Engineering firm denies donations

By Ken Kobayashi
Advertiser Courts Writer

A Honolulu engineering firm and its president pleaded not guilty Monday to federal charges that the company didn't report as income political contributions made through its officers.

The defense claims the money involved bonuses paid to employees, not political contributions, and were allowable business expenses.

Thermal Engineering Corp. is charged with four felony counts of underreporting about $60,000 in corporate returns for the years 1997 to 2000.

Company president Ken I. Mashima is charged with four felony counts of helping prepare those returns.

Federal Magistrate Leslie Kobayashi scheduled trial for Nov. 16.

Mashima, who is free on a $50,000 unsecured bond, and his lawyer, David Hall, declined to comment.

Thermal Engineering's lawyer, Stephen Pingree, said the indictment "absolutely is an unfounded tax case."

He said the company paid the officers bonuses and did not intend to avoid paying taxes. The government did not lose any money, he said.

Assistant U.S. Attorney Michael Purpura declined to comment on the defense allegations.

The company, which was founded in 1978, already has been fined $3,000 in state courts and $31,000 by the state Campaign Spending Commission for illegal campaign donations.

Reach Ken Kobayashi at kkobayashi@honoluluadvertiser.com or 525-8030.