Samuel Alito & Vanguard

In a National Review Online article from about two months ago, Ed Whelan of the Ethics and Public Policy Center explained the details of the mutual fund case that has come to fascinate Supreme Court nominee Samuel Alito's detractors…

In Monga v. Ottenberg, a bankruptcy receiver sought to have a party's IRA assets (which included funds in a Vanguard account) made available to pay the bankrupt party's creditors. Vanguard was a party to the case because the bankrupt party sued it to prevent it from releasing his IRA funds to his creditors. In other words, Vanguard's only interest in the case was as a third party who held funds belonging to someone else — it was going to make them available either to the creditors or to the bankrupt party, but Vanguard had no interest in the funds. When the case went to the Third Circuit, Judge Alito, who owned some Vanguard mutual funds, joined two of his colleagues in unanimously dismissing the claims of the bankrupt party. In a desperate attempt to get one last bite at the apple, the bankrupt party claimed after the case had been decided that Judge Alito should have recused because he owned some Vanguard mutual funds….

As several legal ethics experts have stated, Alito had no obligation to recuse because Vanguard didn't stand to benefit financially (or be harmed financially) as a result of the case. Vanguard was going to release the funds to someone; it was just a question of who got them. So Alito had no conflict of interest that required him to recuse.