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Banker Accused of Arranging $16 Million in Loans to Manafort to Gain High-Level Trump Post Banker Accused of Arranging $16 Million in Loans to Manafort to Gain High-Level Trump Post
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The chairman of a Chicago bank has been indicted in Manhattan on a charge that he issued millions of dollars in high-risk loans to President Trump’s former campaign chairman, Paul Manafort, in an effort to obtain a senior position in the administration, federal authorities said on Thursday. A Chicago bank chairman has been indicted in Manhattan on a charge that he issued millions of dollars in high-risk loans to President Trump’s former campaign chairman, Paul Manafort, in an effort to obtain a senior position in the administration, federal authorities said on Thursday.
Prosecutors said the chairman, Stephen M. Calk of Federal Savings Bank, pushed the bank to give Mr. Manafort $16 million in loans in 2016 in exchange for help in procuring an appointment. Just after the election, Mr. Calk, 54, had sent Mr. Manafort a list of 10 positions he wanted, including Treasury secretary, commerce secretary and defense secretary, according to the indictment unsealed in Federal District Court. Prosecutors said the chairman, Stephen M. Calk of Federal Savings Bank, pushed the bank to give Mr. Manafort $16 million in loans in 2016 in exchange for help in procuring an appointment for Mr. Calk.
Just after the election, Mr. Calk, 54, sent Mr. Manafort a list of 10 positions ranked in order of preference, including Treasury secretary, commerce secretary and defense secretary, according to the indictment unsealed in Federal District Court.
At the time, Mr. Manafort was trying to stave off foreclosure on several properties and desperately needed capital, the indictment said.At the time, Mr. Manafort was trying to stave off foreclosure on several properties and desperately needed capital, the indictment said.
Mr. Manafort, who had left the campaign in August, made two calls on Mr. Calk’s behalf in late 2016 to officials on Mr. Trump’s transition team, urging them to appoint Mr. Calk secretary of the Army, the indictment said. In the end, Mr. Calk was interviewed in January 2017 for a job as under secretary of the Army, but was not hired. Mr. Manafort, who had left the campaign in August, made two calls on Mr. Calk’s behalf in late 2016 to officials on Mr. Trump’s transition team, urging them to appoint Mr. Calk secretary of the Army, the indictment said. In the end, Mr. Calk was interviewed in 2017 for a job as under secretary of the Army, but was not hired.
One person with knowledge of the matter said Mr. Calk surrendered to federal authorities on Thursday morning. He is expected to appear in United States District Court later Thursday. The indictment charges Mr. Calk with one count of financial institution bribery. If convicted, Mr. Calk could face up to 30 years in prison, although he would likely receive a lesser sentence.
Mr. Calk has been under investigation for well over a year in a case that was originally opened by federal prosecutors in Manhattan, but then passed to the special counsel’s office during an inquiry into Mr. Manafort’s business dealings, according to two people familiar with the investigation. “He curried favor with an influential borrower,” William F. Sweeney Jr., the head of the F.B.I.’s New York office, said in a statement, “intentionally turning his back on the many red flags posted along the way.”
The case was later returned to Manhattan for prosecution, those people said. Mr. Calk, wearing a light blue shirt, shrugged into his jacket as he walked into a courtroom on Thursday afternoon and pleaded not guilty before a federal magistrate judge. Mr. Calk was ordered released on a $5 million bond. He had no comment afterward as he ducked into a waiting sport utility vehicle.
The indictment charges Mr. Calk with one count of financial institution bribery. His lawyers, Daniel L. Stein and Jeremy Margolis, said outside the courthouse that Mr. Calk was not guilty and would be exonerated at trial. Mr. Stein, reading from a statement, said the charge against Mr. Calk was “a travesty,” and the bank’s loans to Mr. Manafort were “good loans.”
If convicted, he would face a maximum sentence of 30 years in prison, although he would likely receive a lesser sentence. “Those loans simply were not a bribe for anything,” Mr. Stein said.
Daniel L. Stein, a lawyer for Mr. Calk, did not immediately comment. He said Mr. Calk was a 16-year Army veteran who had served as an economic adviser to Mr. Trump during the campaign. After the election, Mr. Stein said his client “felt the call to serve his country again and offered his vast business and military experience to the new administration.”
Federal Savings Banks said in a statement that Mr. Calk has been on a “complete leave of absence” and no longer has a role at the institution. “There is no suggestion of any wrongdoing on the part of the bank,” the statement said.
Mr. Manafort, 70, is serving a seven-and-half-year sentence at a minimum security prison in Pennsylvania. He was convicted of 10 felonies, including conspiracy to obstruct justice, bank fraud and tax fraud in two cases brought by the special counsel, Robert S. Mueller III.Mr. Manafort, 70, is serving a seven-and-half-year sentence at a minimum security prison in Pennsylvania. He was convicted of 10 felonies, including conspiracy to obstruct justice, bank fraud and tax fraud in two cases brought by the special counsel, Robert S. Mueller III.
The indictment released on Thursday said Mr. Manafort provided Mr. Calk with “valuable personal benefits” during the period he was seeking loans. Mr. Calk had been under investigation for well over a year in a case that was originally opened by the United States attorney’s office in Manhattan, but was then passed to the special counsel’s office in Washington, according to two people familiar with the investigation.
Mr. Calk and the rest of his bank’s credit committee conditionally approved the first loan to Mr. Manafort in the summer of 2016, during the presidential campaign. Days later, Mr. Manafort appointed Mr. Calk to an economic advisory committee affiliated with the campaign. That office was looking into Mr. Manafort’s business dealings as part of an inquiry into Russian interference in the election, those people said. The case was later returned to Manhattan for prosecution.
Later in 2016, after Mr. Trump won the election, Mr. Manafort recommended to the presidential transition team that Mr. Calk be considered for an administration position, the indictment said. At the time, Mr. Manafort’s first loan had been issued and a second loan was pending approval by the bank. The chairman of the House Committee on Oversight and Reform, which has also been investigating Mr. Calk’s role in the loans and his efforts to get an administration post, said in a statement that the case was “the latest example of the President’s inner circle trying to make backroom deals to enrich themselves instead of working on behalf of the American people.” The chairman, Elijah E. Cummings, said the White House and Trump transition team have for months refused to turn over documents in response to his request for information about the matter.
Mr. Calk was ultimately given the opportunity to be formally interviewed for the position of under secretary of the Army at the transition team’s offices in New York, though he was not hired, the indictment said. The indictment released on Thursday said Mr. Manafort provided Mr. Calk with “valuable personal benefits” while he was seeking loans.
Mr. Calk and the rest of his bank’s credit committee conditionally approved the first loan to Mr. Manafort in the summer of 2016. Days later, Mr. Manafort appointed Mr. Calk to an economic advisory committee affiliated with Mr. Trump’s campaign.
In November, days after Mr. Trump won the election, Mr. Calk emailed Mr. Manafort a copy of his résumé and a document titled “Stephen M. Calk Perspective Rolls,” with the wrong wording, the indictment said.
The indictment said the document included the list of 10 cabinet and other senior positions Mr. Calk desired, as well as a second list of 19 ambassadorships, similarly ranked, starting with Britain, France, Germany and Italy.
On Nov. 30, after the first loan had been approved and a second loan was pending approval by the bank, Mr. Manafort emailed a bank loan officer and Mr. Calk, asking: “Any sense of schedule? The clock is ticking.” Mr. Manafort faced a foreclosure lawsuit against a property in Brooklyn and foreclosure auctions were scheduled on several other properties, the indictment said.
On or about that same day, the indictment said, Mr. Manafort recommended to the presidential transition team that Mr. Calk be appointed secretary of the Army.
In December, with an application for a second loan still pending, Mr. Manafort again recommended Mr. Calk be interviewed for the Army secretary post, but was told another candidate was likely to be nominated for it.
In January 2017, after the second loan closed, Mr. Calk was interviewed for the position of under secretary of the Army at the transition team’s offices in New York, though he was not hired, the indictment said.
The indictment also said that after Mr. Manafort was later charged with federal crimes and defaulted on the loans, the bank wrote off more than $12 million as a loss.
Emily Palmer and Sharon LaFraniere contributed reporting. Susan Beachy contributed research.