A former Chicago bank executive is on trial in Manhattan for allegedly taking bribes from onetime Donald Trump campaign Chairman Paul Manafort, hoping to trade loans for a high-ranking position in the presidential administration.
Stephen Calk, the former chairman and CEO of The Federal Savings Bank first indicted in 2019, is on trial for charges of financial institution bribery and conspiracy to commit financial institution bribery.
Calk allegedly awarded Manafort $16 million in corrupt loans using The Federal Savings Bank as his “personal piggy bank,” federal prosecutor Alexandra Rothman alleged in her opening statement Wednesday.
Prosecutors allege Calk used his position at the bank to push through risky loans for Manafort in 2016 and 2017 while conspiring with Manafort to get him a high-ranking spot in the administration.
Days after Calk’s bank approved the first loan, Manafort appointed Calk to the Economic Advisory Council for Trump’s campaign, an unpaid role that put Calk in the spotlight giving media interviews as a surrogate for the campaign.
Prosecutors pointed to text messages Calk sent to Manafort on election night in 2016 informing him that his bank could issue a second loan despite what they say were “red flags” in Manafort’s financial position.
Calk then had an interview Manafort secured for him at Trump Tower in New York for a position as under secretary of the Army.
Former Trump staffer Anthony Scaramucci is anticipated to testify Thursday that Manafort asked him to get Calk an interview for the position and that he complied with the request despite believing that Calk was not qualified, prosecutors say.
Calk was ultimately never offered nor accepted any positions within the administration and the bank incurred a multimillion-dollar loss when Manafort defaulted on the loans, according to the indictment.
Defense counsel argued Wednesday that Calk didn’t know he was doing anything wrong in giving Manafort $16 million in loans, saying it was Manafort who committed fraud by lying about his wealth to get the loans approved.
“This is not a sweetheart deal,” said Calk’s attorney Paul Schoeman.
Schoeman acknowledged that Calk “absolutely” had sought advice and help from Manafort to get a government position because he “really loves the military” as a former member of the Army Reserve and wanted to serve the country.
But the only role Calk got was the unpaid position with the Trump campaign, Schoeman said.
“This case is not about partisan politics. The name Donald Trump is going to come up during this trial. Some people like him, some people don’t, but don’t let that influence you in this case,” Schoeman told jurors.
The alleged “quid pro quo” between Calk and Manafort came up in 2018 at Manafort’s trial in Virginia.
Manafort was found guilty on eight counts of financial fraud, but jurors deadlocked on the four counts of bank fraud and conspiracy related to the fraudulent loans he had received from Calk’s bank. Months later, Manafort pleaded guilty in a separate federal case in Washington, DC, and admitted to all the conduct alleged in the Virginia trial, including conspiring with Calk to commit bank fraud.
Former President Donald Trump pardoned Manafort and the March indictment in Calk’s case did not charge Manafort as part of the alleged conspiracy.
A jury was sworn in Wednesday after a selection process that began Tuesday.
Jurors will continue to hear testimony Thursday morning in cross-examination of the government’s first witness, acting Comptroller of the Currency Blake Paulson, along with a former Federal Savings Bank employee and Kory Langhofer, who was a member of the Trump transition team.