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The Honolulu Advertiser

Updated at 11:55 a.m., Thursday, January 30, 2003

Harris campaign suspect enters no-contest plea

By Johnny Brannon
Advertiser Staff Writer

A key target in the year-long probe of Mayor Jeremy Harris' campaign finances pleaded no contest to felony and misdemeanor charges in state Circuit Court today, and prosecutors warned that the investigation of other suspects is far from over.

Michael Matsumoto, 57, agreed to fully cooperate with prosecutors as the case continues, in exchange for an assurance that they will not seek a prison term when he is sentenced in July.

Matsumoto is president and chief executive officer of SSFM International Inc., one of the state's largest engineering firms and a major city and state contractor.

He could have faced up to 10 years in prison for felony money laundering and another year for a misdemeanor campaign contribution charge. Prosecutors will instead ask that he be placed on probation.

Matsumoto illegally funneled nearly $140,000 to Harris' 2000 re-election campaign by writing checks to people who then made the donations under their own names, or who in turn had other people write additional checks to Harris, Honolulu Prosecutor Peter Carlisle said.

"As you can tell, this scheme was obviously premeditated, coordinated and deliberate," Carlisle said after unveiling a large chart that he said depicted the path the money took from Matsumoto to the Harris campaign.

Political supporters can legally give no more than $4,000 to a candidate for mayor during a four-year election cycle, but Matsumoto "bundled" many contributions together and passed them through others to evade the limit, Carlisle said.

"This is not the way politics should be conducted in the state of Hawai'i, and this office is going to do everything in its power to make sure that this in not the way things are going to occur in the future," he said.

Matsumoto's attorney, Howard Luke, said the case was too complicated to explain quickly to reporters.

"We'll have a lot to say when we go for sentencing," he said.

Three other current and former SSFM executives, and the wife of a fourth, have also been charged with misdemeanor campaign violations for alleged illegal donations to Harris. Matsumoto's plea deal does not grant them immunity from prosecution.

Neither Harris nor his spokeswoman could immediately be reached for comment today. Chris Parsons, attorney for Harris' campaign committee, said campaign officials would also cooperate in the investigation.

"The campaign was unaware that these contributions were improper," he said. "The campaign didn't encourage this and didn't condone it and never was aware that this was going on."

Carlisle credited the state Campaign Spending Commission and its director, Robert Watada, for bringing the case to prosecutors a year ago. He said Honolulu Police Department Major Dan Hanagami and deputy prosecutors Randal Lee and Stephen Niwa had worked extremely hard on the probe.

Matsumoto and others associated with SSFM also gave about $70,000 to former Governor Ben Cayetano's election campaign, commission records show, and gave smaller amounts to the campaigns of former Maui Mayor James "Kimo" Apana and former Lt. Gov. Mazie Hirono.

Carlisle said the investigation was not limited to Harris' campaign.

"This is simply the beginning of the fruits of our investigation," he said. "This is the start. We are not finished, by any stretch of the imagination. There are more cases that are being investigated. There is more follow up, and we have now gotten the cooperation of somebody who was involved in this scheme."

Carlisle declined to say whether any evidence had surfaced to prove that government contracts were awarded to SSFM or others in exchange for campaign contributions ­ a key theory of the investigation.

He said "a surprisingly large number" of others could also be charged soon, however.

Reach Johnny Brannon at jbrannon@honoluluadvertiser.com or 525-8070.