State sues over airport scandal
By Jim Dooley
Advertiser Staff Writer
Four companies and two state officials directly benefited from the fraudulent award of 171 state airport repair contracts worth $1.25 million, according to a civil fraud lawsuit filed by the state attorney general's office.
In addition to the civil complaint, state and federal investigators are pursuing criminal investigations into the airport contracting scandal.
The lawsuit was filed last week by the civil recoveries division of the state attorney general's office. It is the first detailed public look at what the state says was a scheme begun at least five years ago by a small group of companies and state officials to inflate the value, and control the awarding, of small construction and repair contracts at Honolulu International Airport.
The jobs, worth no more than $25,000 apiece, are awarded without the benefit of sealed competitive bids used for larger contracts. The lawsuit says the conspirators, including airport personnel, manipulated informal bids for the contracts to make it appear they had been competitively awarded.
"Work was done on all of the contracts," said Deputy Attorney General Jack Rosenzweig. "It was done at grossly inflated prices."
According to the lawsuit, Argent Construction Inc., Kenlee Limited Liability Co., Gothic Builders Inc. and MF Masonry Inc. received 171 contracts via a complex scheme that included inflated and phony bids from competing companies as well as "kickback payments" made to state officials Dennis Hirokawa and Richard Okada.
The scandal was first reported by the Advertiser in June 2002.
Hirokawa, the former airport maintenance superintendent, and Okada, former head of the statewide airports Visitor Information Program, retired shortly after they were arrested by state investigators last year. Neither has been charged with a criminal offense, although the attorney general's office has said the criminal investigation is ongoing. The U.S. Justice Department is also conducting a criminal probe.
Neither Hirokawa nor Okada could be reached for comment yesterday. Both men denied wrongdoing last year.
The civil lawsuit says three individuals, Michael and Frances Furukawa and Wesley Uemura, controlled the four companies that received the fraudulently awarded airport jobs.
All three were arrested last year but have not been charged. All were unavailable for comment yesterday.
The civil suit says four other contractors were involved in the bid-rigging scheme, but did not accuse them of receiving inflated contracts. Those four are Arthur Inada, Michael Masutani, Alaric Sokugawa and Pamela Kaneshiro.
Inada, head of a company called Blueprint Builders, last week pleaded guilty to a felony theft charge, agreed to repay the state at least $300,000 and agreed to testify against others. He is the only individual charged with a crime in the case to date.
Reach Jim Dooley at 535-2447 or at jdooley@honoluluadvertiser.com.
