HONOLULU — State Rep. David Alcos has admitted that he failed to disclose numerous creditors and millions of dollars of debt owed to the Internal Revenue Service and others on legally required financial disclosure statements during his 2020 and 2022 campaigns.

What You Need To Know

  • As part of a resolution of the charge, the Hawaii State Ethics Commission fined Rep. David Alcos $12,500 and referred him to the speaker of the state House of Representatives for possible disciplinary action
  • Alcos, the Republican representative for House District 41, is running for re-election against Democrat John Clark III in the General Election on Nov. 5
  • Alcos’ disclosure statements in 2020, 2022 and 2023 listed Central Pacific Bank as a his only creditor and omitted numerous debts
  • In 2017, the IRS also issued separate liens against Alcos for unpaid taxes assessed against D.A. Builders in the amounts of $1.97 million and $60,322

The acknowledgement came during an investigation by the Hawaii State Ethics Commission for alleged violations of the State Ethics Code contained in Hawaii Revised Statutes Chapter 84.

As part of the resolution of the charge, the commission fined Alcos $12,500 and referred him to the speaker of the state House of Representatives for possible disciplinary action.

“Respondent Alcos’s omissions — including the amount and breadth of liabilities owed — were significant and could have made a material difference in two elections,” the commission stated in a resolution-of-charge document released on Wednesday. “The failure to disclose significant liabilities in his financial disclosure statements undermines public transparency and trust, as the public has a right to know about potential conflicts of interest that could impact a legislator’s ability to act impartially in the public’s best interest. The Commission is troubled by the number and amount of omissions, recognizing that the public had a right to question and understand the reasons for a significant number of creditors.”

Alcos, the Republican representative for House District 41 (Ewa Villages, Ewa Beach, Ewa Gentry, Ocean Pointe, West Loch), is running for re-election against Democrat John Clark III in the General Election on Nov. 5.

The Hawaii State Constitution requires that “all elected officers, all candidates for elective office and such appointed officers and employees as provided by law [shall] make public financial disclosures.”

Under state law, these disclosures must include reporting of all incomes of $1,000 or more received; the amount and identity of every ownership or beneficial interest held in any business having a value of $5,000 or more or equal to 10% of the ownership of the business; every officership, directorship, trusteeship or other fiduciary relationship held in a business; the name of each creditor to whom the value of $3,000 or more was owed; and other information.

As a candidate in 2020 and 2022, Alcos was required to file financial disclosures in those years. Having won the 2022 election, he is further required to file disclosures every year he is in office.

Alcos’ disclosure statements in 2020, 2022 and 2023 listed Central Pacific Bank as his only creditor and omitted numerous debts related to his construction business D.A. Builders, LLC, of which he is president and sole member.

As the resolution of charges notes, D.A. Builders is party to various lawsuits connected to disputes arising from the business’ work on the International Market Place in 2015 and 2016, for which it was not paid.

Among the debts Alcos failed to report on his 2020, 2022 and 2023 disclosures were a 2017 IRS tax lien of $58,851; a 2019 state Department of Taxation lien of $29,732; and stipulated judgement of 41,067 owed to Pacific Gypsum Supply from 2019.

Alcos’ disclosure statements in 2022 and 2023 also omitted Cades Schutte LLP, which represented D.A. Builders in several lawsuits dating back to 2016, as a creditor. As part of a promissory note and load agreement by D.A. Builders, the law firm claimed as collateral any proceeds obtained by D.A. Builders from its pending lawsuits.

Alcos also did not report debts from creditors that allege he is personally liable for debts incurred by D.A. Builders, including World Business Lenders, LLC, from which D.A. lenders obtained a business line of credit for $400,000. WBL is attempting to foreclose on property owned by Alcos in a pending lawsuit. In 2017, the IRS also issued separate liens against Alcos for unpaid taxes assessed against D.A. Builders in the amounts of $1.97 million and $60,322. In addition, the state DOT recorded a lien against Alcos for $1.76 million for D.A. Builders’ unpaid withholding taxes and general excise taxes. Alcos disputes each of the debts.

There were three other creditors that Alcos did not disclose in his filings but which Alcos voluntarily disclosed during the investigation: a stipulated judgment for $8,093 owed to Allied Building Productions Corporation; a default judgment of $45,318 owed to Bank of Hawaii; and another default judgment for $18,455 owed to A&B Properties Hawaii.

Alcos also voluntarily disclosed that he did not report his state salary as income on his 2023 disclosure form and did not disclose his ownership of D.A. Builders, LLC and D.A. Builders, Inc. on his 2020, 2022 and 2023 forms.

Alcos admitted to the commission that while he disputes some of the debts, he should have disclosed all of them to comply with the financial disclosure law.

In addition to the administrative penalty and referral to the speaker of the House, the resolution of charges also requires Alcos to amend his 2020, 2022 and 2023 financial disclosure statements.

Michael Tsai covers local and state politics for Spectrum News Hawaii. He can be reached at michael.tsai@charter.com.