A Honolulu engineering company was fined $100,000 yesterday for disguising political campaign contributions on its federal tax returns as compensation for employees.

U.S. District Judge David Ezra fined Thermal Engineering Corp., which had pleaded guilty to four counts of filing false tax returns for the years 1997 to 2000 by reporting $59,000 in donations as employee compensation.

As part of a plea agreement, prosecutors dropped four counts charging company president Ken Mashima with helping prepare the false returns.

Under the agreement, the company admitted that officers met regularly to pick candidates to support and which "owner/employee" would be used as a vehicle for the donations. Those making the donations would be reimbursed, the company acknowledged.

The company was also fined $31,000 by the state Campaign Spending Commission in 2002 for reimbursing employees for political donations to former Gov. Ben Cayetano and former Mayor Jeremy Harris as well as smaller contributions to former Maui Mayor Kimo Apana and then-gubernatorial candidate Linda Lingle.

Reach Ken Kobayashi at kkobayashi@honoluluadvertiser.com.