Contractor admits kickbacks
By Jim Dooley
Advertiser Staff Writer
Airport construction contractor Arthur K. Inada paid $129,000 in illegal contract "kickbacks" to two airport officials from 1996 to 2001, including $40,000 in "political contributions" to the official who lobbied the Legislature for the airports division, according to a plea bargain Inada signed with the state attorney general's office.
It's the second detailed description of the wide-ranging and long-running cash-for-contracts scheme at the airport to be filed in Circuit Court by an admitted participant in the conspiracy. A plea bargain document signed Thursday by electrical contractor Bert Shiosaki described $8,100 in kickbacks, including "political donations" allegedly paid by Shiosaki to the same two officials named by Inada.
Inada said that the kickbacks he made included two $20,000 cash payments in 1998 and 1999 to Richard Okada, then-head of the state airports visitor information program. Okada, who retired in 2002 shortly after state investigators arrested him and searched his airport office, told Inada the money was for "political contributions." There's no description in the document of what political campaigns received the money or whether any donations were made.
Robert Watada, head of the state Campaign Spending Commission, said yesterday that he and his staff "have combed our records but haven't found any contributions" from individuals and companies implicated to date in the airport scandal.
Okada is described in Inada's plea agreement as "the person who would lobby the Legislature for the Department of Transportation."
State Sen. Cal Kawamoto, D-18th (Waipahu, Crestview, Pearl City), who has been chairman as well as co-chairman of the Senate Transportation Committee since 1997, said yesterday that he is a longtime acquaintance
of Richard Okada and has lunch with him occasionally, but said he had never been lobbied by Okada or received political donations from him.
Okada is the son of Hideo "Major" Okada, a longtime Hawai'i labor leader and Democratic Party leader in the same Waipahu area of O'ahu represented by Kawamoto. Kawamoto said he has known and worked with members of the Okada family for years.
Kawamoto's wife, Carolyn, is a clerk in the airports division procurement office, which processed millions of dollars worth of "small" repair contracts—worth no more than $25,000 each — now under investigation by state and federal authorities.
According to airport officials, Richard Okada had no official role in airport procurement issues, but he exercised considerable unofficial influence over contract awards as well as other airport operations, including hiring and transfers of airport employees.
Attempts to reach Carolyn Kawamoto were unsuccessful. Sen. Kawamoto said Okada had nothing to do with his wife's employment at the airport. His most recent financial disclosure form says she is paid $21,133 per year.
Richard Okada has not been charged with a crime. His attorney, Dana Ishibashi, said this week that Okada had nothing to do with airport contracting.
"I think the investigators are trying to make connections that just aren't there," Ishibashi said.
Inada said in his plea agreement that he began doing airport work in 1996 through another contractor, Michael Furukawa, who is Richard Okada's cousin.
"I learned that there was a system in place at Honolulu International Airport (HIA) to steer contracts to do repair work at HIA to certain contractors," Inada's plea agreement said.
Inada said he conspired with Furukawa and another contractor, Wesley Uemura, in submitting phony or inflated bids for airport work.
Furukawa, his wife, Frances, and Uemura were arrested by state investigators in 2002 but have not been charged with a criminal offense. All three, plus Inada, Shiosaki, Okada and now-retired airport maintenance supervisor Dennis Hirokawa were named as defendants in a $1.25 million civil suit the state filed late last month in the contracting conspiracy.
Attorneys for all the defendants have denied any wrongdoing by their clients.
Inada said Okada and maintenance supervisor Hirokawa "both asked me for kickbacks" in return for the work he was getting.
At first, he said, he had to buy lunches for Hirokawa and six of his employees. Then, at Okada's request, Inada began paying "a kickback of $500" to Hirokawa for every contract he was awarded, Inada charged in his plea agreement.
"Eventually the $500 per job became $2,000 per month," Inada said.
Inada said, he delivered the money first to Hirokawa then later directly to Okada.
The $20,000 "political contributions" to Okada were "in cash since Okada once told me cash would be harder to trace," Inada alleged.
"I estimate that I paid Hirokawa and Okada a total of over $129,000 in kickbacks," Inada said.
To cover those costs, he said, he overbilled the state for the work he performed.
Inada pleaded guilty last month to one count of felony theft, agreed to repay the state at least $300,000 and promised to cooperate in a continuing federal investigation of the airport contracts.
Sentencing for Shiosaki and Inada will be later this year. They face maximum penalties of 10 years in prison and $25,000 fines.
State Deputy Attorney General Lawrence Goya, in charge of the state case, said two more plea agreements will be filed soon. Then the entire case will be turned over to the federal government for futher investigation, he said.
Reach Jim Dooley at jdooley@honoluluadvertiser.com or 535-2447.
