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Ex-bank CEO charged with lending millions to Paul Manafort in exchange for help getting Trump White House job

Key Points
  • Stephen Calk, former CEO of Federal Savings Bank, has been indicted on charges that he loaned former Trump campaign chair Paul Manafort millions of dollars in exchange for Manafort's help securing a high-level Trump administration position.
  • According to prosecutors, Manafort received three separate home loans from Federal Savings Bank in 2016 and 2017, valued up to $16 million.
  • In exchange for the loans, Manafort secured a spot on a prestigious Trump campaign committee for Calk, and helped get him a formal interview with the Trump transition team, although Calk wasn't ultimately offered a job, the indictment says.
Stephen Calk walks out of a Manhattan court house after posting bail on charges of bribing former Trump campaign chairman Paul Manafort on May 23, 2019 in New York City.
Spencer Platt | Getty Images

A former president of Chicago-based Federal Savings Bank has been indicted on charges of lending former Trump campaign chairman Paul Manafort as much as $16 million in exchange for help in a failed bid to be appointed secretary of the Army, federal prosecutors said Thursday.

Stephen Calk surrendered Thursday and was scheduled to appear in federal court in Manhattan in the afternoon.

According to the indictment, Manafort received three separate home loans from Federal Savings Bank valued at up to $16 million. In exchange, Manafort pledged to help Calk get appointed as then-incoming President Donald Trump's secretary of the Army or a similar senior post.

The indictment said Manafort did manage to secure a position for Calk in 2016 on the Trump campaign's economic advisory committee, and later pulled strings to get Calk a formal interview with the Trump transition team for a job as undersecretary of the Army, although Calk was not ultimately hired.

Calk "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, namely an appointment as Secretary of the Army or another similarly high-level position in the incoming presidential administration," federal prosecutor Audrey Strauss said in a statement."Calk's alleged attempt to obtain such an appointment was unsuccessful, and the loans he approved were ultimately downgraded by the bank's primary regulator."

According to Jeremy Margolis, a lawyer for Calk, the former CEO intends to fight the charges, and to argue that the loans made by Federal Savings Bank to Manafort were "good loans."

"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 [in the Trump administration]," Margolis said. "Mr. Manafort had no ability to cause Mr. Calk to be appointed to any position, and Mr. Calk was never actually chosen for any governmental appointment."

Paul Manafort, former campaign manager for Donald Trump, exits the District Courthouse after a motion hearing in Alexandria, Virginia, on Friday, May 4, 2018.
Andrew Harrer | Bloomberg | Getty Images

Email records from Manafort's trial, however, show that Manafort did, in fact, submit Calk's name and resume in late 2016 to Trump's son-in-law Jared Kushner, now a senior advisor in the West Wing. Calk's CV was one of three that Manafort sent Kushner on November 30, 2016, under the subject line, "3 Recommendations for Major Appointments."

As part of his pitch, Calk also sent Manafort a list of positions he wanted in the Trump administration, which included the secretaryships of the army, housing and urban development, and commerce. Calk also made a list of what he called "Ambassadorships I would like in rank order," which contained 18 diplomatic posts he wanted, ranked from U.S. ambassador to the United Kingdom at the top, to U.S. ambassador to Singapore at the bottom.

In a separate statement, a spokesman for Federal Savings Bank emphasized to CNBC that the bank "is not a party to the federal criminal case in New York involving its former chairman Steve Calk, who has been on a complete leave of absence and has no control over or involvement with the bank. Further, there is no suggestion of any wrongdoing on the part of the bank."

But when CNBC followed up with questions about when Calk and the bank parted ways, the spokesman acknowledged that it was only recently, at the beginning of May. He also confirmed that the dual roles of CEO and acting chairman, from which Calk has taken a leave, are currently being performed by Calk's brother, John Calk.

As recently as Tuesday, Steve Calk was also still using his personal LinkedIn page to promote posts from Federal Savings Bank.

Spokespeople for Paul Manafort and the White House, meanwhile, did not respond to requests for comment from CNBC.

But the Democratic chairman of the House Oversight and Reform Committee, Rep. Elijah Cummings, Md., said Calk's indictment was merely "the latest example of the President's inner circle trying to make backroom deals to enrich themselves instead of working on behalf of the American people."

In a statement to CNBC, Cummings also said that he had been trying for months to obtain documents and records from the White House and the Trump transition team related to Manafort and Calk's efforts to secure a post for Calk, but that both the administration and the presidential transition had so far refused to comply with his requests. "It is time for the White House to stop this unprecedented cover-up and start producing the documents we need to do our job," Cummings said. 

Manafort is serving a seven year prison sentence in federal custody after he was convicted last year on several counts of tax and bank fraud.

Manafort was fired from the Trump campaign in August 2016, following reports the he engaged in extensive and undisclosed lobbying on behalf of a Kremlin-backed political party in Ukraine. But he remained an influential figure in Trump's political orbit throughout the 2016 election and into the early months of Trump's presidency.