The Pay-to-Play Playbook: How a Defense Contractor Co-opted Congress—and How a Federal Probe Was Stifled

In the closing weeks of 2019, Scott Reed, a seasoned Republican operative and top fundraiser for Senator Susan Collins, sat down for a high-stakes meeting at a Washington, D.C., Corner Bakery. For the first time in her two-decade career in the United States Senate, the Maine Republican was facing a genuinely perilous reelection battle. Pounded by low approval ratings tied to President Donald Trump and outpaced in fundraising by her Democratic challenger, Collins needed financial muscle.

Across the table sat Martin Kao, the flamboyant CEO of Navatek, a little-known Hawaiian defense contractor. A year prior, Collins had helped secure a multi-million-dollar Navy research contract for Kao’s firm. Now, Reed was asking for a $500,000 donation to the senator’s super PAC.

Kao had a counterproposal. Navatek was hungry for tens of millions of dollars in additional, guaranteed federal defense appropriations. If they cut a massive check, Kao wanted an ironclad guarantee from Collins’ camp. To bypass federal laws banning political contributions from government contractors, Kao planned to funnel the cash through an anonymous shell company. According to investigative records and internal communications reviewed by ProPublica, Reed assured Kao that Collins would know the true source of the funds—and that Navatek would get its money.

That covert meeting at a fast-casual bakery was not an isolated incident. It was part of a sprawling, multi-year, pay-to-play enterprise that traded millions in taxpayer-funded defense contracts for political contributions, entangling lawmakers on both sides of the aisle. Yet, just as federal investigators amassed enough evidence to launch a sweeping congressional bribery probe, the investigation was abruptly terminated following the return of Donald Trump to the White House and the subsequent gutting of the Department of Justice’s anti-corruption units.

Chronology of an Influence Operation

From Sleepy Engineering Firm to D.C. Power Player

Founded in 1978 by Steven Loui, an engineer from a prominent Hawaiian shipping family, Navatek was originally a low-profile operation focused on experimental catamaran designs. For decades, the firm relied heavily on the legendary clout of Hawaii Senator Daniel Inouye, the Senate’s master of "earmarks," who steered hundreds of millions in federal dollars to his home state.

When Inouye died in 2012, Navatek’s direct pipeline to Capitol Hill vanished, and Congress temporarily banned earmarks. Desperate to replace that revenue, Loui promoted Martin Kao, an ambitious executive who had joined as chief financial officer in 2008.

Unlike the quiet engineers who preceded him, Kao envisioned a flashier, high-stakes game. Described by former colleagues as aggressive and obsessed with money—frequently driving a Ferrari to work—Kao recognized that while Congress had banned traditional earmarks, powerful members of the House and Senate appropriations committees still controlled thousands of pages of secret defense budget line items. If Navatek could not rely on a single patron like Inouye, Kao decided, he would cultivate a stable of them across multiple states.

The Maine Connection and the Collins Alliance

Navatek’s expansion strategy found a receptive ear in Senator Susan Collins, who chairs the Senate Appropriations Committee—a panel she frequently praises as the most powerful in the legislative branch.

In 2018, Kao met Collins in person, a meeting he later told the FBI was contingent upon him making campaign donations. Through a well-connected lobbyist, Glen Mandigo, Navatek pitched an $8 million boat hull research project involving the University of Maine. Collins’ office delivered, inserting the funding into the defense budget.

In return, Kao’s network ramped up campaign contributions. Ahead of an August 2019 publicity event in Maine—where Collins posed with Kao and a model ship—Kao orchestrated over $40,000 in donations from relatives, illegally shifting excess contributions to his father to bypass individual limits.

"We are so grateful for ALL the Kao support!" Amy Abbott, Collins’ campaign finance director, emailed Kao after logging his father’s contribution.

Following the event, the Senate released a draft defense budget containing $21.5 million for Navatek’s Maine projects. Kao quickly messaged a Collins fundraiser, writing: "I’ve been involved in many tight races in the past and understand last minute ‘needs’ come up… We are here to help anyway we can — financially or whatever."

The Shell Company and the Cover-Up

That desire to give more led directly to the late-2019 Corner Bakery meeting with Reed, the head of the Collins super PAC (known as the 1820 PAC). Kao subsequently funneled $150,000 through a hastily created shell company called the "Society of Young Women Scientist and Engineers" (notably missing the "s" in scientists).

Days after the check cleared, a member of Reed’s staff emailed a Navatek lobbyist asking for Kao’s phone number: "Senator Collins would like to call Martin to thank him." By February 2020, Kao was boasting to colleagues that Collins’ office had committed to supporting an additional $32 million in naval contracts.

The scheme began to unravel in early 2020 when the Campaign Legal Center flagged the suspicious, typo-riddled $150,000 donation to the Federal Election Commission. A Hawaii journalist quickly linked the shell company to Kao’s wife.

As panic set in, Kao, Reed, and Cleta Mitchell—an attorney for the super PAC who later gained prominence attempting to overturn the 2020 election results—hatched a cover-up. Mitchell suggested the shell entity make charitable donations for women in engineering, preferably in Maine, to create the illusion of a legitimate nonprofit. Kao dutifully distributed small grants to universities where he sought future contracts.

The Downfall of Martin Kao

Kao’s empire collapsed not from the FEC scrutiny, but from his own greed. During the COVID-19 pandemic, he fraudulently inflated Navatek’s payroll to secure $13 million in Paycheck Protection Program (PPP) loans. Disgusted by his corruption, founder Steven Loui reported him to federal authorities.

On September 30, 2020, federal agents raided Navatek’s offices and arrested Kao. Facing decades in prison for fraud and illegal campaign contributions, Kao pleaded guilty in late 2022 and began cooperating extensively with the FBI, offering a 50-page document naming dozens of lobbyists, staffers, and members of Congress.

Supporting Data and Evidence

The scale of Navatek’s operation was staggering, backed by thousands of pages of internal corporate spreadsheets, emails, and financial records reviewed by investigators:

• The Lobbying Machine: In the second half of 2019 alone, Navatek paid a roster of five lobbying firms more than $500,000 to push its agenda on Capitol Hill.
• The "Valley of Death" R&D: Despite securing tens of millions in federal research funding, internal company documents acknowledged that Navatek specialized in projects that "thrived in the valley of death"—meaning the research rarely, if ever, materialized into products actually desired or deployed by the military. The Navy’s 3D-printed boat project in Maine, for instance, yielded little more than a Guinness World Record and a few PowerPoint presentations.
• The Spreadsheets: FBI agents compiled a 60-slide presentation detailing how Navatek meticulously mapped out members of Congress, assigning specific lawmakers as the "specialty" of individual high-priced lobbyists.

Official Responses

The fallout from ProPublica‘s investigation has triggered sharp denials from political figures while highlighting deep institutional defenses:

• Senator Susan Collins’ Office: Annie Clark, Collins’ deputy chief of staff, "vigorously" denied allegations of bribery, calling Kao’s claims "outlandish." Clark stated that the campaign was unaware of the shell company contributions, fully cooperated with federal authorities, and concluded the matter in 2021 by disgorging the illegal donations. "The fact that the FBI and Biden-led Department of Justice thoroughly examined the Navatek matter demonstrates this," Clark wrote.
• Scott Reed: In a brief email, Reed noted that Kao is now in federal prison and asserted, "I never had any communications with Senator Collins [or] her staff about Martin Kao and/or Navatek."
• The FBI: Ben Williamson, an agency spokesperson, defended the past handling of the case, stating that the FBI investigated claims against Collins years ago and "ultimately found nothing implicating Senator Collins or Senator Collins’ campaign. Any suggestion otherwise is totally false." Williamson did not address questions regarding the new, expanded probe initiated in late 2024.
• Other Lobbyists: Attorneys and representatives for figures like Andy Winer and Glen Mandigo denied participating in or advising clients on illegal quid pro quo arrangements, maintaining that all political contributions were lawful.

Implications: The Death of a Corruption Probe

By late 2024, FBI anti-corruption veterans Michelle Ball and Kevin Gounaud believed they had accumulated sufficient evidence to launch a sprawling, bipartisan probe into congressional bribery, even drafting paperwork to investigate a steak dinner between Kao and South Carolina Senator Lindsey Graham.

That momentum came to a sudden halt following Donald Trump’s return to the presidency.

In a wave of political retribution directed at the Department of Justice and the FBI, the specialized anti-corruption unit (CR-15) was dismantled. FBI Director Kash Patel purged investigators who had previously worked on cases involving Trump. Michelle Ball was fired in October 2025 on allegations of "weaponizing" the DOJ—charges she is currently challenging in federal court. Kevin Gounaud was pushed out in early 2026. Simultaneously, leadership of the DOJ’s Public Integrity Section resigned en masse following political interference in high-profile cases.

According to former federal officials, the Trump Justice Department has effectively ceased pursuing public corruption investigations. Consequently, the comprehensive roadmap to congressional influence peddling provided by Martin Kao sits abandoned, and the systemic vulnerabilities that allowed a defense contractor to purchase legislative outcomes remain wide open.