An affiliate of a company that's hoping to bring new competition to Hawaii's interisland shipping business was itself the target of a federal bid-rigging investigation.

In June 2008, Pasha Group of California agreed to pay $13 million to settle a civil lawsuit by the U.S. Department of Justice.

The Justice Department suit alleged that Pasha was part of a "cartel formed to rig bids and fix prices for transporting personal property of U.S. military personnel and their families" in Europe. (See:)

The Pasha Group is the corporate parent of Pasha Hawaii Transport Lines LLC, which is seeking approval from the state Public Utilities Commission to operate in the interisland shipping business.

Pasha Hawaii provides cargo service from the West Coast to Honolulu, Hilo and Kahului. But the company does not have PUC approval to pick up and drop off shipments among the three local ports.

A Pasha spokeswoman said the case was settled without any admission of wrongdoing and that the unit that was the subject of the six-year federal investigation had nothing to do with its business in Hawaii.

In a statement issued in response to the 2008 settlement, Pasha added that it initiated a companywide ethics program for its employees more than four years "that has performed admirably."

"The U.S. Army has recognized Pasha’s ethics compliance program as a model for the industry.  The U.S. Army noted Pasha’s commitment to conducting business with the Army is in a manner which is above reproach," the company said.

"Pasha is also pleased that the investigation did not allege any issue regarding the quality of the relocation services which Pasha and its carrier customers provided to our military service men and women and their families," the company said.

The federal investigation may be pau but don't be surprised if questions about the two-year old case arise again. The company already faces stiff opposition from Young Brothers, which wants to preserve its dominant share of the interisland shipping market.

Tags: Department of Justice, Hawaii shipping, Pasha Hawaii Transport Lines, Young Brothers

This entry was posted on Thursday, July 9th, 2009 at 3:35 pm and is filed under Biz Bites. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.