Serving on Board of Directors of Nonprofit Publisher
September 20, 2001
CJE Opinion No. 2001-11
You have asked for an opinion on the question whether your service on the board of directors of a nonprofit corporation whose primary purpose is the publication of a weekly town newspaper would conflict with the Code of Judicial Conduct.
The weekly newspaper is delivered free to town residents. The corporation's income is generated from advertising, nonresident subscriptions, donations, fund-raising, and investments. In its fiscal year 2000, the corporation had revenues of $129,530.00 from advertising, $2,047.00 from nonresident subscriptions, $27,247.00 from donations, $2,527.00 from fund-raising, and $6,610.00 from investments. The corporation has cash reserves of $150,000. The corporation leases space donated at below market rates to house its editorial rooms.
We focus our response on Canon 5.
Canon 5(B) states that a judge "may serve as an officer, director, trustee, or nonlegal advisor of an educational, religious, charitable, fraternal, or civic organization not conducted for the economic or political advantage of its members" provided that (1) the organization is not likely to be regularly engaged in adversarial judicial proceedings, (2) the judge does not participate in fund-raising activities, and (3) the judge does not give the organization investment advice.
Canon 5(C)(2) states that a judge should not serve as an officer, director, manager, advisor, or employee of any business.
We concur with your view that the corporation seeking your involvement is not likely to be regularly engaged in adversarial judicial proceedings and we understand that you have made it clear that you will not participate in fund-raising activities of the corporation and will not give the corporation investment advice. The remaining issue under Canon 5 is whether the corporation is a charitable or civic organization under Canon 5(B) or a business under Canon 5(C)2.
The corporation is a tax-exempt organization and is recognized as a public charity under Internal Revenue Code Section 501(c)(3). The Committee's view, however, is that the corporation's tax designation, while pertinent, is not conclusive with regard to the classification of the corporation under the canons. The Supreme Judicial Court has decided that a judge's behavior as an executive officer of a nonprofit charitable corporation violated the prohibition in Canon 5(C)2 against service as an officer, director, manager, advisor, or employee of any "business." (In the Matter of Robert M. Ford, 404 Mass. 347, ) This Committee, in Opinion 98-7, recommended that a judge not serve on the board of directors of a non-profit corporation operating a golf course. We found that the operation of the golf course had more of the elements of a business than of a charitable or civic activity.
The corporation at issue in your inquiry publishes a weekly town newspaper which, by all appearances, is not unlike other local for-profit town newspapers. The newspaper keeps its readers informed about local events and advances communication within the town. The paper includes numerous advertisements from local businesses, real estate firms and professionals, including doctors and lawyers. It prints schedules of events, summaries of events, feature articles, birth and death notices, police logs, letters to the editor, and other items typically found in local newspapers. It has a weekly editorial. It offers subscriptions for a fee to nonresidents. Although the newspaper is distributed free to town residents, it generates most of its revenue from business advertisers who, we presume, are aware that the paper will reach every household in the town, which makes the newspaper an attractive advertising vehicle. Most of the newspaper's operating revenue comes from advertising.
The uniqueness of this particular community newspaper is not such that we, as a Committee, place it outside of the category known as the newspaper business. We are aware that the newspaper is not operated to turn a profit for the benefit of those involved, and that, like most newspapers, it performs an important public service. However, it is, in this Committee's view, a nonprofit business falling within the preclusive reach of Canon (5)(C)(2).
Our advice, therefore, is that your service as a member of the board of directors of the corporation which publishes the newspaper is precluded by the Code of Judicial Conduct.