Contractor Illegally Funneled $150K to Susan Collins’ Re-election Fund

An over-eager supporter or something more sinister?

I’m not sure what to make of this Axios report but it bears watching:

The FBI is investigating what it describes as a massive scheme to illegally finance Sen. Susan Collins’ 2020 re-election bid, Axios has learned.

What’s happening: A recently unsealed search warrant application shows the FBI believes a Hawaii defense contractor illegally funneled $150,000 to a pro-Collins super PAC and reimbursed donations to Collins’ campaign. There’s no indication that Collins or her team were aware of any of it.

If that’s all there is to it, then fine. I wouldn’t think that, even in Maine, $150,000 is a decisive amount of money and, if Collins’ campaign had no knowledge, it’s not on them. But it gets more complicated.

Collins helped the contractor at issue, then called Navatek and since renamed the Martin Defense Group, secure an $8 million Navy contract before most of the donations took place.

Former Navatek CEO Martin Kao was indicted last year for allegedly bilking the federal government of millions in coronavirus relief loans.

What they’re saying: “The Collins for Senator Campaign had absolutely no knowledge of anything alleged in the warrant,” Collins spokesperson Annie Clark told Axios in an emailed statement.

It’s not clear, then, that the FBI thinks the campaign is an innocent bystander—the campaign is simply asserting its innocence. And, while it’s certainly possible that Kao simply wanted to ensure that he would continue to get the support of a powerful Senator, the connection between the illegal donation and the huge government contract certainly raises a huge red flag.

The big picture: Federal prosecutors say Kao used a shell company to funnel $150,000 in Navatek funds to a pro-Collins super PAC called 1820 PAC.

According to the FBI, Kao and his wife set up a sham LLC called the Society for Young Women Scientists and Engineers. Navatek then wrote the LLC a $150,000 check, investigators say, which was passed on to the super PAC.
Government contractors are barred from donating to federal political committees, and investigators suspect the donations were attempts to evade that prohibition.

Investigators say bank records also show that Kao illegally reimbursed family members who donated to Collins’ campaign and that Navatek reimbursed some of Kao’s colleagues for their contributions.

That’s known as a “straw” donation, and it’s prohibited by law. The Collins campaign’s fundraising solicitations also require donors to certify that they are in fact donating their own funds.

The allegedly reimbursed donations came in clusters, according to federal contribution records, between June and September 2019, and amounted to less than 0.2% of the Collins campaign’s total fundraising.

So, a fairly classic, if illegal, workaround to campaign finance laws that’s been going on as long as we’ve had campaign finance laws. But here’s the kicker, oddly saved for the last paragraph:

The warrant application quotes an email exchange between Kao, who had just maxed out to Collins’ campaign, and the senator’s Maine finance director: “If you have friends or family members that would be willing to donate please don’t hesitate to send them my way,” the Collins staffer wrote.

That could be simple schmoozing. But it could very well also be a wink, wink, nudge, nudge suggestion to engage in illegal bundling.

FILED UNDER: Campaign 2020, Crime, Law and the Courts, US Politics
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Sleeping Dog says:

    Enter Claude Rains as Lt. Renault. We haven’t heard the last of this.

    3
  2. CSK says:

    @Sleeping Dog:
    I’m shocked.

  3. gVOR08 says:

    @CSK: I’m concerned.

    7
  4. CSK says:

    @gVOR08:
    We’ll always have Paris, Maine.

    4
  5. Mikey says:

    *sad trombone*

    1
  6. EddieInCA says:

    I’m certain Senator Collins is deeply concerned.

    3
  7. MarkedMan says:

    James, I don’t know if you were being sarcastic and my /sarcasm/ alert is just malfunctioning, but to my ears you are being way, way too generous. A defense contractor that has gotten help from her in the past donated $150K to benefit Collins campaign, and you accept at face value when her staffers say the company didn’t ever mention it to her or her staff?! C’mon, that doesn’t even pass the laugh test.

    5
  8. Just nutha ignint cracker says:

    That could be simple schmoozing. But it could very well also be a wink, wink, nudge, nudge suggestion to engage in illegal bundling.

    Which is why the FBI is investigating and why the campaign is saying, “no, no, no, it’s all perfectly innocent and we know nothing about it.” I don’t see the mystery. The FBI is paid to be suspicious, and the campaign is paid to provide clarity/obfuscation according to the need.

    1
  9. Just nutha ignint cracker says:

    It’s also possible that, in the spirit of Keating, Kao will say ‘of course it was a bribe [in this case, I guess it would be a quid pro quo]; do you think I give that kind of money to politicians because I like their policy stance” when the FBI questions him about it (considering that he’s already dead bang guilty and all).

  10. gVOR08 says:

    @Just nutha ignint cracker: Yes. One of life’s rules is that if they would say X if they are innocent, and would also say X if they are guilty, the fact that they said X is immaterial.

  11. OzarkHillbilly says:

    Kao gets slapped on the wrist and has to pay a fine.
    Collins has to give up the $150K. Maybe.

    OK, call me cynical, but what’s the point of having money and power if you have to obey the law anyway?

    2
  12. Just nutha ignint cracker says:

    @OzarkHillbilly: Good point!