Frank Hoover Easterbrook

Gift — Union League Club of Chicago — Signing PY

Agreement — 7] —— st a «0 : = N.. 3

1.

(Part III): I have received the approval of the Chief

Judge to teach at the University of Chicago. This income

therefore is

“outside earned income”

rather than an

“honorarium” within the meaning of the Ethics Reform Act of

1989. I accepted gross income exceeding the statutory cap

{15% of Level II of the Executive Schedule} because,

under

§3(b} of the regulations of the Judicial Conference

“outside earned income”

includes

implementing this statute,

only net taxable income,

and therefore

excludes pension

contributions as well as the “ordinary

and necessary

this income.”

Some

expenses paid or incurred in producing

a

of the income reported in Part III was

contributed to a

pension plan through the University of

Chicago as part of a

salary reduction plan and therefore does not count for

statutory purposes. Moreover, the ordinary and necessary

expenses of producing the income—including the cost of

commuting between the courthouse and the Law School, fees

for parking at the University, and the expenses of

equipment and books for my Law School office-—are

substantial. Net taxable income is less than the statutory

maximum.

2.

{Part Vv} The Union League Club extends to federal

judges

the privilege of using the Club's facilities without

formal

membership. Between January and June 2003 it charged

545

per month for these privileges; the charge increased

to $55

monthly effective July 2003.

The difference between

this

and the market value is a gift, but whether there is

any

difference and, if so, its size, is difficult to determine.

Judges pay the same for meals,

haircuts, and other services

as do regular members of the Club.

3.

(Part VII): Dividends and capital gain distributions

from the mutual funds marked

#See Part VIII”

are reinvested

automatically monthly. Shares were purchased and sold in

the Vanguard Money Market Trust occasionally.

I treat this

as a checking account,

and as in past years I do not report

these flows {as opposed to year-end balances). Sales of

shares from the Vanguard Municipal Bond Fund in 2003 fall

into value code XK, and sales of shares from the Vanguard

Index Trust fall into value code X.

4. (Part VII): While I was employed full-time by the

University of Chicago preceding my appointment to the

court,

and again since 1892, pension contributions under a

defined contribution plan were made on my behalf. TIAA-CREF

holds the funds contributed before 1983 (value code M).

Pension contributions

wed

= mde

nce 1983, and supplemental

retirement annuity contributions since 1982, are held by

the Vanguard Group, which also holds pension contributions

made on my behalf during 1981-84 by Lexeccn Inc., plus