In May 2019, Federal Savings Bank CEO Stephen Calk, 54, was charged with one count of financial institution bribery for using his senior position at the bank to try and secure a position in the Trump administration — by approving some $16 million worth of loans to Manafort. A superseding indictment later added a conspiracy charge.
“A unanimous jury convicted Stephen M. Calk of approving millions of dollars in high-risk loans to Paul Manafort in an effort to secure a personal benefit, namely a high-profile spot on the presidential campaign and appointment as Secretary of the Army or another similarly high-level position in the incoming presidential administration,” U.S. Attorney Audrey Strauss announced in a press release. “Calk used the federally-insured bank he ran as his personal piggybank to try and buy himself prestige and power. Today’s verdict sends the message that corruption at the highest levels of federally regulated financial institutions will be prosecuted by this Office.”
According to federal prosecutors, Calk sent Manafort a “ranked list” of positions in the government that he would be happy to accept — all while Manafort’s loans were pending approval. That list included 10 executive branch positions that started with Secretary of the Treasury and included Secretary of Defense. Calk also had 19 overseas ambassadorships on his mind — beginning with the United Kingdom and followed by France, Germany and Italy (in that order). (The U.K. perch is considered quite cushy in foreign policy circles considering the country’s close allegiance with the United States; however, the Scandinavian countries, Luxembourg, and various Caribbean islands are considered the top prizes.)
Those loans — some $16 million worth — set off numerous red flags at the bank due to Manafort’s lending profile. The storied federal lobbyist had a history of defaulting and was stretched to the brink of his financial means by attempting to lavishly maintain and upkeep numerous properties in multiple states after a stream of income from the Ukraine began to dry up–details that all became matters of public record during Manafort’s Virginia trial on myriad financial and tax crimes during the summer of 2018.
Most bank officials would have likely balked at the size and number of such loans, but Calk glossed over Manafort’s checkered and wanting financial past in hopes of a jet-setting future. And that was just for starters.
“In order to enable the Bank to issue these loans without violating the Bank’s legal limit on loans to a single borrower, Calk authorized a maneuver never before performed by the Bank, in which the Holding Company — which Calk also controlled — acquired a portion of the loans from the Bank,” prosecutors noted.
And, while the plan was ultimately found out and unsuccessful (Calk never served in the 45th president’s administration), the relationship wasn’t one-sided.
The SDNY outlines what, exactly, the banker got in return:
Manafort provided CALK with valuable personal benefits. First, in or about the summer of 2016, during the Presidential Campaign — and just days after CALK and the rest of the Bank’s credit committee conditionally approved a proposed $9.5 million loan to Manafort — Manafort appointed CALK to a prestigious economic advisory committee affiliated with the campaign. And second, in or about late November and early December 2016 — after the candidate had been elected President, after Manafort’s first loan from the Bank had been issued, and while a second set of loans worth $6.5 million sought by Manafort was pending approval by the Bank — Manafort used his influence with the Presidential Transition Team to assist Calk, recommending CALK for an administration position. Due to Manafort’s efforts, CALK was formally interviewed for the position of Under Secretary of the Army on January 10, 2017 at the Presidential Transition Team’s principal offices in New York, New York.
After being pressed on his knowledge of the scheme, Calk also falsely told regulators that he was unaware of Manafort’s dire financial straits — pretending to have no knowledge of the numerous foreclosure proceedings against the several Manafort family properties at stake.
The defendant is currently slated to be sentenced on January 10, 2022.
[Image via Alex Wong/Getty Images]
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