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Judge didn’t report
many of his wife’s
business ties
David Fong says some
By Ian Lind
omissions are oversights by
him and some of her job
titles are misleading
Star-BulletinIt took three years for District Judge David L. Fong to publicly disclose his wife's 1991 purchase of a Sheridan Street building on the financial statement he filed annually with the Supreme Court.
The deal established his wife, Connie Yon Fong, as landlord for several hostess bars that were later accused of prostitution and drug dealing.
The delay in reporting is being examined by the Commission on Judicial Conduct after a Star-Bulletin story about the building.
But the transaction is just one of several delays and omissions in Fong's annual financial statements involving interests held in his wife's name. Under court rules, judges are required to disclose relevant interests held by themselves, a spouse or dependent child.
Fong took another three years to disclose his wife's 51 percent interest in Liquor License Specialists Inc., formed to take over his former business as consultant and agent for bars and nightclubs, records show.
Other financial interests which have not been publicly disclosed, including $1 million in loans made to liquor-related businesses, are revealed in court records, documents filed at the Bureau of Conveyances, Liquor Commission files and state business registration records.
Fong says these unreported interests are immaterial, exempt from disclosure or nonexistent.
Connie Fong has declined to comment.
Legislators and public employees have been required to submit annual financial statements since 1972. The reports of elected and appointed officials were opened to public inspection following a 1978 amendment to the state Constitution. The reasons for requiring financial disclosure by judges and other public officials was described by Congress when it adopted similar federal requirements the same year.
The aims of financial disclosure, Congress said, are to enhance public confidence in government by deterring and detecting conflicts of interest, discouraging individuals with questionable sources of income from entering government, demonstrating the high level of integrity of public officials and employees, and facilitating public appraisal of an official's performance in light of personal and family financial interests.
The Hawaii Supreme Court began requiring financial reports by all judges in 1989.
Judges must report all income for services rendered, business interests, real property, debts, and similar matters, and may be disciplined for filing a late or incomplete statement.
But while the state Ethics Commission conducts random audits of financial reports of legislators and other officials, financial statements submitted by judges are filed and forgotten.
"Unless somebody refers the matter to the Commission (on Judicial Conduct), we don't know what's being filed," Chairman Gerald Sekiya said earlier this year. "We don't look."
Judge Fong's missing items include:
Liquor License Specialists Inc.: Fong prepared and submitted legal papers to create the company in September 1996, but it did not appear on the financial report he filed several months later. It was not publicly disclosed until April 28, 2000, following questions from the Star-Bulletin.
No income from the business has been reported.
"That (1996) was the year I got out of private practice and came over here (to District Court)," Fong said.
"It just went right by me that she had that in there. I have amended it since because I realized it should have been disclosed," he said.
Connie Fong was also president and 51 percent owner of Su-Con Investment Corp. when it was started in 1995, and has been listed every year since as the company's sole officer and director, state records show.
Articles of incorporation for both companies were prepared and filed by David Fong, state records show, but the judge says he has no recollection of them.
Fong said they were probably "shell" corporations.
"My wife may have had a share interest, an officer or director position when it was originally filed," Fong said. "But by the time the corporation was actually used to acquire any property, she was not involved at all, to the best of my knowledge at this point in time."
In February 1998, Connie Fong also registered with the Liquor Commission as an employee and one of 15 registered managers of Maxwell Inc.'s Casa Uno hostess bar, later known as Club Diana. Commission records indicate she took a required commission class, and remained on the bar's employee list through 1999.
Judge Fong said he was unaware of the listing, but said it was a mistake.
"If she is listed there, it's an error, an oversight. She does not work there, she hasn't worked there," he said.
In a 1997 lawsuit, Fong claimed she had entered into an oral and unwritten partnership agreement the previous year to develop and manage the Kapiolani nightclub then known as Juliana of Honolulu.
Fong loaned her partners more than $515,000 for renovations and start-up costs, the suit alleged.
Fong won the case and a judgment for $475,637.54 after her partners -- New Pacific Inc.; Yong Sang Kim, sole stockholder and officer of New Pacific; and Chang Chin Kim -- acknowledged the deal and their debt.
Not so, said Judge Fong.
"There is no partnership interest, there never was any partnership interest, notwithstanding what her attorney may have said in the complaint," David Fong said.
This does not mean false claims were presented to the court, Fong said.
"I'm not saying it was false," Fong said. "I'm saying she didn't have a partnership interest, but it was something that was pled as part of a strategy her attorney concocted."
David Fong said these weren't disclosed because they are not "ownership interests."
But judges must also disclose any "beneficial interest" in a business worth over $5,000 or making up at least ten percent of the business, according to court rules.
The term, "beneficial interest," is not defined in the rules, but state ethics law contains a similar provision, according to Ethics Commission Executive Director Dan Mollway.
"Aside from an ownership interest, we're talking about another kind of interest where you have a right to something of value," Mollway said.
Mollway said loans, notes, judgments and similar items that entitle the owner to payments or something of value appear to be beneficial interests that should be reported, although the question has never come up directly for an ethics ruling.
The Commission on Judicial Conduct may decline to take any further action if it finds the errors or omissions were "inadvertent or in good faith" and any deficiencies were "promptly corrected" after being called to the judge's attention.
If it finds grounds for disciplinary action, the commission can recommend penalties ranging from a private reprimand to suspension, retirement or removal. The Supreme Court would then consider those recommendations and take final action.
