When news broke that Supreme Court Justice Clarence Thomas enjoyed hundreds of thousands of dollars in luxury vacations, private yacht and jet travel, proceeds from the sale of his ancestral home, and numerous other gifts from billionaire real estate magnate Harlan Crow, the justice proclaimed that he had done nothing wrong by arguing, among other things, that Crow “did not have business before the Court.”
It is true that Crow, who took over his father Trammell Crow’s business Crow Holdings Inc. in 1988, has not himself been a party in a case before the Supreme Court. But that doesn’t mean his financial interests as a real estate owner, landlord and commercial, residential and industrial developer haven’t come before the Supreme Court over the course of Thomas’ 31-year tenure.
Those interests can be seen in a series of cases related to racial discrimination in housing, the Clean Water Act and rent control that either have come or are expected to come before the court soon. A trade group that is currently chaired by Ken Valach, who took over as CEO of Crow Holdings Inc. from Crow in 2015, filed a series of friend-of-the-court, or amicus, briefs in those cases, according to research from Accountable.US, a progressive organization.
The National Multifamily Housing Council, where Valach was named chair in 2022, is a trade association that advocates on behalf of more than 1,000 large rental apartment owners. Three of Crow’s companies are among its dues-paying members, with Crow executives participating on the board of directors, executive committee and advisory committee. Prior to becoming chair of the trade group, Valach sat on its board of directors, beginning in 2015, as secretary and then treasurer.
In 2016, Crow hosted “emerging leaders” from the council at his East Texas ranch, where Valach spoke about their industry and held a discussion about conservatism.
The briefs filed by the council add to the list of amicus briefs submitted to the court by groups connected to Crow. The American Enterprise Institute, a conservative think tank where Crow sits on the board of trustees, has filed three briefs in cases that have come before Thomas. In 2003, the Club for Growth, a political group founded by free-market financial executives, joined a brief challenging the McCain-Feingold campaign finance reform law. At the time, Crow was on the group’s “founders committee.”
Crow’s business interests also came directly before the court in 2005 when the justices declined to hear an appeal in a lawsuit alleging that Crow’s company had improperly used building designs made by an architectural firm, according to Bloomberg.
The briefs filed by the National Multifamily Housing Council show how Crow’s interests in reducing government regulation of the real estate industry came before the court in an indirect manner. The council declined to comment on this story. Crow Holdings did not respond to a request for comment.
“One of the biggest challenges facing our industry is housing affordability,” Valach said in a statement upon being named chair of the council in 2022. “We know the solution to rising rents: build more housing without unnecessary and costly government regulations and fees. Let the market work and we will have affordable housing.”
In its amicus briefs, the council called for rolling back government regulations that it sees as impeding housing construction and the profits of landlords and residential developers like its members from Crow’s business empire.
None of this means that Thomas should have disqualified himself from hearing these cases. But the vast financial generosity Crow bestowed upon Thomas casts a long shadow over every case where the billionaire may have had a stake.
“What this all signals to me is a gray area in which anyone who cares about the integrity and legitimacy of the court, at a time when the court is under more pressure and more scrutiny than I have seen in my lifetime, would see that this is a concerning development,” said Charles Geyh, a judicial ethics expert at Indiana University’s Maurer School of Law.
‘Disparate Impact’
In 2014, the Supreme Court heard arguments in the housing discrimination case of Texas Department of Housing and Community Affairs v. The Inclusive Communities Project Inc. The case centered on whether so-called disparate impact studies, which show how apparently neutral policies can lead to racial discrimination, can support a claim under the Fair Housing Act.
The Inclusive Communities Project, a Dallas-based nonprofit, argued that the unequal distribution of the federal low-income housing grants by Texas’ housing authority violated the Fair Housing Act’s protections against racial discrimination, even though there was no evidence of discriminatory intent or treatment. Instead, the group argued that the housing law could be enforced by showing the disparate impact that the grant distribution had on segregating Black and white communities.
Disparate impact is a theory that aims to show how practices that aren’t explicitly discriminatory affect groups differently and lead to discriminatory results. The use of disparate impact by agencies and courts to prove racial discrimination has been controversial, particularly among affected industries and conservatives, as it looks at outcomes instead of intent. The court had previously upheld the use of disparate impact studies in federal anti-discrimination cases in its 1971 decision in Griggs v. Duke Power.
Stating that it was “representing the interests of the largest and most prominent apartment firms in the U.S.,” the National Multifamily Housing Council argued in its amicus brief that lower court precedents and Department of Housing and Urban Development regulations had misinterpreted the “plain text” of the Federal Housing Act by allowing the use of disparate impact to prove discrimination.
This alleged misinterpretation “created a veritable minefield for housing providers” that has “broad and unintended consequences,” including making it difficult to screen credit scores, criminal records and drug use history when accepting Section 8 housing applicants. If the court would not rule out disparate impact in housing discrimination cases entirely, then it should limit its use by issuing uniform national standards that were more favorable to landlords than the rules promulgated by HUD in 2013, the brief argued.
It is not clear if Crow’s companies held or financed any properties that received low-income housing support at the time of the case, but when the Trump administration sought to change the 2013 rules, Valach, in his role as Crow Holdings CEO, submitted a comment backing the proposed changes.
The Supreme Court ultimately ruled 5-4 in favor of allowing disparate impact to be allowed in housing discrimination cases, but with new limits on when and how such studies could be used. Then-Justice Anthony Kennedy sided with the court’s four liberals, while the four other conservatives dissented.
In a solo dissent, Thomas called for disparate impact studies to be disallowed not only in housing discrimination cases, but also in all federal anti-discrimination statutes. He called for the Griggs decision to be overruled, saying it was “made of sand.” Disparate impacts are not always bad, he argued, noting that “for roughly a quarter-century now, over 70 percent of National Basketball Association players have been black.”
There is no reason to believe that Thomas’ decision was influenced by any amicus brief, including the National Multifamily Housing Council’s. His position on disparate impact follows his long-held opposition to the use of race in policymaking and his belief that racism cannot be overcome, especially not by government action. But Crow’s largesse looms over any of Thomas’ decisions that relate to the billionaire’s interests.
Clean Water Act Wetlands Rules
A string of decisions regarding the Clean Water Act’s wetlands rules going back to at least 2001 are set to come to a head at the Supreme Court in Sackett v. EPA.
Current Environmental Protection Agency wetlands rules prohibit the “discharge of pollutants,” which can include materials involved in construction like rocks, sand and dirt, into “navigable waters.” Those rules define “navigable waters” as the “waters of the United States, including the territorial seas.” The cases coming before the court seek a new, and more limited, definition of the “waters of the United States” that would likely lead to a 51% (or more) reduction in the number of waterways governed by the EPA’s wetlands rules.
While the case of Sackett v. EPA is led by two individuals who performed construction on their own property, large real estate and industrial developers have also expressed support for limiting the reach of wetlands rules.
Crow’s business touts its development of “more than 66 million square feet of industrial space” on its website. “Industrial development is the foundation of our firm,” the company website states. In its industrial development work, Crow’s business is governed by the wetlands rules.
In 2022, Crow Holdings Industrial sought authorization from the Army Corps of Engineers under the Clean Water Act for a warehouse development in Georgia that would result in “cumulative adverse impacts to 6.87 acres of wetland.”
When Sackett v. EPA first came before the court in 2012, the National Multifamily Housing Council joined an amicus brief led by the American Petroleum Institute in support of the Sacketts’ challenge to the EPA’s wetlands rules. At the time, the court considered the question of whether courts could review challenges to administrative actions taken under the Clean Water Act.
The amicus brief joined by the council argued that courts had the authority to hear administrative decisions related to the Clean Water Act and also embraced a 2006 plurality opinion in Rapanos v. U.S. saying that the EPA’s wetlands rules “stretched the term ‘waters of the United States’ beyond parody.”
In a unanimous decision praised by the National Multifamily Housing Council, the court ruled in 2012 that Sackett could bring his case in court. That teed up the 2022 case of the same name that now awaits a decision from the court in the coming weeks or months. The current conservative supermajority is expected to embrace the plurality opinion in Rapanos and gut the wetlands rules.
New York Rent Control
In 2019, New York expanded its system governing rent-controlled apartments by extending the life of rent control and granting renters greater protections. Landlords filed a lawsuit challenging the new law as unconstitutional in federal court.
The National Multifamily Housing Council filed an amicus brief to the U.S. Court of Appeals for the 2nd Circuit in support of the landlords in 2021. The brief argued that the rent control law was unconstitutional and that it shifts financial costs onto landlords, drives up costs for further real estate development, and disincentivizes property renovations and further building.
At the time, Valach sat as chair of the council and CEO of Crow Holdings Residential, which held properties in New York. It is unknown if the Crow-held properties have any units that fall under New York’s rent control law.
In a decision issued in February, the appeals court ruled against the landlords and upheld New York’s rent control law. The landlord groups promised to appeal to the Supreme Court.
The court upheld rent control in 1993 against similar arguments related to the Constitution’s takings clause in a unanimous vote in Yee v. City of Escondido. Thomas was on the court at that time.
Amicus Ethics
The National Multifamily Housing Council’s amicus briefs may show how Crow’s business interests have come before the Supreme Court in a variety of cases where Crow was not a party, but they do not bump up against current court ethics guidelines.
“This situation would not come near to requiring recusal,” said Stephen Gillers, an expert of judicial ethics at NYU School of Law.
Judicial recusals over amicus briefs are rare. The governing rules of the Judicial Conference of the United States only provide for recusal when a judge owns stock in a corporation that is filing an amicus brief, or, in some cases, in the same industry as the amicus filer.
The Supreme Court is not strictly bound by these guidelines. Justices on the court police themselves, choosing when they recuse from a case. They do not always follow the same rules as the lower court judges who are required to recuse if they own even one share of a company involved in a case or a company filing an amicus brief.
The judicial disqualification rules, which do apply to Supreme Court justices, require justices to “disqualify [themselves] in any proceeding in which [their] impartiality might reasonably be questioned.” The standard governing this rule is whether a “a fully informed reasonable observer,” aware of all of the facts, would believe that a justice’s impartiality is in question, according to Geyh.
“The problem that we’ve got [with these amicus briefs] is that the interest is kind of attenuated,” Geyh said. “It’s not as direct as you normally see.”
And while the relationship between Crow, the National Multifamily Housing Council and its amicus briefs may not cross any legal ethical boundaries, the longtime and extensive financial relationship between Crow and Thomas colors it in an unkind light.
To sum up Crow’s largesse to Thomas and his family, the billionaire has: taken Thomas on a $500,000 vacation in Indonesia that made use of Crow’s superyacht and private jet; provided use of his private jet repeatedly over the past 25 years; welcomed Thomas every year at Crow’s summer home in the Adirondacks; invited Thomas to the all-male exclusive retreat Bohemian Grove; purchased Thomas’ ancestral home from the justice and his mother and paid for renovations while Thomas’ mother still lives there rent-free; donated $105,000 to Yale Law School for the Justice Thomas Portrait Fund; gifted Thomas a $19,000 Bible owned by Frederick Douglass and a $15,000 bust of Abraham Lincoln; provided $500,000 to fund a Tea Party group run by Thomas’ wife, Virginia “Ginni” Thomas, which helped pay her $120,000 salary; spent more than $2 million to finance a heritage museum at the site of a cannery where Thomas’ mother worked; and paid $150,000 to create a Clarence Thomas wing at Savannah, Georgia’s Carnegie Library.
“You combine all of these things together and you reach the point of saying, ‘This is troubling,’” Geyh said. “And you come back to the original question: Would a judge concerned about the ethics of behavior and concerned about the appearances of his behavior, would he get himself into a relationship of this kind to begin with that generated all of these ripple effects that you’re looking at?”
“From secret luxury travel to full on property sales, we know Justice Thomas scored big from his cozy relationship with conservative billionaire Harlan Crow,” said Kyle Herrig, president of Accountable.Us. “But now, we’re seeing just how Crow’s interests have gotten a boost from a friend on the nation’s highest court. Over decades, these two have maintained a highly problematic financial relationship that has facilitated what looks like corruption at the highest levels. Thomas, Crow, and everyone involved must be held accountable.”
Democrats in Congress have sought to require the Supreme Court to abide by the existing judicial code of conduct and impose new ethics requirements on judges, including in regard to amicus briefs. The number of amicus briefs has increased dramatically over the past decade, as corporate and partisan groups seek to influence the court. As the number of amicus briefs has grown, justices have increasingly cited those briefs in their decisions.
Sen. Sheldon Whitehouse (D-R.I) and Rep. Hank Johnson (D-Ga.) have introduced legislation to set disclosure rules and restrictions on filing briefs for those who provide gifts to any justice. That legislation would likely not apply to the National Multifamily Housing Council and its relationship with Crow.
Their Supreme Court Ethics, Recusal And Transparency Act would require disclosure of gifts provided to judges by amicus filers or their affiliates and would order the Judicial Conference to issue rules that would reject amicus briefs that could lead to the recusal of a justice based on a conflict of interest. None of these rules would appear to apply to a trade group whose members included companies owned by someone who provided gifts to a justice.
The Senate Judiciary Committee is expected to hold hearings on the bill in the wake of the revelation of Crow’s gifts to Thomas. The bill is unlikely to pass the Senate, due to the filibuster, or the House, where Republicans are in charge.