A Honolulu District Court judge and his wife profited from high rents paid by hostess bars that were accused of drug dealing and prostitution.
But the judge, David L. Fong, said he was unaware of alleged criminal activity in a building that his wife, Connie Yon Fong, bought and managed from 1991 until 1998.
The couple's role as landlords for several hostess bars strains the limits of appropriate judicial conduct, according to one community leader.
"It's an open secret what a shabby business this is," said Kapiolani-area resident Jim Becker, who has organized neighbors to testify against additional bars in the area. "The whole thing is unsavory, and to think of someone in a position like that being involved shocks me."
Connie Fong signed an agreement of sale to buy the building at 818 Sheridan St. in November 1991 and began seeking hostess bars as tenants.
David Fong, then a part-time judge with his own private law practice, also moved into the building, and he and Connie shared an office on the second floor.
Allegations of drug dealing arose less than a year later when the victim of a shooting in the building told police that Club Chateau, where the shooting occurred, was being used for the sale of drugs, according to police reports of the incident that were later filed in court.
Fong dismisses the charge.
"People make all kinds of allegations, all the time," Fong said.
"I was never notified of any kind of illegal activity. Nobody ever inquired of me. I was never aware of anything illegal," he said.
In late 1994, two cocktail waitresses were arrested on prostitution charges after allegedly soliciting undercover police officers in the New Secret, also located in the Fongs' building.
Charges were dropped against one woman when the arresting officer failed to appear in court, and the second woman was granted a deferred "no contest" plea, which meant the conviction was removed from her record after six months.
Fong wasn't involved in their criminal cases, but did represent the New Secret in March 1996 after the bar was cited by the Liquor Commission for failing to prevent prostitution and allowing sexual contact between customers and employees.
Another prostitution arrest at the New Secret in 1995 resulted in a conviction. The Liquor Commission also received complaints about prostitution, drugs and gambling at the building during the years it was owned by the Fongs. Those complaints were generally forwarded to police, and records do not indicate whether any action resulted.
For example, an anonymous female caller complained to a Liquor Commission hotline in 1996 that the owner of New Secret was "forcing her female employees to provide sexual favors for cash," records show.
In another instance, a local businessman told police he had been approached by hostesses and told "if I buy them champagne or spend money on them, that I could take them home for the purposes of sex," records show.
Fong said he was unaware of the allegations made to the Liquor Commission against the bars.
"They don't tell the landlord. If they've got a complaint, they go in and investigate, and if there's something going on they'll bust them. The landlord doesn't get involved at all."
Fong represented a third bar in the building that was cited and fined repeatedly by the Liquor Commission for allowing female employees to drink with customers, hiring unregistered employees and being open after legal hours.
"We would be down there yelling and screaming at them, telling them, 'you can't do this,' " Fong said. "I did my best to tell them that."
But Fong acknowledged that no tenant had ever been thrown out for being undesirable.
"We didn't evict anybody for liquor license violations. We evicted people if they didn't pay their rent," Fong said. Fong says there was no appearance of impropriety on his part.
"What did that have to do with me?" Fong responded, when asked about the prostitution arrests.
Code of Judicial ConductJudges and their immediate families are not prohibited from having outside business activities, but the Code of Judicial Conduct requires they avoid interests that might "demean the judicial office," or interfere with judicial duties.
"A judge must expect to be the subject of constant public scrutiny," the code states, and must "avoid impropriety and the appearance of impropriety" in all activities.
Judges must also avoid financial and business dealings "that would reasonably appear to exploit the judge's judicial position" or involve relationships with people likely to appear before the judge or other judges on the same court.
Fong said he has recused himself when any matters involving businesses linked to his wife came before his court.
"I'm not aware of ever, or in any capacity, making a decision on any case where my wife had an interest or used to have an interest," Fong said. "I will not compromise my position."
Fong also said his wife's clients have no reason to believe they can get any indirect benefit from his judicial position.
"I have never, ever told anyone that I could help them out of any criminal-type action that involved District Court. I never told anybody that," Fong said.
Gerald Sekiya, chairman of the Commission on Judicial Conduct, said he could not comment on Fong's financial interests. Sekiya said questions about such matters are rare, and have not come up since he joined the commission in 1993.
Fong, 55, was appointed a part-time, or per diem, judge in 1981. He is currently chairman of the Hawaii State Trial Judges Association, and an ex officio member of the Hawaii State Bar Association board of directors.
Until he became a full-time judge in 1996, Fong had an outside law practice specializing in liquor cases.
"Liquor-license law was my bread and butter," Fong said. "I don't consider it unusual. It was an area I practiced law in."
In his law practice and business, Fong and his wife have helped clients purchase, operate and later sell hostess bars, nightclubs and other liquor-related businesses. They have represented bars in Liquor Commission proceedings, defended them when cited for violations ranging from after-hours drinking to prostitution, and even made loans to several bars totaling more than $1 million.
Liquor License Specialists Inc., a company founded and co-owned by Connie Fong and the judge's former secretary, has continued to represent bars in liquor-related proceedings since Fong was named to a full-time judicial position and closed his private law practice in 1996.
Not 'sleazy' hostess bars"If you're saying that because these are hostess bars, there's something sleazy about them, and there's some impropriety because I'm sitting as a judge, I don't agree," David Fong said.
Connie Fong declined to be interviewed, and her attorney, Keith Kiuchi, referred questions about her business activities to Judge Fong.
Fong says he saw the purchase of the Sheridan Street building as a good business decision.
"We had an opportunity to acquire a building in an area where there was a high concentration of that type of operation, and we saw an opportunity to go ahead and become landlords for this type of operation, for which I had a lot of knowledge," Fong said.
"The leasehold interests were lucrative," he added. "I think we were getting about $4 a square foot, with roughly 10,000 square feet downstairs."
For three years, Judge Fong kept quiet about the 1991 purchase of the building, records show.
Although Connie Fong immediately began signing subleases as owner of the building, the agreement of sale was not recorded at the Bureau of Conveyances, and her interest in the building was not included on annual financial disclosure reports that all state judges are required to file.
The purchase was not recorded until October 1994, and was reported by Judge Fong in February 1995, records show.
The Fongs sold the building in mid-1998. According to documents filed with the Bureau of Conveyances, they bought the leasehold interest in the building for $282,000 and sold it for $550,000.
In an interview last month, Fong continued to deny any ownership interest in the building prior to 1994, and said his wife had simply been managing the building for the prior owner.
"She was not the owner at that time," Fong said. "She was working at that time for Security Construction, which did own the leasehold to the building, and she may have signed some leases to that effect."
But records filed in a Circuit Court lawsuit, including copies of the agreement of sale and a sworn affidavit signed and notarized by Connie Fong, show the building was purchased effective Nov. 1, 1991.
Judge Fong said later that the three-year delay in reporting was justified because "we didn't actually acquire title until we satisfied the agreement of sale in 1994."