Chicago bank chief charged over loans to Paul Manafort
The chief executive of the Federal Savings Bank of Chicago has been charged with issuing millions of dollars of loans to Paul Manafort in the hope of getting a position in Donald Trump's administration.
Stephen Calk, who was also an economic adviser to Mr Trump's presidential campaign, was accused of causing his bank to give $16m in loans to Mr Manafort in 2016 and 2017 in exchange for help getting a high-level government job.
The banker "abused the power entrusted to him as the top official of a federally insured bank by approving millions of dollars in high-risk loans in an effort to secure a personal benefit," said Audrey Strauss, a senior prosecutor with the US attorney's office in Manhattan, in a statement.
Mr Calk, 54, was charged with one count of financial institution bribery. He interviewed for the job of undersecretary of the Army but was ultimately not hired, according to prosecutors, who alleged that he had sought a range of positions including Secretary of the Treasury and the US ambassadorship to the UK.
The indictment unsealed on Thursday accused Mr Calk of ensuring his bank issued the loans to Mr Manafort despite red flags about his ability to repay and the significant risks to the lender posed by the exposure.
Mr Manafort, who was Mr Trump's campaign manager in the summer of 2016, had Mr Calk appointed to an advisory position during the campaign and later attempted to secure a job for him within the administration, prosecutors alleged.
Mr Calk later falsely told the Office of the Comptroller of the Currency, a banking regulator, that he had never wanted a job in the Trump administration, according to the indictment. Jeremy Loeb, an attorney for Mr Calk, said the accusations were a "travesty".
"Mr Calk has done nothing wrong and will be exonerated at trial of the baseless isolated charge brought against him," he said. "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," Mr Loeb added.
The indictment claimed that other officials within the bank were reluctant to make the loans, but that Mr Calk caused the bank to reverse course after Mr Trump won the election. As a result, Mr Manafort became the bank's single biggest borrower, according to the charges. Prosecutors claimed that Mr Calk shunted part of the debt to the bank's holding company to avoid breaching Federal Savings Bank's lending limits, a manoeuvre it had never previously performed.
Mr Manafort is currently serving seven and a half years in prison for financial fraud and other crimes after he was prosecuted by Robert Mueller, the special counsel tasked with investigating Russian interference in the 2016 presidential election. The bank eventually made a $12m loss on the lending to Mr Manafort after he defaulted following his arrest in 2017.