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"No jail in Honolulu airport kickback scheme"


 
Friday, December 15, 2006

No jail in airport kickback scheme 
By Jim Dooley
The Honolulu (HI) Advertiser

  
Two contractors who admitted paying kickbacks and other gratuities to state
officials in return for the award of Honolulu International Airport repair
jobs avoided jail time when sentenced by a state judge this week.

Four other contractors who also admitted participating in the
multimillion-dollar "pay-to-play" bid-rigging scam at the airport will be
sentenced later this month.

And four other men, including two former state officials, who were convicted
of fraud charges in a federal court jury trial two months ago are facing
prison sentences when they are sentenced next year.

Circuit Judge Richard Perkins Wednesday sentenced Roy Shimotsukasa, 68, and
Herbert Hirota, 54, to five years of probation and 100 hours each of
community service.

Shimotsukasa, owner of a pest control company, has already paid $75,000 in
restitution in the case. Hirota, a painting contractor, has agreed to pay
$25,000 in restitution at the rate of $2,000 per month.

The men reached plea agreements with prosecutors on felony theft charges in
early 2004, but sentencing was delayed until they testified in the federal
court trial of former state officials Dennis Hirokawa and Richard Okada and
fellow airport contractors Michael Furukawa and Wesley Uemura.

Attorneys for Shimotsukasa and Hirota told Perkins that their clients had
cooperated fully with the government and participated in the bid-rigging
scheme because of financial problems and because they believed they could
not otherwise get airport repair contracts.

Both defendants asked Perkins to accept deferred guilty pleas, which would
disappear from court records if they stayed out of trouble with the law for
five years.

Perkins granted the request for Hirota but denied it for Shimotsukasa
because he was convicted of a felony offense in 1958.

It is not clear if the sentences could be used by procurement officials to
disqualify the contractors from bidding on new government work.

Such "debarment" can occur when contractors are convicted of
procurement-related criminal offenses, said Assistant U.S. Attorney Larry
Tong, prosecutor in the federal criminal case.

"I don't have an answer on whether a DAG (deferred acceptance of guilty)
plea would constitute a conviction under federal procurement regulations,"
Tong said.

Chief Procurement Officer Aaron Fujioka said that under state law, a DAG
plea does not constitute a conviction, but procurement law does allow
consideration of "other compelling circumstances" for debarment.

To date, the state has never sought debarment of a contractor for a criminal
conviction, Fujioka said.

State Deputy Attorney General Christopher Young said yesterday's sentences
send a clear message to public employees and to government contractors.

"It's a very important, clear example of how seriously the attorney
general's office takes cases where there are allegations of fraud and
misappropriation of money," Young said.

Contractors "confronted by state employees asking for kickbacks must report
it," said Young.

And the message to public employees is that "such behavior won't be
tolerated," he said.

In his plea agreement, Hirota said airport maintenance supervisor Hirokawa
asked for cash "donations" from Hirota, adding that Hirokawa "gave me the
impression that the donations were for political campaigns."

Hirota admitted paying between $5,000 and $7,000 to Hirokawa in return for
receiving "small" airport repair contracts worth less than $25,000 each.

Shimotsukasa admitted paying Hirokawa between $4,000 and $5,000 between 1998
and 2001. He said he agreed to pay $500 for every $10,000 worth of contracts
his company received.

According to evidence filed in various criminal cases, the conspirators
agreed in advance which company would receive a specific contract, then
submitted "complementary" bids that assured that the preselected contractor
would get the job.

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