FBI probing federal contractor's donations to Sen. Collins' campaign

May 19—A Department of Defense contractor with ties to Maine is under investigation by the U.S. government for allegedly making illegal contributions to Sen. Susan Collins' 2020 re-election campaign.

An FBI search warrant in the investigation names Martin Kao and Clifford Chen. Kao is the former president and CEO of Hawaii-based Navatek — now known as Martin Defense Group — and Chen was Navatek's chief financial officer at the time the contributions were made. The contractor is based in Honolulu and has offices in Maine, Washington, D.C., Rhode Island, Michigan, Oklahoma, Kansas and South Carolina.

Kao and Chen are accused of making illegal contributions of about $45,000 to Collins' re-election campaign and $150,000 to the independently operated 1820 PAC, which supported the Republican's re-election bid. Donations of that nature constitute violations of federal law that prohibit federal contractors from making political contributions, according to FBI Special Agent Michelle Ball, who filed an application for a search warrant on April 7. The warrant, which had to be executed before April 21, was authorized by U.S. Magistrate Judge G. Michael Harvey.

Ball used the warrant to seize cellphones that belonged to Kao and Chen as well as other evidence, according to court documents filed in U.S. District Court in Washington, D.C. Kao has been indicted in a separate case in which he is accused of defrauding the federal government of millions of dollars of coronavirus relief funds intended for small businesses.

Kao and Collins appeared together in Portland in August 2019 when Collins announced an $8 million federal contract to Navatek by the U.S. Navy Office of Naval Research. At the time, Navatek announced it would work with Front Street Shipyards in Belfast to pursue "new science and technology for safer hulls and hybrid-electric propulsion systems for fast boats." Navatek employed about two dozen people in Maine when the announcement was made.

Nothing in the warrant indicates that Collins or her staff were aware of the contributions. Collins, who is not under investigation, was informed of the FBI inquiry on Tuesday afternoon. Collins' spokeswoman, Annie Clark, issued a statement Tuesday evening.

"The Collins for Senator Campaign had absolutely no knowledge of anything alleged in the warrant," Clark said in a statement. "The campaign found out about these allegations this afternoon when the complaint was made public via the news media. They will review the donations and the allegations, then act accordingly."

Clark said the senator has not ruled out returning the contributions — totaling roughly $45,000 — that were made by eight members of Kao's family and his staff. Collins' re-election campaign raised more than $30.5 million. The FBI alleges that Kao reimbursed the eight individuals for their contributions, essentially using them as "conduits" to support Collins' re-election bid against Democrat Sara Gideon.

Terms for making a contribution — posted on the Collins for Senator website — made it clear that any contribution must come from an individual's own funds and that those funds were not provided by another person or entity.

The 1820 PAC received a $150,000 contribution from the Society of Young Women Scientists and Engineers — referred to in court documents as SYWSE. The super PAC operated independently from Collins' re-election campaign. The SYWSE was established by Tiffany Jennifer Lam, identified in the court documents as Kao's wife. Ball, the FBI special agent, alleges that Kao used the shell company to funnel contributions to the 1820 PAC.

Kao was arrested and charged in October with bank fraud and money laundering. His company contracted frequently with the U.S. Department of Defense.

According to a 37-page criminal complaint filed by the U.S. Department of Justice, Kao lied on two applications to receive $12.8 million in federal funds under the Paycheck Protection Program for small businesses, part of the CARES Act passed by Congress late in March 2020 to address the pandemic. Collins co-authored the act.

Investigators believe that Kao, when applying for PPP loans, deliberately overstated his company's need for relief, inflated the number of his employees and used a subsidiary company so that he could apply twice. They also allege Kao transferred $2 million in PPP funds to a personal bank account.