FBI shut down inquiry tied to Hawaii contractor’s claims
The FBI in 2025 shut down an inquiry into allegations that a political adviser to Sen. Susan Collins had participated in a scheme to funnel illegal campaign contributions from a defense contractor seeking lucrative federal contracts, current and former officials said.
The bureau began investigating the matter under the Biden administration, after former Hawaii defense contractor Martin Kao — the former head of Martin Defense Group LLC, formerly known as Navatek LLC — said he had discussed circumventing campaign finance laws with a political adviser to Collins, R-Maine.
Kao pleaded guilty in September 2022 to money laundering and bank fraud, some of which related to a separate scheme to defraud the government of pandemic aid money. He was sentenced in February 2025 to 87 months in prison and ordered to pay more than $12.8 million in restitution along with 12,800 hours of community service.
The FBI inquiry, which was earlier reported by ProPublica, was closed under the Trump administration last year because senior bureau officials questioned the veracity of Kao’s account, which he began offering around the time he pleaded guilty in 2022.
Current and former officials familiar with the investigation, who spoke on the condition of anonymity to describe a sensitive inquiry, said agents did not uncover much evidence to corroborate Kao’s claims against the senator and her advisers, including Scott Reed, a fundraiser for Collins. But they acknowledged that it was possible more could have surfaced if the investigation had developed further.
The disclosure of the inquiry and its closing came in the final weeks of a midterm election in which Collins is in a tight race that could help decide control of the Senate. It prompted accusations that the FBI’s decision to shut down the investigation last year was influenced by political considerations — safeguarding a critical seat that could decide which party controls the Senate.
Don't miss out on what's happening!
Stay in touch with breaking news, as it happens, conveniently in your email inbox. It's FREE!
On Capitol Hill, Collins pushed back against the story, calling it “truly outrageous.”
“These are 7-year-old allegations that were thoroughly investigated by the Biden Justice Department and FBI. And in 2021, the Biden Justice Department found there was no wrongdoing by any one on my campaign staff, my office or me,” she said. “It is clearly a political hit job.
“It is very frustrating and unfair to have it brought up this close to the election,” she added, noting that the man at the center of the accusations is a twice-convicted felon.
“He is a liar, and that is what he is doing here,” she said.
Annie Clark, Collins’ deputy chief of staff, described the allegations against the senator and her advisers as “categorically false.” In a lengthy social media post Tuesday morning, she said that her campaign “cooperated fully with the FBI throughout the investigation, producing all of the documents it requested and serving as fact witnesses in official settings.”
“As Martin Kao was awaiting sentencing, he began making outlandish charges about the Collins office, deflecting blame from himself and placing it on Senator Collins,” she wrote, adding, “The FBI and the Court obviously did not believe Kao.”
In an email to ProPublica, Clark added that the campaign ultimately returned the money. The committee sent the donations to a group that was rebuilding a school in Frenchville, Maine, that burned down in 2021, according to a person with knowledge of the move.
In President Donald Trump’s second term, the Justice Department has scuttled the main unit responsible for investigating public corruption while dropping investigations against Republicans and Trump allies, including Eric Adams, the former mayor of New York.
Kash Patel, the FBI director, also fired many agents in a public corruption unit at the Washington field office that had handled the Kao inquiry who had gone on to work for special counsel Jack Smith, including one of the agents who had investigated Kao.
Collins, a moderate, is not close to Trump and has often sought to distance herself from some of his policies.
Kao told investigators that executives with his company had met in 2019 with Reed, who asked them for a large donation, even though federal law prohibits direct contributions from federal contractors, according to ProPublica’s account, which was later confirmed by two former officials.
Kao said he was willing to do so, provided Collins’ team could ensure the company received millions in naval contracts in Maine. As a workaround, Kao created a shell company and sent a $150,000 check to a super political action committee associated with Collins, ProPublica reported.
Around the same time, Navatek received an $8 million contract for a boat hull research project. Collins visited the company’s offices in Maine to celebrate the deal, posting a photograph of herself on Facebook holding a model boat and standing next to Kao.
Collins, 73, faces what is arguably the toughest reelection campaign of her three-decade career as a Republican representing a blue state.
Her Democratic opponent, Troy Jackson, the former speaker of Maine’s Senate, seized on the disclosure of the FBI investigation to accuse Collins of corruption and to cast Trump as her political wingman.
“Susan Collins delivered millions in taxpayer dollars for a corrupt donor bankrolling her campaign, and then Donald Trump helped her cover it up,” he said in a fundraising email sent Tuesday.
Ben Williamson, a spokesperson for the bureau, said it had investigated claims against Collins and “found nothing” indicating that the senator or her campaign had done anything illegal. “Any suggestion otherwise is totally false.”
This article originally appeared in The New York Times.
The Star-Advertiser contributed to this report.
© 2026 The New York Times Company