Navatek Vice President Dave Kring, Navatek CEO Martin Kao, Sen. Susan Collins, Front Street President JB Turner and Maggie Craig, Navatek deputy director of operations for Portland, from left, at the Aug. 6, 2019 announcement of an $8 million Navy contract in which Front Street will collaborate with Navatek. Photo courtesy of Sen. Susan Collins’ office
Two former executives of a Hawaii-based defense contractor pleaded guilty to their roles in a scheme to donate tens of thousands of dollars through a shell company to support Sen. Susan Collins’ 2020 reelection campaign.
Clifford Chen and Lawrence Lum Kee each pleaded guilty last month in U.S. District Court in Washington, D.C., to one count of making conduit contributions in violation of federal law, an offense that carries a maximum of one year in prison.
Chen, Lum Kee and Martin Kao, their boss at the engineering firm Navatek, were accused of violating federal laws prohibiting defense contractors from making contributions directly to candidates. Prosecutors said the executives funneled $200,000 to the campaign and a political action committee through family members and a shell company in 2019.
Kao pleaded guilty in September.
Under the terms of plea agreements, prosecutors are recommending that Lum Kee and Chen spend up to six months in prison and face fines of $2,000 to $20,000. They are scheduled to be sentenced on Aug. 16.
None of the men still work for the company, Navatek, now known as PacMar Technologies. The company was doing research and development for the Navy and had a satellite office in Portland.
Collins, a Maine Republican who was a senior member of the Defense Appropriations subcommittee, has said she knew nothing about the illegal donations – $52,000 to her campaign and $150,000 to the 1820 PAC – which were made shortly after Collins helped the firm land an $8 million contract with the U.S. Navy’s Office of Naval Research to build experimental hulls and hybrid-electric propulsion systems in Maine.
“There have been no allegations of wrongdoing by the Collins for Senator campaign, and the campaign has cooperated fully with the FBI throughout this investigation,” Collins’ campaign said in a statement Monday. “The campaign divested itself of all the contributions associated with Mr. Kao and his associates. Both the campaign’s website and donor forms stated clearly the very basic law that donors cannot make a contribution in another person’s name.”
In August 2019, Sen. Collins and Kao were together at a news conference in Portland to announce the funding, which she had strongly advocated for on the Defense Appropriations subcommittee. The money was awarded to help Navatek build experimental hulls in conjunction with Belfast-based Front Street Shipyards.
Kao and his wife had already made the maximum allowable donations to Collins’ campaign – $5,600 each. But 11 days after the Navy contract was announced, six other individuals made $5,600 donations using money given to them by Kao, he affirmed in his guilty plea. In total, Chen, Lum Kee, Kao and their families donated more than $61,000 to the campaign.
The three men also created a shell company – the Society of Young Women Scientists and Engineers – which they used to funnel an illegal $150,000 contribution from Navatek to the 1820 PAC, a so-called super PAC that supported Collins’ reelection effort but operates independently and is legally prohibited from coordinating with her campaign. At the time, Collins was preparing for a tight reelection fight, ultimately triumphing over Democratic nominee Sara Gideon.
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