State Ethics Commission issues Notice of Hearing re COMPL-C-19-00336, Hawaii State Ethics Commission v. Tian Xiao

From Hawaii Ethics Commission, October 20, 2020

Charges filed by Hawaii State Ethics Commission January 16, 2020 (excerpts)

Respondent TIAN XIAO's Employment

12. Respondent XIAO, at all times relevant herein, was employed by the Department of Commerce and Consumer Affairs ("DCCA"), a state agency, as the Chief Examiner of the Insurance Division's Financial Surveillance and Examination ("FSE") Branch….

15. As the Chief Examiner, Respondent XIAO was, at all times relevant herein, responsible for overseeing FSE's financial audits and examinations of Hawaii domiciled insurance companies, agencies, health maintenance organizations, and mutual benefit societies.

16. At all times relevant herein, Respondent XIAO's duties and responsibilities as Chief Examiner also included selecting and hiring vendors to perform financial examinations on behalf of the Insurance Division.

17. On or about December 31, 2019, Respondent XlAO terminated his state employment with the Insurance Division.

Risk & Regulatory Consulting, LLC

18. At all times relevant herein, Risk & Regulatory Consulting, LLC ("RRC") was contracted by the Insurance Division to conduct financial and regulatory examinations of Hawaii-domiciled insurance companies, agencies, health maintenance organizations, and mutual benefit societies.

19. As Chief Examiner, Respondent XIAO was involved in the final decision to award the contract to RRC.

Acceptance of Gifts From a State Vendor; Gifts Reporting: Nobu Honolulu

20. In or around August 2018, Respondent XIAO was invited to dinner by Scott Eady, an RRC representative.

21. Respondent XIAO accepted the invitation and recommended Nobu Honolulu, a high-end restaurant in Honolulu.

22. Respondent XIAO and Respondent XIAO's wife subsequently had dinner with Eady at Nobu Honolulu on or about August 16, 2018. (Hereinafter, the meal at Nobu Honolulu, on or about August 16, 2018, shall be referred to as "the Nobu Honolulu meal.")

23. The Nobu Honolulu meal was paid for by RRC and/or Eady.

24. The total cost of the Nobu Honolulu meal for the three attendees- Respondent XIAO, his wife, and Eady- was approximately $500….

29. To date, Respondent XIAO has not filed a 2019 gifts disclosure statement to report the gift of the Nobu Honolulu meal.

Acceptance of Gifts From a State Vendor; Gifts Reporting: Restaurant Suntorv

30. On or about October 18, 2018, Respondent XIAO was invited to dinner by John Humphries, an RRC representative.

31. Respondent XIAO accepted the dinner invitation and joined Humphries and Humphries' wife at Restaurant Suntory on or about October 18, 2018. (Hereinafter, the meal at Restaurant Suntory, on or about October 18, 2018, shall be referred to as "the Restaurant Suntory meal.")

32. The Restaurant Suntory meal was paid for by RRC and/or Humphries.

33. The total cost of the Restaurant Suntory meal for three attendees- Respondent XIAO, Humphries, and Humphries' wife- was approximately $211….

37. To date, Respondent XIAO has not filed a 2019 gifts disclosure statement to report the gift of the Restaurant Suntory meal.

Acceptance of Gifts From a State Vendor: Flight Restaurant and Wine Bar

38. On or about July 22, 2019, Respondent XIAO was invited to dinner by Humphries and Eady.

39. At the time, Respondent XIAO was attending the Society of Financial Examiners conference in Memphis, Tennessee.

40. Respondent XIAO accepted the dinner invitation and had dinner with Eady, Humphries, and Humphries' wife at the Flight Restaurant and Wine Bar, in Memphis, Tennessee, on or about July 22, 2019. (Hereinafter, the meal at Flight Restaurant and Wine Bar, in Memphis, Tennessee, on or about July 22, 2019, shall be referred to as "the Flight Restaurant meal.")

41. The Flight Restaurant meal was paid for by RRC, Eady, and/or Humphries.

42. The total cost of the Flight Restaurant meal for four attendees- Respondent XIAO, Eady, Humphries, and Humphries' wife- was approximately $198….

Acceptance of Gifts From a State Vendor: Hihimanu Restaurant

44. On or about September 11, 2019, Respondent XIAO was invited to dinner by Eady and Sarah Donald, another RRC representative.

45. Respondent XIAO accepted the invitation and recommended Hihimanu Sushi, a high-end restaurant in Honolulu.

46. Respondent XIAO accepted the dinner invitation and had dinner with Eady and Donald at Hihimanu Sushi on or about September 11, 2019. (Hereinafter, the meal at Hihimanu Sushi, on or about September 11, 2019, shall be referred to as "the Hihimanu Sushi meal.")

47. The Hihimanu Sushi meal was paid for by RRC, Eady, and/or Donald.

48. The total cost of the Hihimanu Sushi meal was approximately $669.

Tian Xiao replied September 7, 2020:

I stated in my previous responses that the allegations are baseless and the process unfair. By terminating my employment at the Hawaii Insurance Department at the year-end 2019 without giving any reason at all, the State obviously has its prejudice against me. Verbally and in writing, I requested for reasons of sudden dismissal, but I was given none other and I was not alleged for any wrongdoing. I moved on with my life in main land and try to work for a couple of more years before retirement. To me, the so-called allegations are merely an effort to find an easy excuse justifying the wrongful dismissal. If there are allegations, should the allegations be fully investigated before rushing to judgment and action rather than the other way around. I've already suffered and continues to suffer from the consequence of their actions financially, mentally and reputation ally. I don't feel there is any justice in all of this at all.

Link: HAWAII STATE ETHICS COMMISSION VS. TIAN XIAO

SA: Retired state official to pay $5,000 fine for accepting $650 in meals at Honolulu restaurants