A Chicago bank executive arranged roughly $16 million in loans for Trump campaign chairman Paul Manafort after the 2016 presidential election in the hopes of scoring a top administration post, according to a federal indictment released on Thursday.
Stephen Calk, then the CEO of the Federal Savings Bank of Chicago, “sought to leverage his control over” Manafort’s proposed loans in order to obtain a senior administration position, prosecutors wrote in court documents unsealed in the Southern District of New York. And Calk approved the loans even though he “was aware of significant red flags regarding” Manafort’s ability to pay back the money.
Story Continued Below
The indictment is the latest reverberation of special counsel Robert Mueller’s investigation into Manafort’s corruption and Russia’s election interference. The loans were first mentioned during Manafort’s Virginia trial on bank- and tax-fraud charges, when one of Calk’s colleagues described the potential quid pro quo during courtroom testimony.
An SDNY spokesman originally said it would be inaccurate to describe the case as one of the 14 criminal referrals Mueller made to the Justice Department, but later clarified that he could not confirm whether that was the case. Legal experts said Calk’s indictment likely arose from Mueller’s work, whether it was an official referral or not.
“Many of the allegations in the indictment became public in the Manafort trial,” said Barbara McQuade, a former U.S. attorney for the Eastern District of Michigan. “It would have been prudent to deconflict with Mueller first, but if Mueller was not pursuing it, they could take it on in light of the substantial contacts in SDNY.”
A spokesman for Mueller, Peter Carr, declined to comment. The bribery charge carries a maximum sentence of 30 years in prison.
Calk’s attorney, Jeremy Margolis, called the charges "a travesty," adding in a statement that "Mr. Calk and his bank were victims of Mr. Manafort’s ongoing fraud."
Manafort received three separate loans between December 2016 and January 2017 from Federal Savings Bank for homes in New York City, Virginia and the Hamptons, prosecutors said.
Manafort’s debt became “the single largest lending relationship at the bank,” prosecutors noted, and when Manafort defaulted, the bank suffered a multimillion dollar loss.
The indictment also references a “Transition Official-1,” who appears to be Trump’s son-in-law and senior adviser Jared Kushner.
An email submitted during Manafort’s trial revealed that Manafort had reached out to Kushner in November 2016 urging him to consider Calk for Army secretary.
“Mr. Calk willingly risked his national professional and personal reputation as an active, vocal, early supporter of President-Elect Trump,” Manafort wrote to Kushner on November 30.
While Kushner’s response — “On it!” — wasn’t included in the Calk indictment, prosecutors noted that Kushner forwarded Manafort’s recommendation to three other Trump transition representatives asking that Calk be considered.
Manafort was convicted last summer in Alexandria, Va., on five counts of tax fraud, two counts of bank fraud and one count of failure to disclose a foreign bank account. The jury was unable to reach a verdict on the remaining 10 counts, and the judge declared a mistrial on those charges. Manafort was sentenced to 7½ years in prison.
During Manafort's trial, Mueller prosecutor Greg Andres called Calk a “co-conspirator” in Manafort’s fraud. Calk never appeared at the trial, however, despite his alleged role in Manafort’s misconduct.
“Mr. Manafort was submitting both false documents and other material to the bank,” Andres told Judge T.S. Ellis in August. “Mr. Calk approved those loans. And it’s the government’s theory that he did that because he was trying to obtain a position within the Trump administration.”
It worked — albeit briefly. Calk was appointed to the Trump campaign’s economic advisory council on Aug. 5, 2016, days after Calk and Manafort discussed the bank’s ability to extend the loan. During that same meeting, Calk expressed interest in joining the campaign, prosecutors said.
Manafort resigned from the campaign on Aug. 19, 2016 amid a controversy over his work for the pro-Russian Ukrainian President Viktor Yanukovych, who had fled to Russia after being ousted in a popular uprising in 2014.
But Manafort continued to signal to Calk that he could secure him a Cabinet position, prosecutors said, leading Calk to provide Manafort with a ranked list of the jobs he wanted as Manafort’s loans were pending approval. At the top was Treasury secretary, followed by Commerce secretary and Defense secretary, “as well as 19 ambassadorships similarly ranked and starting with the United Kingdom, France, Germany, and Italy,” according to prosecutors.
Three days after Trump was elected, Calk called the senior vice president of Federal Savings Bank, Dennis Raico, and asked Raico to contact Manafort. Raico was the one who testified in Manafort’s Virginia trial last summer after receiving a grant of immunity.
Calk “said he had not spoken to Manafort in a day or two and thought it was possible he might be up for a senior role in the administration," Raico said in court. Raico said Calk asked him to "call Paul and see if he was a possible candidate for secretary of Treasury or secretary of HUD."
Raico didn’t make the call because, he said, “it made me very uncomfortable.”
The indictment appears to cast Calk as the one who breached his legal duty to the federally-insured bank, rather than alleging that Manafort violated any duty he may have owed to the campaign or the transition.
Calk “corruptly solicited and received from the Borrower [Manafort] assistance in obtaining a position with the Presidential Campaign and the incoming presidential administration, intending to be influenced and rewarded in connection with” decisions on the loans, the grand jury charged.
Manafort managed to secure tickets for Calk to Trump’s inauguration, according to an email disclosed at Manafort’s trial. He also arranged for Calk to be interviewed for the No. 2 position at the Army at the Trump transition team’s New York offices in January 2017, prosecutors revealed in the indictment. He was not hired.
The Federal Savings Bank said in a statement that it is “not a party to the federal criminal case in New York involving its former chairman Steve Calk, who has been on a complete leave of absence and has no control over or involvement with the bank.”
Darren Samuelsohn and Josh Gerstein contributed to this report.