Offices at airport raided in kickback investigation

By Jim Dooley
Advertiser Staff Writer

In coordinated raids yesterday, state investigators searched the offices of two state airport officials, seizing what they believe may be evidence of a cash-for-contracts kickback scheme at Honolulu International Airport.

Among the items taken from the airport yesterday were wooden planter boxes that cost the state $14,350 for four, a price $10,000 higher than investigators believe the state should have paid. Richard Ambo • The Honolulu Advertiser

Donald Wong, chief investigator for the state attorney general's office, said his office "is looking into allegations of forgery, conspiracy to commit theft, theft and bribery related to small purchase contracts" issued by the state Department of Transportation's airport division.

Hirokawa and Okada denied wrongdoing when interviewed last month by The Advertiser. Both men are on two weeks' leave and could not be reached for comment yesterday.

Investigators seized records dating to 1995 from the offices of both men. Other items taken were a dozen wooden planter boxes manufactured by a private firm for the airport. Records show that just four of the simple, rectangular boxes cost the state $14,350 — a price investigators believe to be inflated by at least $10,000.

Several airport officials, including O'ahu District Airports Manager Stanford Miyamoto, voluntary gave investigators laptop computers and documentation to aid in the probe, and authorities said those officials are not targets of the investigation.

The Advertiser reported earlier this month that the investigation centers on small construction and repair contracts awarded to a select group of contractors at Honolulu International Airport.

The contracts, worth less than $25,000 each, are awarded in an informal process, usually via telephone bids.

Two construction firms, MF Masonry Inc., and Wes' Contracting, have been landing the majority of the contracts since Hirokawa became maintenance supervisor three years ago, according to sources close to the investigation who asked not to be identified because the probe is continuing and they have been asked not to discuss it publicly. One of the firms allegedly received more than $3 million in jobs in one year.

Michael Furukawa, president of MF Masonry, declined comment.

"My lawyer told me not to say anything," Furukawa said.

The wooden planter boxes authorities confiscated yesterday were made for the airport by a private company. Richard Ambo • The Honolulu Advertiser

State business records show that Furukawa and Uemura are partners in a third firm, Gothic Builders Inc. It's unclear whether that company received any airport work.

"We're executing search warrants, looking at some state offices, taking documents concerning maintenance-type of work," Wong said. Whether arrests are made "depends on what we find in the searches," he said.

He referred further questions to acting Attorney General Rick Keller, who declined comment.

Under state procurement law in effect until last October, construction jobs worth less than $25,000 are awarded under informal bidding procedures intended to simplify and speed up the process of getting the work done. At least three contractors are contacted by telephone and asked to submit price quotations for the small jobs. The lowest qualified bidder is supposed to get the work.

Some contractors are alleged to have conspired with one another and with state personnel in submitting inflated bids for airport work, the sources said. There is evidence that unacceptably high bids from nonexistent or unwitting companies were inserted into state files to justify the award of contracts to favored firms, those sources said.

Some winning companies or their subcontractors allegedly kicked back cash, food, free home repairs, airplane tickets, sporting event tickets and political contributions to state workers, according to the sources.

Okada of the Visitor Information Program is the son of Hideo "Major" Okada, a longtime Hawai'i labor leader and influential Democratic Party leader from Waipahu who died in 1983.

Interviewed briefly late last month, Richard Okada acknowledged knowing airport maintenance supervisor Hirokawa but said he had no personal involvement in construction contract awards at the airport and was not involved in kickbacks.

"I'm surprised that my name came up," Okada said. "I have no knowledge of that at all."

Hirokawa also told The Advertiser late last month he was unaware of an investigation and knew of no problems in the small contract award system.

"It's supposed to go to the lowest bidder," Hirokawa said.

Records show that some small jobs, such as filling a foot-long crack in concrete flooring with epoxy, cost the state as much as $8,000 when the work should have cost no more than a few hundred dollars, the sources said.

And records indicate that small repairs were made in separate and overpriced purchase orders, when some of the work should have been batched together under one lower-priced job, they said.

In October, the limit on small construction jobs was raised from $25,000 to $250,000. The Legislature approved the temporary measure to generate additional government spending after the Sept. 11 attacks and subsequent economic slowdown in Hawai'i.

The sources said the small construction kickback system at the airport stopped before the higher $250,000 limit was imposed.

That's because an internal examination of small construction contract awards was ordered in August by then-Airports Administrator Jerry Matsuda.

Matsuda, who retired last year, said in a recent interview that he discovered problems in small-construction contract awards last summer and ordered an internal investigation by Transportation Department auditors and quality-control technicians.

Reach Jim Dooley at jdooley@honoluluadvertiser.com or 535-2447.