Contractor guilty in airport kickback probe
By Jim Dooley
Advertiser Staff Writer
A two-year wide-ranging state investigation of a contract kickback scheme at Honolulu International Airport yielded its first felony conviction this week, as contractor Arthur K. Inada pleaded guilty to theft and agreed to repay the state at least $300,000 and testify against others in the scheme.
Attorney General Mark Bennett said in a press release that Inada was part of a "small circle of contractors" who worked with "certain highly placed employees at the airport" for at least five years in a scheme that involved bid-rigging, overbilling and cash kickbacks for airport repair and maintenance contracts worth no more than $25,000 each.
Officials previously said the investigation covered thousands of small repair and maintenance projects worth millions of dollars.
Inada pleaded guilty to a single count of first-degree theft and "has agreed to provide testimony in future proceedings against other individuals involved in the kickback scheme," Bennett said. Those proceedings are expected to take place in federal court, according to legal papers filed in his case.
State Deputy Attorney. Gen. Lawrence Goya told state Circuit Judge Dan Kochi on Tuesday that Inada "will be cooperating in federal proceedings" and asked that his sentencing in the state case be delayed until mid-2004.
Kochi set sentencing for May 12, but said the date "may be extended if (Inada's) cooperation has not been completed," Bennett said.
Former Attorney General Earl Anzai, who announced more than a year ago that the U.S. Attorney's office had joined the investigation, said convictions in federal court "would lead to longer (prison) sentences than are available under the state system."
Bennett said yesterday that according to Inada's estimate, more than $100,000 was paid in kickbacks from July 1, 1996, to Oct. 16, 2001.
Bennett did not name the "highly placed employees" involved, but investigators for the Attorney General's office last year arrested Richard Okada, head of the airport's Visitor Information Program; Dennis Hirokawa, airport maintenance superintendent; and maintenance supervisor Antonio Bio. It also searched their airport offices.
None has been charged in connection with the investigation, although Bio was charged in a related investigation into theft of airport landscaping materials.
All three men have since retired from the state payroll.
Two other contractors also agreed to plead guilty and repay $200,000 to the state, according to individuals familiar with the kickback probe who asked not be named because the investigation is ongoing.
Contractors have told investigators that kickbacks were made to officials in cash and gifts such as food, airplane tickets and home repairs. One of the officials implicated in the case told contractors the cash was needed to make political contributions to state elected officials.
Inada, 61, has had a state contractor's license since 1987, registered with Blueprint Builders Inc., according to state business records. He is listed as president of that company and a partner in another company, A.P. Maintenance, formed in 1999.
Bennett said Inada and two other contractors rigged their bids for airport repair jobs so Inada's would be lowest and win, according to Bennett.
Inada faces a maximum penalty of 10 years in prison and a $25,000 fine.
Reach Jim Dooley at jdooley@honoluluadvertiser.com or 535-2447.
