[ OUR OPINION ]
Nonbid contracts must be audited
WHILE Hawaii Attorney General Earl Anzai pursues an investigation into an alleged Honolulu Airport maintenance kickback scheme, a thorough inquiry is needed to determine how such a scam could have gone undetected for a lengthy period. Such an inquiry should not be limited to the airport or even to the Department of Transportation but should find whether stricter controls are needed to prevent similar scams in other areas of state government.
THE ISSUE State authorities have made arrests in what they describe as a large kickback scheme involving airport construction projects.
The controls over nonbid state construction jobs -- now up to $250,000 per project -- probably are no different in the Transportation Department than elsewhere in state government. Robert Watada, head of the state Campaign Spending Commission, says he suspects similar kickbacks have been made in other state agencies because of the cozy relationship between state officials and private contractors. An audit is needed to determine if that is true and, if so, bring it to a halt.
The city assigned such an audit to Deloitte & Touche following the scandal surrounding former city housing official Michael Kahapea's scheme that bilked $5.6 million in the mid-1990s from a fund set up to pay for relocation of businesses during the Ewa Villages revitalization project. The audit company last August said the city's internal controls over commercial relocations are now sound, although the city has been slow in making some improvements.
Anzai says as much as $8 million was spent in 1999 on airport maintenance projects, more than double the normal amount. Authorities believe airport officials were involved in a scheme that inflated the cost of hundreds of maintenance projects and offered kickbacks to some airport employees.
The investigation apparently was initiated last year by Jerry Matsuda, then the state airports administrator, after he noticed irregularities in construction contract awards of less than $25,000, until last October the maximum contract amount that was not subject to competitive bidding. Matsuda reportedly ordered an internal investigation and forwarded the findings to the Attorney General's Office.
Among those arrested were Dennis Hirokawa, the airport's maintenance superintendent in charge of overseeing the small contract award system; Antonio Bio, the airfield and ground maintenance supervisor; and Richard Okada, head of the Airports Division's Visitor Information Program. Private contractor Richard I. Namba and his daughter, the Namba company's vice president, also were arrested. Other arrests are expected. No charges have been filed.
The investigation has focused on fiscal years 1999 and 2000, but Anzai says investigators are examining transactions earlier than 1995 for evidence of kickbacks. One company received up to $1.6 million in small airport maintenance projects during a one-year period, he says.
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