"Contractor Lays Out Bid Rigging Scheme at Honolulu Int'l Airport"

Wednesday, October 4, 2006

Contractor Lays Out Bid Rigging Scheme at Honolulu International Airport
Roy Shimotsukasa Testified in Federal Court That He Agreed to Fix Contracts
and Give Kickbacks to a State Airport Maintenance Superintendent 
By Malia Zimmerman
The Hawaii Reporter


Roy Shimotsukasa, owner and manager of AAA Termite and Pest Control,
testified in U.S. District Court on Tuesday, Oct. 3, that he had
participated in a multi-million dollar kickback scheme at the Honolulu
International Airport from 1998 to 2001 at the direction of Airport
Maintenance Superintendent Dennis Hirokawa.

The 67-year-old contractor, who has owned his small business for 40 years,
quietly told the jury how he agreed to illegally manipulate the state's
bidding process, inflate his bids to the maximum of $25,000, and left a job
incomplete without reducing his final billing, all because his company was
not doing well at the time and "he needed the work." 

In return for the state contracts being awarded to him, Shimotsukasa kicked
back $500 for every $10,000 worth of contracts to Hirokawa for an estimated
$4,000. He says he paid Hirokawa in cash in large envelopes that he
personally had delivered. He also says he was told by Hiokawa to pay one of
Hirokawa's personal credit card bills, and opted for the lowest one at $85.

Shimotsukasa is one of several contractors who are cooperating with state
and federal law enforcement. His testimony comes in the initial days of a
federal trial stemming from a long-running state and federal investigation
into a multi-million dollar bribery scandal surrounding the bid-rigging of
$2.5 million in state's maintenance contracts at the Honolulu International
Airport. 

The contracts, each under $25,000, were awarded through an informal bidding
process managed by Hirokawa and other state employees, to several
contractors who agreed to the illegal arrangement.

Hirokawa, 63, and his alleged co-conspirator, Richard Okada, 64, who was
then head of the state's Visitor Information Program, are implicated on
conspiracy and mail fraud charges in the scheme that reportedly began in
1997 and continued until it was exposed by state investigators in 2001. Also
implicated are contractor Michael Furukawa and construction manager Wesley
Uemura.

Shimotsukasa was arrested in 2002 and has already pled guilty to a one count
of first-degree theft in state court, admitting to the kickbacks and
participation in the bid-rigging scheme. He says he has made no deal with
state or federal prosecutors in exchange for his cooperation and testimony.
He also has not yet been sentenced, a fact defense attorneys noted during a
brief cross-examination.

With four employees to help him run his termite and pest control business,
Shimotsukasa says he first legally received a $70,000 job at the airport.
But when he bid on future jobs at the airport, he was told by Hirokawa to
get two other companies to submit bids higher than his and submit them
together.

In each case, after the three sealed bids were opened, and Shimotsukasa won
the bid, he says Hirokawa then told the contractor to inflate his prices to
the maximum and kick back funds. 

In testimony on Tuesday, Shimotsukasa also named three other state employees
-- all airport inspectors -- who he says were involved. The crimimal federal
trial, which is overseen by U.S. District Court Judge David Ezra, is
expected to continue at least two more weeks.

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