Thursday, July 29, 2004

2 men indicted in
bid-rigging scheme

The former Honolulu Airport
officials allegedly funneled awarded
contracts to specific firms

A federal grand jury indicted two former Honolulu Airport officials who allegedly directed a $2.5 million airport bid-rigging scheme.

Dennis Hirokawa: Faces up to 20 years in prison and a $250,000 fine if convicted

In a 56-page superseding indictment filed in U.S. District Court yesterday, the panel charged Dennis Hirokawa, the former superintendent of maintenance at the airport, with one count of conspiracy and 16 counts of mail fraud.

The grand jury also charged Richard Okada, the former director of the airport's Visitor Information Program, with conspiracy.

The indictment comes a month after the grand jury charged Okada's cousin Michael Furukawa and local construction executive Wesley Uemura with conspiracy and mail fraud stemming from the scheme.

The 62-year-old Hirokawa, a Pearl City resident, declined comment and the 63-year-old Okada, an Aiea resident, could not be reached.

Both face up to five years in prison and a $250,000 fine if convicted of conspiracy. Mail fraud is punishable by up to 20 years in prison and fines of up to $250,000.

First Deputy Attorney General Richard Bissen, whose office is conducting a joint investigation into the airport scandal with the FBI and the Office of the U.S. Attorney, said that Hirokawa's and Okada's jobs allowed them to steer small purchase maintenance and repair contracts to their friends.

The state alleged in a separate lawsuit that the $2.5 million airport bid-rigging scheme involved the awards of more than 150 small purchase contracts over a five-year period starting in 1997.

During the past two years, six local contractors have pleaded guilty to theft charges as a result of the airport investigation and several have agreed to cooperate with investigators.

According to the indictment, Hirokawa directed subordinates in the airport maintenance office to award dozens of small-purchase maintenance and repair contracts of less than $25,000 to one of six companies controlled by Furukawa and Uemura.

Hirokawa then told the state workers to submit a quote for the contractors' work regardless of the actual costs or amounts of work performed, according to the indictment. The state workers also submitted two phony bids for each contract given to Furukawa and Uemura, the indictment said.

Unlike the larger state and city contracts, the awards of small purchase contracts don't require sealed bids, but they involve a review of proposals from at least three bidders who are on a list of state-approved contractors.

One unnamed witness told the grand jury that he paid Hirokawa $500 for each phony contract at Okada's direction, the indictment said. The alleged kickback payments were later raised to $2,000 for each contract, according to the grand jury.

The witness said he also treated Hirokawa and Hirokawa's friends to monthly lunches at local restaurants and was told to reimburse Okada for the purchases of food, beverages and restaurant gift certificates and merchandise.

The gift certificates and restaurant merchandise were given away at unspecified events, the indictment said.

The grand jury also alleged that Okada, Hirokawa, Uemura and Furukawa discussed squelching a criminal investigation into the bid-rigging scheme once the scandal became public.

Okada, the son of former Waipahu union organizer and Democratic Party official Hideo "Major" Okada, told witnesses that he was going to contact unnamed "individuals with political influence" to get the investigation stopped, the indictment said.


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