Contractor pleads guilty in airport scheme
By Jim Dooley
Advertiser Staff Writer
The final guilty plea in the state's investigation of a multimillion dollar cash-for-contracts scandal at Honolulu International Airport was entered in court yesterday and the FBI and U.S. attorney's office will take over the investigation.
Contractor Roy Shimotsukasa pleaded guilty to a single count of first-degree theft, admitted to paying between $4,000 and $5,000 in kickbacks to an airport official and described a bid-rigging scheme that required the state to pay inflated prices for unnecessary work.
Unlike other contractors who have admitted participation in the contracting conspiracy, Shimo-tsukasa, 65, president of AAA Termite and Pest Control, Inc., did not allege that airport officials demanded money from him for political contributions.
Shimotsukasa alleged that airport maintenance superintendent Dennis Hirokawa demanded $500 in cash for every $10,000 worth of contracts given to Shimotsukasa's company, according to a plea agreement filed in Circuit Court yesterday.
Hirokawa has not been charged in the case although he was arrested by state investigators in 2002 and resigned from state employment later that year. Hirokawa is also a defendant, along with another former airport official, Richard Okada, in a $1.5 million civil fraud lawsuit filed by the state late last year. Okada also has not been charged with a crime. Attorneys for both men have denied wrongdoing by their clients.
Shimotsukasa said he paid Hirokawa cash kickbacks totaling between $4,000 and $5,000 between mid-1998 and mid-2001.
All of the contracts received from Hirokawa were worth less than $25,000 each and were awarded through an informal bidding system required by the state for jobs under the $25,000 threshold.
Purchasing officials must obtain at least three bids for such "small contracts," but can be obtained over the phone following a much-less structured procedure than is required for larger, sealed-bid competitively-awarded jobs.
Shimotsukasa alleged that Hirokawa instructed him to get two competing bids from "friendly" competitors who quote higher prices for the work. The contracts were then awarded to Shimo-tsukasa's company, according to the plea agreement.
Other contractors who have pleaded guilty described the same bid-rigging conspiracy.
Shimotsukasa said "sometimes" his bids would be returned to him "with instructions from Hirokawa to inflate my bids to an amount closer to the statutory ceiling of $25,000."
He also alleged that he was given "make-work projects" by Hirokawa "where I was required to do work that was not needed to justify the billings I submitted."
Circuit Judge Richard Perkins set sentencing for Shimotsukasa for July 28 but that may be delayed pending the extent and timing of cooperation he is required to give to the ongoing federal probe of the airport contracting fraud, according to state Attorney General Mark Bennett.
He has agreed to pay $75,000 in restitution and faces a maximum of 10 years in prison and $25,000 in fines, plus disqualification from government contracting work.
Reach Jim Dooley at 535-2447 or jdooley@honoluluadvertiser.com.
