Director With Felony Record Asked to Quit
A dissident Sun Savings & Loan Assn. shareholder on Wednesday called for the resignation of director Tad Fujita after learning that Fujita was convicted of two felonies in 1973 as part of an alleged $10,000 payoff for an agricultural lease in Orange County while he was city planning commissioner of Westminster.
Dissident shareholder Robert Blake, in a telegram sent to the S&L;’s board, asked Sun officials to hold a special board meeting to “immediately remove Fujita and investigate other members of the board who may have known about this.”
Federal and state laws prohibit a convicted felon from serving as a director or officer of a savings and loan. Specifically, federal regulations state that “a person cannot serve as a director, officer or employee of (a federally) insured institution who has been convicted . . . of a crime involving dishonesty or breach of trust.”
State law is similar, except that it does not prohibit such persons from becoming employees of the company.
Fujita, owner of Fujita Farms in Westminster, would not comment on Blake’s call for his resignation nor on his prior criminal records.
However, Al Stokke, the attorney who defended Fujita during a 16-day trial in May and June, 1973, said that a questionnaire Fujita completed for regulators only dealt with convictions “in the past five years . . . and he answered that truthfully.”
In addition, Stokke said that Fujita’s criminal record has been expunged.
Fujita joined the board of Seaside Savings & Loan Assn. of Mission Viejo in 1982. Later that year, Seaside was acquired by the San Diego-based Sun and Fujita and two other Seaside directors became members of Sun’s board.
Stokke did not specify which questionnaire Fujita completed, although state authorities said that he might have filed a “biographical form” when Seaside merged with Sun in late 1982.
Typically, federal regulators require such questionnaires only from founding directors, which would not include Fujita. Until last month, state authorities also usually asked for “biographical sketches” only from founding directors. (State Savings & Loan Commissioner William J. Crawford in June amended that rule and ordered that new directors of existing S&Ls; also be required to complete such questionnaires.)
No 5-Year Limit
Neither federal nor state regulators place a five-year limit on the conviction disclosures, authorities said Wednesday.
In fact, the ninth question on the state’s biographical form reads: “Have you ever been convicted or entered a plea of nolo contendre for any violation of law (other than a minor traffic violation)?”
“The code doesn’t mention a five-year limitation or expungement,” said one state savings and loan regulator. “We’re very interested in this case and how it got by us.”
Blake said he met last week with federal regulators about the status of Fujita’s directorship and that he plans to inform the U.S. Department of Justice and the state Attorney General’s office.
State regulators and prosecutors already are investigating Sun and allegations of improper financial activities by ousted Chairman and Chief Executive Daniel W. Dierdorff.
A Sun official said late Wednesday that he had not yet seen Blake’s telegram, but “considers this a serious matter.”
‘Sun Will Cooperate’
The board “will give it the attention it merits and Sun will cooperate with regulatory agencies in this matter and take those actions which we deem . . . appropriate,” said John Grosvenor, Sun’s executive vice president and general counsel.
Technically, only shareholders can remove a director, he said.
Fujita was city planning commissioner in Westminster in 1973 when he and a former mayor were indicted on five counts of conspiracy to commit grand theft, attempted grand theft, conspiracy to offer a bribe and soliciting a person to offer a bribe in connection with an agricultural lease of Orange County land in 1972.
Authorities accused Fujita and former mayor Derek McWhinney of trying to obtain $10,000 from a farmer in exchange for a renewal of his lease on 213 acres in Mile Square Regional Park in Fountain Valley.
They were convicted of only the first two counts. Fujita served 80 days in an Orange County Jail work-furlough program and was placed on three years probation. McWhinney served 10 months in custody.
In the past two weeks Sun, with four offices in San Diego and one in Mission Viejo, announced two bold efforts to boost its sagging net worth and help it return to profitability: a $12 million loan swap with a Seattle S&L; and a $7.2 million capital infusion from public and private stock offerings.
