Jan 27, 2021 - Politics & Policy

Collins helps contractor before pro-Susan PAC gets donation

Sen. Susan Collins is seen with a group of her supporters during her 2020 reelection campaign.
Sen. Susan Collins during her reelection campaign. Photo: Scott Eisen/Getty Images

A PAC backing Sen. Susan Collins in her high-stakes reelection campaign received $150,000 from an entity linked to the wife of a defense contractor whose firm Collins helped land a federal contract, new public records show.

Why it matters: The executive, Martin Kao of Honolulu, leaned heavily on his political connections to boost his business, federal prosecutors say in an ongoing criminal case against him. The donation linked to Kao was veiled until last week.

Background: Through November, Kao was the CEO of the Martin Defense Group, known until last year as Navatek.

  • In August 2019, Collins (R-Maine) helped Navatek secure an $8 million U.S. Navy contract to design advanced ship hulls at its facility in Portland, Maine.
  • A few months later, in December 2019, a pro-Collins group dubbed 1820 PAC received a $150,000 contribution from a mysterious Hawaii LLC called the Society for Young Women Scientists and Engineers.
  • The Campaign Legal Center, a nonprofit ethics group, filed an FEC complaint, alleging the donation to the political action committee may have been designed to illegally obscure the true source of the funds.

What's new: Documents filed last week with corporate regulators in Hawaii confirm the entity was run by Kao's wife.

  • Corporate records had previously listed its sole officer as a woman named Jennifer Lam, closely resembling the name of Kao's wife, Tiffany Jennifer Lam. Initial efforts to confirm her identity failed.
  • The filing last week changed the entity's registered agent from Jennifer Lam to Martin Kao, confirming their connection.
  • Kao's attorney did not respond to a request for comment.

Be smart: There’s no indication that Collins was aware of the entity's donation, who was behind it or that the prospect of financial support influenced her decision to assist Navatek’s work.

  • Nonetheless, the donation came just as Collins girded for a challenging — and extremely expensive — reelection fight. She ended up running against Democrat Sara Gideon, who spent $76 million on her unsuccessful campaign.
  • Collins got major support from 1820 PAC, which was closely aligned with the U.S. Chamber of Commerce.
  • There’s no evidence of a quid pro quo, yet the Society for Young Women Scientists and Engineers' donation to the super PAC represented a significant cash infusion for an outfit that had benefitted from having a key Navatek ally in the Senate.
  • A Collins spokesperson had no comment.

Kao’s political connections were extensive, and his efforts to cultivate and exploit them are at the center of federal fraud and money laundering charges against him.

  • Prosecutors accuse Kao of fudging Navatek’s finances and payroll information to maximize the money the company and its subsidiaries received through the Paycheck Protection Program. It had been designed to keep small businesses afloat amid the coronavirus pandemic.
  • According to the indictment, Kao pressured banks to expedite fraudulent PPP loan applications by invoking his connections to powerful legislators in Washington.

Editor's Note: This story has been updated to correct that Susan Collins helped a defense contractor before a political action committee supporting her received a contribution linked to the company's CEO.

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