State sues contractors
over alleged rigged bids
The state has sued nine local contractors and two former Honolulu Airport employees to recover more than $1.2 million from an alleged five-year scheme to rig bids for small purchase contracts at the airport.
In a 19-page lawsuit filed last week in state Circuit Court, the attorney general's office alleges that Argent Construction Inc., The Kenlee LLC, Gothic Builders Inc. and MF Masonry Inc. provided kickbacks to state employees to rig more than 150 small purchase contracts at the airport since December 1998.
The complaint also alleged that BluePrint Builders Inc., B & U Inc., Hammer Jammers Inc., Site Engineering Inc. and Wes' Contracting participated by providing phony bids to make it appear as if the contracts were awarded on a competitive basis.
"By rigging the bidding process, the contractors were awarded contracts at prices greatly in excess of the value of services provided to the state," the attorney general's office said.
The civil lawsuit is an offshoot of the state's ongoing criminal investigation into a possible airport bid-rigging scheme, a probe that is taking a much broader look at the airport's contracting process, said Deputy Attorney General Jack Rosenzweig.
Four of the companies -- Argent, Kenlee, Gothic and M.F. Masonry -- are controlled by Michael and Francis Furukawa, who were arrested last year on suspicion of theft, conspiracy and forgery.
Michael Furukawa is a cousin of Richard Okada, the former administrator of the Visitors Information Program at the airport. Okada and former airport maintenance supervisor Dennis Hirokawa, who was arrested on suspicion of theft and bribery in June 2002, are defendants in the attorney general's lawsuit.
The Furukawas could not be reached for comment.
BluePrint is headed by Arthur Inada, who pleaded guilty last week to theft after he admitted that he rigged repair contracts at the airport.
The alleged bid-rigging scheme involves construction contracts of $25,000 or less. Unlike larger state and city contracts, the process of selecting small construction contracts does not require sealed bids, but involves a review of proposals from at least three bidders on a list of state-approved contractors.
According to the state's lawsuit, companies controlled by the Furukawas were preselected by state employees as the low bidders. The contractors then contacted friends in the industry like Site Engineering and BluePrint, who prepared fraudulent high bids.
Companies controlled by the Furukawas also obtained bid forms from two competitors -- Thomas T. Takashita & Sons Inc. and Home Contractors Inc. -- and submitted dozens of phony bids in their competitors' names without their consent.
Rosenzweig said the attorney general's office has traced more than $1.2 million in assets from the parties for forfeiture.