3 indicted over alleged 'straw donor' scheme that funneled money to pro-Susan Collins group

Feb. 11—Three Hawaii men were indicted over alleged illegal contributions to a group supporting Sen. Susan Collins' reelection in 2020, the federal Department of Justice announced Thursday.

An unsealed FBI warrant last spring revealed that the agency was investigating Martin Kao, the former CEO of Martin Defense Group, a Hawaii-based defense contractor that also has offices in Maine, for allegedly creating a shell company to donate $150,000 to the 1820 PAC, a super PAC created to support Collins. He was also under investigation for paying employees and family members to donate to her campaign in violation of federal campaign finance laws.

Neither the warrant nor the indictment released Thursday suggest wrongdoing by Collins or her campaign staff.

"As stated previously, the campaign had absolutely no knowledge of any of the allegations against Mr. Kao or his associates until a search warrant was reported in the press," her campaign said in a Thursday statement.

Kao was indicted Thursday along with Clifford Chen and Lawrence Lum Kee, both of whom also worked for Martin Defense Group, according to the indictment. The three are charged with conspiracy to defraud the U.S. as well as making conduit and government contractor contributions. Kao also faces two other charges related to false statements and submissions to the Federal Election Commission.

Kao was also indicted in 2020 for allegedly attempting to defraud the Paycheck Protection Program, a small business loan program championed by Collins. He stepped down as CEO of Martin Defense Group following that indictment, according to the Hawaii Star-Advertiser. The company had won an $8 million U.S. Navy contract in 2019 to design boat hulls in Portland.

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