The head of a Chicago-based bank was charged in an indictment unsealed on Thursday with bribery and accused of approving $16 million in high-risk loans to President Donald Trump’s former campaign chairman Paul Manafort in a scheme to land a top Trump administration post such as secretary of the U.S. Army.
Stephen Calk, who was chairman and CEO of Federal Savings Bank though is now on a leave of absence, was charged by federal prosecutors in New York with one count of financial institution bribery, which carries a maximum prison term of 30 years.
Calk, 54, pleaded not guilty during a brief appearance in Manhattan federal court after surrendering to authorities.
His name repeatedly came up during Manafort’s 2018 financial fraud trial in Virginia, with prosecutors saying Calk approved the loans for Manafort in exchange for help securing a senior post under Trump. Calk was named to a Trump campaign economic advisory committee and interviewed for the job of Army under secretary but did not land that or any other administration job.
“Mr. Calk has done nothing wrong and will be exonerated at trial of the baseless isolated charge brought against him,” Jeremy Margolis, Calk’s lawyer, said in a statement.
U.S. Magistrate Judge Debra Freeman ordered that Calk be released on bail. He was required to surrender his passport, and his travel will be restricted to the continental United States.
Federal Savings Bank said in a statement it is a victim of bank fraud perpetrated by Manafort, and that Calk “has been on a complete leave of absence and has no control over or involvement with the bank.” The bank said it is “not a party to the federal criminal case” and described Calk as its “former chairman.”
Calk’s brother, John Calk, is currently serving as the bank’s CEO, according to the bank.
The indictment did not mention Manafort by name, but made clear he was the one who schemed with Calk.
Calk provided Manafort with a ranked wish list of government jobs, and Manafort recommended to Trump’s post-election transition team before he became president that Calk be appointed as Army secretary, the service’s top civilian post, according to the indictment. Calk served in the Army for 16 years, Margolis said.
Manafort used his influence with Trump’s transition team to land Calk a formal interview for the position of Army under secretary in January 2017, according to the indictment. Calk’s wish list also included treasury secretary or deputy secretary, defense secretary, commerce secretary and 19 ambassador posts in countries including Britain, France, Germany and Italy, prosecutors said.
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,” said Audrey Strauss, the top prosecutor overseeing the case in Manhattan.
Manafort was one of the first people in Trump’s inner circle charged by Special Counsel Robert Mueller as part of his now-completed investigation into Russian interference in the 2016 U.S. election and Trump campaign contacts with Moscow.