In this June 28, 2012 photo, Stephen M. Calk, Chairman and Chief Financial Official of The Federal Savings Bank speaks as Chicago Mayor Rahm Emanuel listens during an announcement about job growth and economic development and a corporate headquarters relocation by the Federal Savings Bank to Chicago. Calk, who prosecutors say tried to buy himself a senior post in President Donald Trump‘s administration by making risky loans to former Trump campaign chairman Paul Manafort, was arrested Thursday, May 23, 2019, on a financial institution bribery charge.
Chicago Sun-Times via AP
A banker who prosecutors say tried to buy himself a senior post in President Donald Trump‘s administration by making risky loans to former Trump campaign chairman Paul Manafort pleaded not guilty Thursday to a financial institution bribery charge as his lawyer said he’s done nothing wrong.
Calk, who lives in Chicago where The Federal Savings Bank is headquartered, was told by Magistrate Judge Debra Freeman to have no contact with bank employees except for his brother until prosecutors next week submit a list of individuals he cannot communicate with.
The small bank where Calk was CEO when he allegedly carried out the scheme said in a statement that Calk already had no involvement with the bank and is on a leave of absence.
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In a statement, Calk attorney Jeremy Margolis said Calk will be exonerated on the “baseless isolated charge.” He called the arrest a “travesty.”
Another defense lawyer, Daniel Stein, said outside court: “These loans were simply not a bribe for anything.”
“The Special Counsel and a federal judge have determined that The Federal Savings Bank was a victim of Mr. Manafort’s crimes,” the bank said in a statement, adding it isn’t accused of “any wrongdoing.”
Federal prosecutors described the charge in a release, saying Calk abused his bank position by approving $16 million in high risk loans that were ultimately downgraded by the bank’s primary regulator.
“His attempt at petitioning for political favors was unsuccessful in more ways than one — he didn’t get the job he wanted, and he compromised the one he had,” Sweeney added.
Manafort lobbied Trump‘s son-in-law, Jared Kushner, to consider Calk for Secretary of the Army, according to emails from the weeks leading up to the 2016 election shown to jurors at Manafort’s tax evasion and bank fraud trial last year.
Prosecutors said while Manafort’s loans were pending approval, Calk gave Manafort a ranked list of government positions he wanted, starting with Secretary of the Treasury, followed by Deputy Secretary of the Treasury, Secretary of Commerce and Secretary of Defense, as well as 19 ambassadorships similarly ranked and starting with the United Kingdom, France, Germany and Italy.
He also said Calk was “strong in defense issues, management and finance.”
Kushner responded, “On it!”
Prosecutors said Calk began in July 2016 to exploit his position as head of the bank and its holding company, knowing Manafort urgently needed loans to avoid foreclosure proceedings on multiple properties he and his family owned.
Instead, executives who worked under Calk at The Federal Savings Bank testified he began green-lighting more than $16 million in loans after he expressed interest in joining the Cabinet if Trump won the 2016 election.
The loan “closed because Mr. Calk wanted it to close,” Brennan said.
The federal jury was unable to reach a verdict on the bank fraud charge related to Calk, but Manafort was convicted on eight other counts in the case. Manafort later acknowledged guilt in all the bank-related charges as part of a deal with the special counsel’s office.
Manafort is serving a 7½ year sentence after his convictions on 10 charges alleging multiple crimes, including bank and tax fraud, misleading the government over his foreign lobbying work and encouraged witnesses to lie on his behalf. He also faces an indictment in New York charging him with state crimes , including a residential mortgage fraud scheme.