that we have reviewed, Judge Feldman is still invested in all sorts of other energy industry related companies. Drilling companies, pipeline companies, companies that service drilling platforms. The financial health of some or all of these companies could very easily be tied to this judge`s rulings on this moratorium . Then there`s Exxon Mobile . An oil giant whose financial future is directly at stake with the drilling moratorium . This judge owned stock in Exxon Mobile as of Tuesday. Judge Feldman himself made a special note on his financial disclosure report that, quote, "The Exxon stock was sold at the opening of the stock market on June 22nd , 2010 prior to the opening of a court hearing on the Oil Spill Moratorium case." You know what? That wasn`t just any court hearing that day. Judge Feldman sold his Exxon stock on Tuesday, on the morning of June 22nd . The day he made his ruling to overturn the moratorium . Why would holding Exxon stock present a direct conflict of interest? Because Exxon operates one of 33 rigs in the Gulf shut down by the moratorium . This judge sold his stock in Exxon on Tuesday. But when he began hearings, right up until the day of the ruling, he was still an Exxon shareholder. He was holding hearings on a case that would directly affect his own financial future . The financial future of a company he held stock in. Judge Feldman `s office told us today that the judge says he didn`t learn that he was an Exxon shareholder until Monday night, the night before his ruling. Then he says he instructed his stock broker to sell his shares the very next day. The judge is still invested -- heavily invested -- in parts of a company that holds more than a billion shares of BP in BP `s single largest investor. The fact that he`s invested in all of these companies doesn`t make this judge a bad man. That`s not the point here. He shouldn`t be targeted in any way. I`m sure he`s a very nice person. He seems like a very nice person from everything I`ve read about him. And now I`ve read a lot. But how on earth should this be the judge called on to make this sort of ruling? This district court in Louisiana on which Judge Feldman sits reportedly has systems in place to catch conflicts of interest like this. Apparently those systems work about as well as a blowout preventer on a 5,000 foot deep well. Joining us now is Kate Gordon , vice president for energy policy at the Center for American Progress . She is a member of the state bar of California . Kate , thanks very much for joining us.

    KATE GORDON, CENTER FOR AMERICAN PROGRESS: It`s great to be here, Rachel .

    MADDOW: So we learned a lot in this financial disclosure report as we went through it today. What is the biggest takeaway for you here?

    GORDON: I mean this is just amazing to me. We`re talking about a judge deciding the highest profile case on energy and oil in the country whose dividend checks depend on the outcome of a case that he`s deciding. And that doesn`t seem to be a problem for him. It`s sort of incredible.

    MADDOW: If you leave aside all of the other energy related stocks held by this judge, and we went through trying to learn as much as we could about all of the different energy companies that he`s invested in, there`s a lot. And it took a lot of time. Even if you don`t consider all of those, though, he owned Exxon stock while he was holding hearings in this case.

    GORDON: Right.

    MADDOW: Even if that was the only thing that was true, wouldn`t that alone disqualify him from getting the case? Shouldn `t that have led to a recusal?

    GORDON: Absolutely. Any stock that he owned that where there was a direct relationship -- again, we`re not talking about somebody who owned some shares of some oil companies that were in the same industry as BP . We`re talking shares in a company with a rig directly impacted by the moratorium with hundreds of thousands of dollars of potential loss every day. It`s in effect. That means that every day that a judge decides the moratorium isn`t in effect is essentially money in the pocket to that money, and therefore money in the pocket to the shareholders. There`s a direct connection.

    MADDOW: Kate , tonight the Justice Department filed an emergency request with the U.S. Court of Appeals to put a hold on this judge`s decision. There`s a number of grounds on which they are appealing the case. But in your view, does -- do they have a case in terms of this apparent conflict of interest? Is this specifically the kind of thing that might help the government`s case?

    GORDON: I think it is. You know, it`s often said that all -- many of the judges down there own oil stocks. And I think that`s right. It`s 50 to 60 percent. But so many cases come up about oil down there that -- I mean those courts have got to have a list of judges that don`t have oil stocks. And I think that in this case, such a high profile case with so much public attention focused on it, this is exactly the situation where you go to your list and you say, OK, who are we going to get who absolutely has no conflict in this case? You know, we`re talking about hundreds of thousands of dollars a day. Again it`s a direct financial interest and it`s a direct shareholder interest. I think that one -- you know, one grounds for a challenge. There are others. But that`s certainly one, I think, the government could look to.

    MADDOW: Kate Gordon , vice president for energy policy at the Center for American Progress , thanks very much for joining us. Really appreciate your time.

    GORDON: Thanks, Rachel.

By
updated 6/25/2010 10:04:48 PM ET 2010-06-26T02:04:48

The Louisiana federal judge who struck down a six-month ban on deepwater oil drilling has sold many of his energy investments, a financial disclosure report released Friday reveals.

U.S. District Judge Martin Feldman's disclosure report, which covers investments for 2009, shows he owned eight energy-related investments including stock in Exxon Mobil Corp.

However, in an attachment to the report, the judge said he sold his Exxon Mobil stock this June when he was hearing the oil spill case.

In last year's disclosure report, Feldman owned up to 16 energy-related investments.

Among the assets sold was stock in Transocean, the Switzerland-based company that owned the drilling rig operated by BP that is now spewing oil into the Gulf.

Feldman, a 1983 nominee of President Ronald Reagan, struck down the Obama administration's six-month moratorium on deepwater oil drilling in the Gulf of Mexico, disputing what he said was the government assumption that because one rig exploded, others posed an imminent danger.

On Thursday, Feldman refused to place his ruling on hold while the government appeals.

Feldman's Exxon Mobil stock in 2009 was valued at $15,000 or less and produced an income of less than $1,000.

The judge has an investment in Ocean Energy valued between $15,001 and $50,000, which produces interest valued between $1,001 and $2,500.

Other holdings include investments in Provident Energy Trust, El Paso Corp., Energy Transfer Equity, Basic Energy Services, Valero Energy Corp., Crosstex Energy LP and BlackRock, one of BP’s largest shareholders.

Values of investments and income are expressed in ranges rather than precise amounts.

An Associated Press analysis has found that more than half of the federal judges in districts where the bulk of Gulf oil spill-related lawsuits are pending have financial connections to the oil and gas industry. This could complicate the task of finding judges without conflicts to hear the cases.

Federal judicial rules require judges to disqualify themselves from hearing cases involving a company in which they have a direct financial interest.

However, financial conflict rules have some leeway. For example, a judge does not have to step aside if investments are part of a mutual fund over which they have no management control.

Further, mere ties to companies or entities in the same industry, no matter how extensive, do not require disqualification.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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