WASHINGTON--Supreme Court nominee Douglas H. Ginsburg had almost $140,000 invested in a cable television corporation when he "personally handled" a Justice Department effort to have the court extend First Amendment protection to cable operators.
An administration source close to Ginsburg said yesterday that Ginsburg apparently did not raise the possibility of staying out of the case with Justice Department superiors or with agency ethics officers. He said Ginsburg discussed the situation with a subordinate.
The Supreme Court, on June 2, 1986, adopted Ginsburg's arguments in a decision that will reduce government regulation of cable operators.
"It is a First Amendment rights case that had economic consequences to it...," said a former federal ethics official familiar with the cable case but not with Ginsburg's role in it. "If I'm holding cable stock, that is a good thing for me."
Ginsburg, nominated by President Reagan to succeed retired Justice Lewis Powell on the court, apparently did not violate criminal conflict of interest laws because the company in which he invested was not a direct party to the case even though it could benefit from the ruling.
But ethics experts said Ginsburg's actions could be viewed as skirting a presidential executive order forbidding actions that create an appearance of a conflict or of favoritism. Violation of that order carries administrative penalties, such as a letter of reprimand or suspension.
Ginsburg, through his informal spokesman W. Stephen Cannon, declined yesterday to comment on his role in the cable case until he has an opportunity to review his records.
A former head of the Justice Department's antitrust division and now a U.S. Circuit Court of Appeals judge, Ginsburg, 41, is little known to the public, and his professional performance is being scrutinized by the Senate Judiciary Committee in preparation for confirmation hearings.
Ginsburg was before the same committee a year ago, when he was nominated for the appeals court. A Democratic source on the committee said the panel did not notice then that he had worked on the cable case while he had a sizable investment in Rogers Communications Inc. of Toronto.
Rogers has about 450,000 subscribers in Arizona, California, Minnesota, New Mexico, Oregon and Texas. The firm is is about the 20th-largest cable operator in the United States, and--with extensive Canadian franchises--the third-or fourth-largest in North America, according to company officials.
Ginsburg was assistant attorney general in charge of the anti-trust division at the Justice Department when the Reagan administration filed a friend-of-the-court brief in a Los Angeles cable television case.
The administration source said Ginsburg discussed staying off the cable case with Charles F. Rule, then his deputy in the anti-trust division, but that, "the question didn't go beyond that discussion." Justice regulations provide that where disqualification questions arise at Ginsburg's level they should be referred to the deputy attorney general for a written ruling.