honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Wednesday, October 10, 2007

3rd Hawaii airport contractor convicted

Advertiser Staff

A prominent Honolulu contractor yesterday pleaded guilty to fraudulently obtaining Honolulu airport repair contracts, the fifth person to be convicted in a federal investigation into airport bid-rigging.

Walter Y. Arakaki, 68, pleaded guilty in federal court to one count of mail fraud.

He was accused of scheming with an unidentified airport official to bypass state procurement law in the award of several contracts worth just less than $25,000 each to Walter Y. Arakaki, General Contractor Inc., in 1999.

The contracts were for repair work at the fire rescue boathouse near the end of Lagoon Drive. Arakaki was accused of inflating the value of the contracts, and that the work was illegally "parceled" — split into increments of less than $25,000 each — in order to circumvent the more complex and time-consuming sealed-bid process required for larger contracts.

The state awarded Arakaki's company three contracts worth $24,997.04, $24,999.80 and $24,006.31, the U.S. attorney's office said yesterday.

In addition, Arakaki submitted for each contract two phony competing bids — higher than his — to create the appearance of a competitive-bid process, the U.S. attorney's office said.

He is scheduled to be sentenced April 7. He faces a maximum sentence of five years in prison and a $250,000 fine.

Arakaki was the last person indicted by the U.S. attorney's office in its investigation into contract fraud at the airport.

Last week, two contractors and two former state officials were sentenced in a conspiracy that authorities said involved submission of phony and inflated bids for small airport repair jobs worth less than $25,000.

Airport officials were given leeway in awarding these "smaller" jobs. The contractors then paid kickbacks in the form of cash, meals, groceries and other gratuities to the state officials.

The contractors were told that some of the cash payments were needed for political donations to unnamed Island political figures.

Former state officials Dennis Hirokawa and Richard Okada were alleged to have conspired with private contractors Michael Furukawa and Wesley Uemura to rig the awards and inflate the values of 45 contracts worth $1 million for small repair jobs at Honolulu International Airport from 1998 through mid-2002.

Prosecutors said the defendants netted almost $4 million in excessive billings.

Hirokawa, 65, a former airports maintenance supervisor who prosecutors pointed to as the central cog of the operation, was sentenced to nine years in prison.

Okada, 66, was sentenced to five years. Furukawa, 62, and Uemura, 62, were sentenced to 6 1/4 years and 3 1/2 years, respectively.

Six other people were convicted in related state criminal cases.