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The Honolulu Advertiser
Posted on: Friday, October 6, 2006

Contractor tells of $129K in kickbacks at airport

By Jim Dooley
Advertiser Staff Writer

A nuts-and-bolts account of alleged graft and corruption at Honolulu International Airport was delivered in federal court yesterday by a general contractor who testified that he gave $129,000 in kickbacks to two state officials in return for their help in landing airport repair contracts.

Arthur K. Inada, head of Blueprint Builders, Inc., alleged that the payments were made from mid-1998 to mid-2000 and included everything from occasional $20 pastry purchases at Dee Lite Bakery to two $20,000 cash gifts that then-airport official Richard Okada said were needed for "campaign donations" to unidentified politicians.

Okada, former head of the Visitor Information Program at the airport, is one of four defendants on trial for mail fraud and conspiracy charges. The other defendants are former airport maintenance superintendent Dennis Hirokawa and contractors Wesley Uemura and Michael Furukawa. All have pleaded not guilty.

Inada said he first began doing airport repair work in 1992 after Furukawa, a former coworker, told him that Furukawa's cousin, Okada, held "an influential position there and could probably get us some work."

Inada described himself as "kinda naive at first about what I had to do" but eventually learned the ins and outs of the bid-rigging scheme.

Three bids were necessary for the award of a "small" airport contract — priced less than $25,000 — and Inada said he was told that he was responsible for submitting all three for any job he wanted — one from his company and two "complementary" bids that would be priced higher than his own.

"I needed two other higher bids besides mine to turn in," he testified.

Inada said that at first he used a company in which he held shares and another that he was friendly with to submit the complementary bids. He said he later used Furukawa's and Uemura's companies in the scheme and that they in turn used his firm's paperwork to submit complementary bids on jobs they wanted.

In 1993 or so, he said, he was asked to pay Hirokawa $1,000 for each job he received but "thought it was quite a bit for me — I didn't have a lot of cash to dispense with."

So he worked out a compromise with Okada that required him to pay $500 for each job under $10,000 and $1,000 for each contract worth more than that. He said he put the money in envelopes and delivered it personally to Hirokawa at the airport.

He later made the payments to Okada at his airport office, Inada testified.

Okada later asked him for larger cash payments which he said were needed for "campaign funds." Inada said he paid $40,000 to Okada in 1999 and 2000, always in "March or April" because "that was the deadline for campaign contributions."

No Isle political campaign reported receipt of funds from Inada or his companies during that period. Barbara Wong, executive director of the state Campaign Spending Commission, said yesterday she was unaware of any donation deadline in March or April for such contributions.

Inada said he also accompanied Okada on four occasions to Marukai Wholesale Mart, a food distributor, and paid more than $900 each time for food selections made by Okada. Numerous similar shopping trips were taken to purchase food and beverages at Costco, Inada said. Sometimes airport employees who worked with Okada at the airport helped carry the purchases, he said.

One Marukai purchase, Inada testified, was for $1,057.19 on April 30, 1999. Okada "had a list" of the items he wanted and told Inada that the goods had to be taken "down to the Legislature."

That was at the time the 1999 legislative session was closing.

Inada said he and Furukawa took turns paying for weekly lunches with Okada and Hirokawa at such eateries as Kincaid's and La Salle Restaurant. Sometimes the airport officials would bring secretaries and clerks to the lunches. The cost of the lunches ranged from $124 to $380, according to credit card records introduced as evidence yesterday.

Inada said he also purchased thousands of dollars in gift certificates at Ala Moana Center, Sam Choy's restaurant and Foodland, giving them to Okada to distribute to airport personnel.

Okada's attorney, Dana Ishibashi, began cross examination of Inada yesterday afternoon, asking him about his tax returns and other financial matters. Inada first denied that he had ever made political contributions of his own, then admitted that he made a donation to Arnold Morgado's mayoral campaign in 1996. "Richard asked me to," Inada testified.

Inada pleaded guilty to state fraud charges connected to the airport case. Part of his plea agreement required him to testify as a prosecution witness in the federal case.

Reach Jim Dooley at jdooley@honoluluadvertiser.com.