Banker Indicted For Giving Loans To Paul Manafort For Trump Job
Stephen Calk, who ran Federal Savings Bank in Chicago, is charged with one count of financial-institution bribery. Banker Indicted For Allegedly Giving Loans To Paul Manafort For Help Getting Trump Job (#GotBitcoin?)
A Chicago bank executive was indicted Thursday for allegedly giving $16 million in loans to former Trump campaign chairman Paul Manafort in exchange for Mr. Manafort’s help in soliciting a high-level position within the Trump administration.
The executive, Stephen M. Calk, ran the Federal Savings Bank in Chicago and served as a former campaign adviser to President Trump. He was charged by federal prosecutors in Manhattan with one count of financial-institution bribery and surrendered to authorities on Thursday.
If convicted, Mr. Calk, 54, would face a maximum sentence of 30 years in prison.
Lawyers for Mr. Calk said the loans “were not a bribe for anything” and called the indictment baseless. They said the bank’s loans to Mr. Manafort “had nothing whatsoever to do with Mr. Calk’s desire to serve.”
In a statement, the Federal Savings Bank said Mr. Calk was on a leave of absence and no longer has control over the bank.
Prosecutors allege Mr. Calk abused his power by issuing millions of dollars in loans to Mr. Manafort, who is identified in the indictment only as the “borrower,” knowing that Mr. Manafort could help him secure a position with the incoming presidential administration. Earlier this year, Mr. Manafort was sentenced to more than seven years in prison after being convicted of federal crimes including bank fraud.
Starting in the summer of 2016, prosecutors said, Mr. Manafort sought loans from Mr. Calk’s bank to avoid foreclosure on several properties he owned. Mr. Calk understood that Mr. Manafort “urgently” needed the loans, the indictment said.
While Mr. Manafort’s loans were pending approval, Mr. Calk allegedly gave Mr. Manafort a ranked list of the government positions he wanted, including Secretary of the Treasury, Secretary of Commerce, and Secretary of Defense, as well as 19 ambassadorships. Mr. Calk didn’t ultimately receive any position in the Trump administration.
Prosecutors said Mr. Calk knew Mr. Manafort had significant red flags as a borrower, including a history of defaulting on prior loans. The loans were so big that Mr. Calk allegedly authorized the bank’s holding company, which he also controlled, to acquire a portion of the loans from the bank—something the bank had never before done.
Days after Mr. Calk approved an initial loan in the summer of 2016, Mr. Manafort appointed him to an economic advisory committee affiliated with the Trump campaign. After Mr. Trump was elected president, as a second set of loans was pending approval, Mr. Manafort recommended Mr. Calk for an administration position, leading Mr. Calk to be formally interviewed for undersecretary of the army in January 2017. Mr. Calk wasn’t hired.
After The Wall Street Journal first reported in 2017 that Mr. Calk served as a Trump campaign adviser around the time his bank issued $16 million in loans to Mr. Manafort, bank examiners at the Office of the Comptroller of the Currency scheduled a meeting with Mr. Calk and other bank employees to ask about the story, according to the indictment.
The Journal had reported Mr. Manafort sought the financing as he tried to avoid a pending foreclosure proceeding on his Brooklyn townhouse. Mr. Calk falsely told the examiners the bank hadn’t been aware of the foreclosure proceeding, prosecutors alleged. After a review, the bank examiners downgraded the Manafort loans to substandard, a rating that indicates a clear credit weakness and a likelihood the lender will lose money, the indictment said.
Mr. Calk’s dealings with Mr. Manafort came up during special counsel Robert Mueller’s investigation into whether Trump campaign associates colluded with Russian efforts to influence the 2016 election. A mortgage salesman at Federal Savings Bank testified at Mr. Manafort’s trial that he was uncomfortable extending the $16 million loan because Mr. Calk was trying to get a job with the Trump administration.
Mr. Manafort was charged and taken into federal custody in October 2017, causing him to stop making his loan payments. The bank ultimately wrote off more than $12 million as a loss and has called itself a victim of Mr. Manafort’s crimes. Banker Indicted For Giving, Banker Indicted For Giving