Controversy Often Follows Far East Bank Chief Hwang

When Henry Hwang filed papers in Sacramento last month declaring his intent to run for California lieutenant governor in 1990, the flamboyant Republican banker was counting on quickly raising $1 million in political contributions and using his name recognition in the Asian community to bolster his first try for public office.

Soliciting large sums of money would pose no problem for Hwang, the wealthy 61-year-old founder and chairman of Far East National Bank who was thrust into the news recently because of his bank’s association with Los Angeles Mayor Tom Bradley. But Hwang (pronounced Wong) did not anticipate that his candidacy would generate little excitement among a number of influential Chinatown business leaders and fellow Chinese bankers.

Surprise Political Bid

“We were all shocked when he made that announcement,” said one respected Chinese businessman, who like several others agreed to discuss Hwang’s candidacy only on condition of anonymity. “He came to my office and asked for my support. I couldn’t be very enthusiastic. I won’t.”

Hwang’s political aspirations were dealt another setback last month when it was widely reported that he employed Bradley last year as a paid special adviser at a time when Far East held more than $1.5 million in city deposits. Bradley returned the money last month. But the mayor, whose financial ties with private industry are under investigation by the city attorney, has partly blamed the extensive pre-election publicity surrounding his relationship with Far East for the narrow margin of his mayoral victory on April 11. He won reelection to a fifth term with 52% of the vote.

Now Hwang, a longtime Bradley acquaintance and political supporter, has put his own campaign for lieutenant governor on hold and appears ready to drop out of the race as suddenly and mysteriously as he jumped in.

‘Not the Right Year’

“My understanding is that he is not interested in running for anything,” said political consultant Ron Smith, who said he recently met with Hwang on six occasions to plot campaign strategy. “I think he took a look at what it would take to successfully run, and I think he decided this was not the right year for him.”

Until questions surfaced about business dealings between the mayor and Far East, Hwang had kept a relatively low profile as a leading Republican Party supporter in Los Angeles and a highly successful banker. But, according to public records and interviews with business associates, Hwang often has found himself in the middle of controversy since he opened his bank in 1974 on the edge of Chinatown.

Hwang, an accountant, reportedly wooed a successful female executive to help obtain his bank charter, then dismissed her shortly after Far East began operations. Hwang then fired two presidents within 18 months. In 1976, Hwang gave $300,000 of bank funds to a robber who kidnaped him and forced him to drink a substance that rendered him incoherent, he told police. And, with Bradley’s help, Hwang pushed city officials in 1982 to award his bank a long-term lease at $9,000 per month under market rates. The City Council voted against the lease.

Hwang has refused repeatedly over the last month to be interviewed about his political aspirations or his relationship with the mayor. He also declined to be interviewed for this story.

Henry Yuan Hwang was born in Shanghai and attended Taiwan University. At 21, he came to the United States in 1948 as the Communists were preparing to overtake his native city. He attended USC as a business student between 1951 and 1956, but did not graduate, according to university records. While a student, Hwang met his wife, Dorothy, an accomplished pianist who teaches music at USC, friends said.

The Hwangs have a son, David Henry, the playwright who last year became the first Asian-American to win a Tony Award for his Broadway play, “M. Butterfly,” and two daughters--Mimi, a professional cellist with the Franciscan String Quartet and Grace, an Alhambra elementary school teacher.

Described by acquaintances as an outgoing, flashy entrepreneur who relishes the limelight and boasts of wearing $1,500 suits, Hwang drives a 1989 BMW 750 with personalized license plates “FENB” for Far East National Bank. His wife drives a 1986 Mercedes-Benz with license plates “MRS FENB.” They live in Pasadena in a sprawling 4,700-square-foot home valued at about $1.2 million.

Success Story

According to friends, Henry Hwang never tires of telling business associates and acquaintances how much he appreciates the opportunity to immigrate to the United States and become a successful businessman. His license plate frame says “I love USA” and his bank’s current annual report is entitled “Fulfilling the American Dream.”

“Today, we thank our national America--the land of freedom and opportunity for all. Let us not take her for granted,” the annual report says. “More emphasis should be given to the red, white and blue without which we will be on a sunken ship.”

To further these ideals, Hwang decided to run for lieutenant governor.

“Here he came to the United States without a penny, he has been successful and he thinks it is because of the American economic system,” said Smith, the political consultant. “He wanted to give some of it back by serving in public office. I was a little skeptical when I first heard that. But I talked to him, went to his home, met his wife and family and I really came to believe that was absolutely his only purpose.”

While many Asian-Americans in California welcomed Hwang’s candidacy, several prominent Chinese business leaders in Los Angeles who knew Hwang were less enthusiastic.

They said that Hwang suddenly began soliciting political and financial support from members of Chinese business clubs whose memberships and meetings he had ignored for years. Hwang serves in many volunteer organizations, including the Greater Los Angeles Boy Scouts, Los Angeles Beautiful and the Claremont University Center Board of Fellows, but few are devoted exclusively to the Asian community. For example, Far East is the only local Chinese bank that did not support the 12th World Chinese Banking Amity Conference in Los Angeles last August and one of few that does not belong to the National Assn. of Chinese American Bankers, banking sources said.

“We feel we have a unique situation and there is a special need for us to use our talents to help the Chinese community and help small businesses,” said one Chinese business executive. “In certain ways, Henry has ostracized his colleagues.”

Hwang started in business by becoming a certified public accountant and opening a firm that catered to the growing Asian community in the San Gabriel Valley.

In the early 1970s, Hwang became interested in opening a bank to better serve the growing Chinese community in Los Angeles. But Hwang had difficulty obtaining a California charter because state banking authorities believed that Chinatown had too many financial institutions, said Gerry Findley, dean of California banking consultants who joined Hwang to organize Far East.

Findley said he and Hwang applied for a national bank charter and lobbied regulators by arguing that Far East would have a woman, Rosa Leong, as its chairman in a male-dominated field and that it would specialize in serving Mandarin-speaking customers. Hwang and Leong speak Mandarin.

Within months of obtaining the charter, Hwang dismissed Leong and the bank never specialized in serving the Mandarin-speaking community, said Findley and other banking sources. Leong, who owns Wilshire Center Bank, confirmed the details of her dismissal, but declined to comment.

‘At an Angle’

“I felt (Hwang) took unfair advantage of her,” Findley said. “I’ve always said that, in my opinion, Henry is aggressive. He comes at you not straight on, but at an angle.”

Hwang in an interview for a story in The Times several years ago characterized Findley’s role in the beginning phases of Far East as “unethical.”

In 1976, banking regulators and police investigators began looking into Hwang’s role as a victim in the kidnap case he reported.

Hwang told police that a man accosted him in his accounting office in El Sereno and took him at gunpoint to a hotel, where the man forced him to drink a substance from a glass that left him confused. Hwang said the man then forced him to call a bank cashier at Far East and tell him to get $300,000 in cash.

The cashier reported handing the money to Hwang in the lobby of a downtown hotel, police said at the time. Hwang later told investigators at police headquarters that he could not recall giving the money to his abductor or anything else about the incident. The bank confirmed the cash was missing.

Last week, a Los Angeles Police Department spokesman said the episode remains as much a mystery today as it was 13 years ago.

“The case was never solved,” said Officer Don Laurence. “No suspect was ever identified, no suspect was located, and no suspect was interviewed.”

By the time of that incident, Hwang had developed a reputation in banking circles as a maverick. He had fired two presidents--both professional bankers--within two years of opening Far East.

Asked at the time why he fired the presidents, Hwang said: “They were bankers. Isn’t that enough? I don’t like bankers. They tend to be snobby, and they’re always playing games--like bureaucrats.”

Turned Bank Around

Hwang was appointed president in April, 1976, and within two months Far East was operating in the black for the first time since the bank opened in 1974.

Hwang accomplished this turnaround by slashing expenses and offering exclusive services to his customers. At a time when “bankers’ hours” meant short work days, Hwang kept Far East open on evenings and Saturdays.

“Henry doesn’t become successful by imitating other people,” said Glenn Yee, president of Eastern Savings in Alhambra and a former top executive at Far East. “He is an entrepreneur. Henry always believed in looking for a better way to serve the customer and in the same process make some money.”

Far East, which began in 1974 with deposits of $4.6 million, reported total earning assets of $176 million last year. It is one of several minority-owned banks that hold city deposits, in keeping with city policy.

Hwang has become increasingly active in supporting candidates for political office while his bank has solicited deposits from local and federal governments, according to banking sources.

Records show that Hwang has contributed generously to the campaigns of several politicians, including at least $16,000 to Mayor Bradley since 1980. With Bradley’s help, Hwang tried unsuccessfully to secure a long-term property lease from the city in 1982 at favorable rates.

For the first eight years, Far East paid between $220 and $440 per month--amounts that were determined inadequate by a city attorney report--for city-owned land in Chinatown at Sunset Boulevard and North Broadway. In 1982, Far East and the city’s General Services Administration drafted an agreement for a 30-year lease at $3,500 a month, despite a Public Works Department appraisal that the fair market rent was $12,500.

Records show that Bradley lobbied the City Council to approve the lower rent. The mayor wrote the council that he believed “the terms which have been negotiated are reasonable.” But the proposal failed to win council approval.

At the same time Bradley pushed the Far East proposal, the City Redevelopment Agency began depositing tax revenues from its Chinatown redevelopment project into Far East. The deposits gradually increased to $840,000 in 1986 and were at $525,000 a year ago when Bradley became the bank’s paid special adviser.

Last month, Bradley announced that he had returned $18,000 in advisory fees to Far East when he learned the city treasurer’s office had put investments of $1 million in the bank. The deposit was doubled to $2 million in March when Bradley--after fielding a call from Hwang--contacted the city treasurer and discussed the city’s investment policy. Bradley said he called the treasurer to inquire whether the city had a relationship with Far East and not to pressure the city treasurer.

Bradley has said that he was unaware of both city deposits because he was assured by bank officials that Far East had no city business last year when he agreed to serve as a paid adviser.