NEW YORK -- Stephen Calk, a former economic adviser to President Trump’s 2016 presidential campaign, was indicted Thursday for allegedly approving $16 million in loans to former Trump campaign chairman Paul Manafort in exchange for his help seeking a top post in the administration.
Calk, the founder of mortgage lender Federal Savings Bank of Chicago, illegally used the bank’s resources to curry favor with Manafort, lying to regulators and ignoring concerns raised by employees, according to the indictment unsealed in the Southern District of New York.
As the bank rushed through the high-risk loans, Calk gave Manafort a list ranking the senior administrative jobs he wanted, starting with treasury secretary, the indictment alleges. Calk ultimately was interviewed as a candidate for undersecretary of the Army but did not get the job, prosecutors said.
Calk, 54, pleaded not guilty in a Manhattan federal court Thursday afternoon and was released on a $5 million personal recognizance bond. The judge ordered him to give up his passport, firearms and not to talk to any potential witness in his case.
Calk faces up to 30 years in prison if convicted of the charge of financial institution bribery. He is on a leave of absence from Federal Savings Bank of Chicago, which is privately held.
Calk’s attorney, Jeremy Margolis, called the charges a “travesty.”
“Mr. Calk has done nothing wrong and will be exonerated at trial,” Margolis said in a statement. Calk and his bank were victims of Manafort’s frauds, he said.
Manafort was not named in the indictment, but the description of the borrower in the court filing matches that of the former Trump campaign chairman.
The indictment is a reminder of the financial crush that was facing Manafort during the same months when he was working as Trump’s campaign chairman, a job he won in part by arguing to Trump that he was independently wealthy and thus able to work free.
At Manafort’s trial last year, prosecutors presented evidence that he was swimming in debt while working for the campaign and struggling to juggle mortgages on several pricey properties.
According to Calk’s indictment, Manafort took a break from his duties running Trump’s campaign on July 27, 2016, to attend an initial meeting in New York with a loan officer to discuss a multimillion-dollar loan. Calk joined by video and, according to prosecutors, told Manafort he would be interested in work on Trump’s campaign.
The next day, Federal Savings Bank conditionally approved an initial $5.7 million loan. Less than a week later, Manafort told Calk he wanted to add the banker to Trump’s 14-member National Economic Advisory Committee, according to the indictment.
“Is that something you would be able to do?” Manafort said in an email, according to the indictment. “I am happy and willing to serve,” Calk responded. Other members of the committee included Steven Mnuchin, later named treasury secretary, and Wilbur Ross, later named commerce secretary.
Bank employees raised concerns about the loan, including that they could not verify Manafort’s income and that he was delinquent on a $300,000 credit card bill, according to the indictment. But Calk allegedly continued to push through the loan, which had nearly doubled in size to $9.2 million, the indictment says.
“I also want to again thank you for fixing my issue. It means a lot to me,” Manafort said in email to Calk.
After Trump was elected, Calk and Manafort’s relationship deepened, according to the indictment. Manafort’s loan was finalized days after the election, and Calk allegedly began to ask about positions within the administration.
On Nov. 14, Calk sent Manafort his biography and a list of the senior positions he wanted, including treasury secretary, secretary of defense and U.S. ambassador to the United Kingdom, according to the indictment. Among his qualifications, Calk said in an email to Manafort, was his “loyalty” shown through his service on the presidential campaign.
As Manafort’s financial pressure grew, including the impending foreclosure of several properties, Calk allegedly began working on another $6.5 million loan for the former campaign chairman, according to the indictment.
“Nervousness is setting in,” Manafort said in an email to one of the bank’s loan officers and Calk, noting that one of his properties in California was scheduled for a foreclosure auction in a few weeks. At about the same time, Manafort contacted Trump’s transition team, recommending that Calk be appointed Army secretary.
Calk was interviewed for undersecretary of the Army in January 2017. A few weeks later, the second loan was approved, according to the indictment.
Manafort "had nothing whatsoever to do with Mr. Calk’s desire to serve” in the administration, said Calk’s attorney, Margolis, who noted that his client is a 16-year Army veteran. The loans to Manafort were within the bank’s underwriting guidelines, he said.
Calk did not testify at Manafort’s 2018 trial for bank and tax fraud, but other officers from his bank took the stand to describe the unusual process by which the bank approved Manafort’s loans. The bank ultimately lost more than $12 million on the deals, according to the indictment.
Manafort was convicted at trial and later pleaded guilty to additional charges, including acting as an unregistered foreign agent while working for a Ukrainian politician before joining Trump’s campaign.
Manafort is now serving a 7½-year prison sentence. He began cooperating with authorities after his guilty plea. Prosecutors have told a judge he provided evidence both to the special counsel’s investigation and to matters being handled by other prosecutors. References to those other investigations have been redacted from documents filed so far in Manafort’s case, but it is likely Manafort provided evidence in Calk’s case.
Transcripts show that during a bench conference at Manafort’s trial last year, prosecutor Greg Andres described Calk as a “co-conspirator” who faced possible “criminal liability.”
Staff writer Rachel Weiner contributed to this report.