- Prosecutors said the executives created a shell company to skirt a ban on political contributions.
- The executives also allegedly used family members in a scheme to make so-called "straw" donations.
- Sen. Susan Collins previously said she had no knowledge of the alleged campaign finance scheme.
Three former defense contractor executives were indicted Thursday on charges they illegally funneled donations to Sen. Susan Collins and a political action committee that supported the Maine Republican's 2020 reelection campaign, according to court records.
In a 15-page indictment, federal prosecutors alleged that former Navatek CEO Martin Kao and two other executives formed a shell company to send funds from the defense contractor to a political action committee supporting Collins' successful reelection bid. Under federal law, the defense contractor was prohibited from donating to campaigns, the Justice Department said.
Kao and his former colleagues — Clifford Chen and Lawrence "Kahele" Lum Kee — were also charged reimbursing family members for contributing to Collins' campaign, and then reimbursed themselves for those so-called "straw" donations using funds from the defense contractor.
In addition to those charges, Kao faces two counts of making false statements for causing the pro-Collins political action — 1820 PAC — to make false disclosures to the Federal Election Commission about the sources of certain donations.
The indictment did not allege misconduct by Collins' campaign. An unsealed search warrant revealed last year that the Justice Department was investigating the alleged straw donation scheme, prompting a spokesperson for Collins to publicly state that the Maine Republican had "absolutely no knowledge" of the conduct.
On Thursday, Collins spokesperson Annie Clark said: "As is clear in the indictment, there are no allegations of wrongdoing by the Collins for Senator Campaign.
"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."
In the indictment, prosecutors said Kao, Chen, and Lum Kee schemed to donate in excess of contribution limits in an attempt to "gain favor" with Collins. The indictment did not refer to Collins by name, identifying the Maine Republican only as a "candidate for the office of US Senator."
In July 2019, months after he and his wife hit the contribution limit, Kao gave a $5,200 check to one relative and $5,600 checks to five other relatives who later used the funds to make what the Justice Department characterized as "conduit contributions" to Collins' campaign.
Kao later sent an email in September 2019 from his work email to the finance director of Collins' Senate campaign, saying, "We are here to help anyway we can ... financially or whatever." The campaign official replied with a reminder that Kao had already reached his contribution limit but said, "if you have friends or family members that would be willing to donate please don't hesitate to send them my way."
The following day, Chen and Lum Kee made maximum contributions of $5,600 to Collins' campaign using corporate credit cards, according to the indictment. Chen and Lum Kee later made arrangements for relatives to make conduit contributions using company funds.
In November 2019, a year before the election, the three formed a shell company named Society for Young Women Scientists and Engineers and, in December, Kao met with an official from the pro-Collins PAC to discuss a forthcoming contribution. Lum Kee then wrote a check for $150,000 from Navatek's corporate account to the shell company.
Later that day, the shell company made a $150,000 contribution to the PAC. On New Year's Eve, the pro-Collins PAC reported the contribution to the FEC, prosecutors said.