Airport contractor
to pay restitution
for kickbacks
The owner of a Kaneohe termite treatment company agreed to pay $75,000 in restitution after he pleaded guilty to theft in connection with the Honolulu Airport kickback scandal.
In a hearing before Circuit Judge Richard Perkins yesterday, Roy Shimotsukasa, president of AAA Termite & Pest Control Inc., admitted he paid $4,000 to $5,000 in kickbacks between 1998 and 2001 to former airport maintenance supervisor Dennis Hirokawa.
The 65-year-old Shimotsukasa also said he inflated his contract bids at Hirokawa's instruction to amounts close to the statutory $25,000 ceiling for small-purchase airport contracts.
"I went along with Hirokawa's scheme because my business was struggling financially and we needed the work," Shimotsukasa said. "I was not surprised by Hirokawa asking for a kickback, as I heard that other contractors that were awarded jobs at Honolulu International Airport were asked by Hirokawa to do the same."
Hirokawa was arrested in July 2002 but has not been charged. He declined comment and referred questions to attorney Keith Shigetomi, who could not be reached for immediate comment.
Shimotsukasa is the sixth and final contractor to reach a plea agreement with the state attorney general's office, which has been investigating for the past two years.
The attorney general's office said it will turn over the airport investigation to the office of the U.S. attorney and other federal agencies.
The five-year bid-rigging scheme allegedly involved more than 170 small-purchase airport contracts. 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 a December 2003 lawsuit filed by the attorney general's office in state Circuit Court, nine contracting companies conspired with Hirokawa and Richard Okada, a former head of the airport's Visitor Information Program.
In his plea agreement, Shimotsukasa said he paid Hirokawa $500 for each $10,000 that he billed the state. The payments were made in cash and were usually delivered to Hirokawa personally, Shimotsukasa said.
Shimotsukasa also admitted that he enlisted the cooperation of two contractors, Realty Termite and Chemi-Pure Products Ltd., who would submit phony inflated bids to ensure that he was the lowest bidder.
Shimotsukasa said there were several instances where Hirokawa awarded him "make work" projects in which he was asked to do termite treatment in places where it was not necessary.
Shimotsukasa said Hirokawa rejected some of his contract bids because they were too low. Hirokawa later asked that Shimotsukasa's bid be closer to the $25,000 statutory limit for small-purchase contracts.
According to the attorney general's office, Shimotsukasa has agreed to provide testimony in future court proceedings.
Shimotsukasa, who faces a maximum penalty of 10 years in prison and a fine of up to $25,000, is tentatively scheduled to be sentenced on July 28.