On September 25, 2005, President Bush nominated Judge Payne to a seat on the United States Court of Appeals for the Tenth Circuit vacated by Judge Stephanie Kulp Seymour, who took senior status on October 16, 2005. On January 23, 2006, Will Evans of the Center for Investigative Reporting published an article in the online magazine Salon.com reporting that Judge Payne "had issued more than 100 orders in at least 18 cases that involved corporations in which he owned stock", according to review of court and financial records. Required to file annual financial disclosure forms, judges are expected to regulate themselves. Most district courts have computer systems designed to help monitor such conflicts of interest, but judges must enter their financial information and use it. The clerk's office of neither the Northern nor Eastern District Courts participate in monitoring, as this office does in some other courts. The article noted that Payne had apparently violated federal law and the official Code of Conduct for U.S. judges, which "explicitly prohibit judges from sitting on cases involving companies in which they own stock—no matter how small their holdings". This prohibition, established as federal law in 1974 by Congress after the Watergate scandal, is intended to uphold the integrity of the judicial system. Scholars of legal ethics such as professor Leslie W. Abramson, of University of Louisville's law school, and Stephen Gillers, of New York University School of Law, noted that the law was clear and that the judge should have recused himself from these cases where he had a conflict. Professor Steven Lubet, of Northwestern University School of Law, by contrast characterized Payne's actions as "careless mistakes" that were not very significant in terms of the cases or his career. Some lawyers in Oklahoma praised Payne's integrity, and said that most of his actions were "routine and procedural." But some plaintiffs were unhappy to learn of his conflict of interest while presiding over their cases. According to available financial records, which dated to 1999, Judge Payne also had participated in cases in which he held stock in affected companies while he was serving as a magistrate judge in the Eastern District Court of Oklahoma. This information was not discovered during the review of his nomination as a federal district judge to the seat for the three districts in Oklahoma. As a result of the Salon article and questions raised, the American Bar Association on February 21 re-evaluated Judge Payne's nomination and downgraded their original judicial rating of him from "well qualified" to "qualified". In addition, the Senate Judiciary Committee and the chief judge of the 10th Circuit said they would investigate Payne's record further. While saying the "allegations were without merit", Judge Payne withdrew his nomination on March 8, 2006. He offered no further response to the article and refused to respond to the reporter seeking comments. He wrote to President Bush saying that he needed to oversee renovation of information technology systems of the District Courthouse in Muskogee. The allegations concerning financial conflicts of interest created the appearance of "extraordinary circumstances", which would have prevented his confirmation under the terms of the Gang of 14 deal. On May 4, 2006, President Bush nominated Jerome A. Holmes for the position at the Appeals Court. Holmes was confirmed by the Senate less than three months later.
