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Manafort Banker Charged With Bribe to Win Trump Post



Manafort Banker Charged With Bribe to Win Trump Post

(FILE) - Former Trump Campaign Manager Paul Manafort (C), with his wife Kathleen Manafort (R), arrives for arraignment at the Federal Courthouse in Alexandria, Virginia, USA, 08 March 2018 (reissued 14 September 2018). Media reports on 14 September 2018 state Manafort, who in August was found guilty of tax and bank fraud charges, has reportedly agreed to a deal and plead guilty in the investigation of Special Counsel Robert Mueller. Manafort is said to be willing to plead guilty to two criminal counts - one count of conspiracy to obstruct justice and to one count of conspiracy against the USA. EPA-EFE/SHAWN THEW
By Bloomberg
23 May 2019 0

A Chicago banker who lent millions of dollars to Trump campaign chairman Paul Manafort was charged by prosecutors with bribery for seeking a post in the Trump administration in return for $16 million in loans.

Stephen Calk, the founder and longtime chief executive officer of Federal Savings Bank of Chicago, pushed through the “high-risk” loans despite numerous red flags, prosecutors said in an indictment unsealed on Thursday. He also sent a document to Manafort ranking the administration positions he desired in return, they said — from secretary of the Treasury on down to 19 ambassadorships topped by the U.K. and France.

The indictment is the latest to target a Trump campaign associate and indicates that prosecutors are aggressively pursuing offshoots of Special Counsel Robert Mueller’s probe into Russian interference in the 2016 election. In addition to Manafort, former Trump aides Michael Cohen and Michael Flynn have been convicted of federal crimes.

A former U.S. Army helicopter pilot, Calk, 54, faces a single count of financial institution bribery. He is scheduled to appear later in the day in federal court in New York.

“Mr. Calk has done nothing wrong and will be exonerated at trial of the baseless isolated charge brought against him,” his lawyer, Jeremy Margolis, said in a written statement.

Manafort isn’t named in court papers, but the description of the high-ranking campaign official who received the loans matches him. Calk’s name came up several times during Manafort’s criminal fraud trial last year as a lender seeking a post in the administration.

The indictment includes references to unnamed officials of Donald Trump’s presidential transition team, a further indication that people inside Trump’s circle may face pressure from prosecutors in New York.

Related: Kushner Replied ‘On It!’ After Manafort Sought Post for Banker

Manafort approached the bank in the spring of 2016, seeking to refinance loans issued by another lender on several real estate projects involving him and his son-in-law, according to the indictment. During a subsequent meeting that July, Calk said he was interested in participating in the presidential campaign; Manafort said he’d get back to him.

The next day, on July 28, 2016, Calk and two other members of the bank’s credit committee conditionally approved the loan. Calk then sent his resume to Manafort and was appointed on Aug. 5, 2016, as one of 14 members of Trump’s economic advisory council, a relative unknown among business titans like Thomas Barrack of Colony Capital and Steven Mnuchin, who would become Treasury secretary.

Manafort left the campaign later that August amid news reports about his foreign lobbying. Around that time, his loan approval ran into problems, as bank officials learned of his trouble repaying another loan, an inability to verify his income and a $300,000 credit card delinquency, according to the indictment.

‘Good Friend’
On Oct. 7, 2016, Manafort asked that $1 million be added to the loan. “I look to your cleverness on how to manage the underwriting,” Manafort wrote in an email to Calk.

The loan was rejected later that month by Federal Savings Bank. But after Trump was elected in November 2016, Calk prompted the bank to reverse course and approve a $9.5 million loan, prosecutors said.

On Nov. 14, 2016, Calk emailed his professional biography and the list of White House positions he wanted.

“Are you aiding in the transition in any type of formal capacity,” Calk wrote in a Nov. 14 email to Manafort, according to the indictment.

“Total background but involved directly,” Manafort replied.

“Awesome,” Calk wrote. The bank closed on the $9.5 million loan two days later.

More Loans
After the first loan was approved, Calk pushed for the bank to approve a second set of loans for Manafort, totaling $6.5 million, even though he knew Manafort needed additional money to avoid foreclosure on properties owned by him and a relative, according to prosecutors.

“Any sense of a schedule? The clock is ticking and we are getting pressure on a number of fronts,” Manafort wrote to his loan officer and Calk on Nov. 30, 2016.

In order to enable the bank to issue the loans without violating legal limits on lending to a single borrower, Calk authorized a maneuver never before done by the bank, prosecutors said: using the holding company, which Calk also controlled, to acquire a portion of the loans from the bank.

Manafort had recommended that Calk be considered for secretary of the Army to two unnamed Trump transition officials, without mentioning his relationship with Federal Savings. After the $6.5 million loans closed, Calk interviewed for Under Secretary of the Army.

Calk didn’t get the job.

Margolis, Calk’s attorney, said the loans made to Manafort were “good loans: over-collateralized, approved by the bank’s loan committee with high rates of interest and huge cash prepayments an approved by underwriters as being well within the banks underwriting guidelines.”

“The bank’s loans to Mr. Manafort — who by then had been terminated from the Trump campaign — had nothing whatsoever to do with Mr. Calk’s desire to serve,” Margolis said.

Federal Savings Bank said in a statement that Calk was on a leave of absence and had “no control over or involvement with the bank.” It described itself as a victim of Manafort, who admitted but wasn’t charged with lying to the bank.

Regulator Calls
After a newspaper disclosed the Manafort loans in March 2017, Federal Savings Bank’s primary regulator, the U.S. Office of the Comptroller of the Currency, contacted Calk and the bank to ask about them. Calk lied to regulators by saying he wasn’t aware that Manafort’s property was in foreclosure and by saying he never wanted to be hired for a position in the Trump administration, according to the indictment.

In July 2017, the OCC downgraded the credit quality of the Manafort loans to “substandard.” After Manafort was charged that October, he stopped making payments on the loan, and Federal Savings Bank has written off more than $12 million as a loss. DM


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