Stephen Calk, 54, is a Chicago banker whom federal prosecutors say “engaged in a corrupt scheme” to bribe his way into a high-level position within the Trump administration.
Calk, the now ex-chairman and CEO of the Federal Savings Bank in Chicago, is accused of securing $16 million worth of loans for Donald Trump’s former campaign chairman, Paul Manafort. Manafort, who is currently serving a prison sentence for charges including financial fraud, made Falk a member of the campaign’s Economic Advisory Council. But Calk was not hired for a permanent position after the election.
The indictment against Calk was filed in the Southern District of New York and unsealed on May 23, 2019.
Here’s what you need to know.
1. Prosecutors: Stephen Calk Approved Massive Loans to Paul Manafort Despite His Own Staffers’ Concerns About Manafort’s Ability to Repay the Bank; Calk Talked About Wanting to Join the Campaign During Their First Meeting in July 2016
Stephen Calk knew that Paul Manafort needed loans in order to avoid foreclosures on several properties he owned, prosecutors wrote in the indictment. He would also have been aware of the risk that his institution, the Federal Savings Bank, was taking on because Manafort reportedly had a “history of defaulting on prior loans.”
Calk participated in a meeting via videoconference with Manafort and the New York-based loan officer in July of 2016. Prosecutors wrote that that the purpose of the meeting was to discuss refinancing a loan Manafort had in relation to a construction project in Los Angeles. It was during this meeting that Calk allegedly first brought up the fact that he was interested in a job with the Trump campaign.
The next day, the bank approved the refinancing to the amount of $5.7 million. The amount had been increased several times, according to the indictment, despite other bank staffers speaking up about concerns they found in Manafort’s paperwork. For example, they found that Manafort had defaulted on the previous loan and had a $300,000 credit card delinquency.
In October of 2016, the terms of how Manafort would repay the loan also changed. Initially, Manafort was to pay it back through the sale of the Los Angeles property. But this was changed to say that Manafort would repay the loan from his own income, despite the concerns raised about his ability to do so. The initial installment, valued at $9.5 million, went through a few days after Donald Trump won the election.
2. Stephen Calk Personally Signed Off on an Additional $6.5 Million Loan to Manafort Following More Detailed Discussions About Which Job Calk Might Obtain in the White House
The Federal Savings Bank ultimately lent approximately $16 million to Paul Manafort. Stephen Calk was “personally involved” in lending an additional $6.5 million to Manafort after the 2016 election, on top of the $9.5 million that had already gone through.
Prosecutors wrote in the indictment that Calk was aware of Manafort’s “urgent need” for financing. One of the properties Manafort owned in Brooklyn, which was supposed to be used as collateral for the additional loan, had entered foreclosure proceedings.
The indictment explains that the loans totaling $16 million violated the bank’s “legal limit on loans to a single borrower.” To get around that policy, Calk reportedly “authorized a maneuver never before performed by the bank, in which the Holding Company- which Calk also controlled- acquired a portion of the loans from the bank.”
As the loans were being processed, prosecutors say Calk was sending Manafort documents detailing which positions Calk was most interested in having at the White House. On November 30, 2019, Manafort emailed the loan officer and Calk to ask when he might receive the $6.5 million loan, writing that the “clock is ticking and we are getting pressure on a number of fronts.” Around the same time, Manafort sent a message to a member of the Trump transition team recommending that Calk be considered for Secretary of the Army. The $6.5 million loan went through in early 2017.
The Federal Savings Bank ultimately wrote off a loss of $12 million due to these dealings. Manafort stopped making payments after he was charged in October of 2017.
3. Calk Was Part of the Trump Campaign’s Economic Advisory Council; He Was Interviewed For an Administration Position But Was Not Hired
Stephen Calk became involved with the Trump campaign shortly after his first meeting with Paul Manafort in July of 2016. Manafort asked if he would be interested in being a member of the Economic Advisory Council. Calk includes the position on his LinkedIn profile, writing that he was a senior economic advisor for the president-elect until January 2017.
Calk wanted a senior position within President Trump’s Cabinet. According to the indictment, Calk sent Manafort a list of all of the positions he was interested in filling on November 14, 2016. “The list included 10 Cabinet secretary, deputy secretary, and undersecretary positions ranked by order of preference. Calk’s list started with Secretary of the Treasury, Secretary of Commerce, and Secretary of Defense, as well as 19 ambassadorships similarly ranked and starting with the United Kingdom, France, Germany and Italy.” The first loan to Manafort, valued at $9.5 million, closed on November 16, 2016.
Prosecutors say Manafort urged the transition team to consider Calk for Secretary of the Army while they were negotiating the additional $6.5 million loan. According to the indictment, Manafort did not disclose the nature of his relationship with Calk to anyone within the president-elect’s transition team. They did eventually interview Calk on January 10, 2017, for Undersecretary of the Army. But Calk was not offered the job.
4. Prosecutors: Stephen Calk Lied to Financial Regulators & Could Face Decades in Prison if Convicted of Bribery
Stephen Calk is identified as the chairman and chief executive officer of Federal Savings Bank in the federal indictment filed in the Southern District of New York. But it appears Calk has parted ways with the institution he created. Calk updated his LinkedIn profile to reflect that he stopped working for the bank in May of 2019 after nearly 24 years.
Calk’s legal problems began in March of 2017, after details of his relationship with Manafort were revealed in a newspaper article, according to the indictment. Officials from the Office of the Comptroller of the Currency interviewed Calk shortly afterward. He denied knowing that Manafort’s Brooklyn property was in foreclosure. Prosecutors say Calk lied to the OCC officials about what he knew concerning Manafort’s finances and “falsely stated to the OCC regulators that he had never desired a position in the presidential administration.”
The OCC regulators also analyzed the loans given to Manafort. They downgraded the credit quality to “substandard,” which means that the bank can expect to take a loss. As referenced above, the bank did end up losing $12 million due to its dealings with Manafort.
Calk has been charged with Financial Institution Bribery and could face as many as three decades in prison if convicted. The New York Times reported that Calk “would likely receive a lesser sentence” if found guilty.
5. Stephen Calk Was an Aviation Officer in the U.S. Army & Graduated From Northwestern University
Stephen Calk had been interested in Cabinet positions such as Secretary of Defense likely due to his personal background in the military. Calk served in the Army as a Tactical Helicopter Pilot from 1985 through early 2001, according to his LinkedIn profile.
Calk is also a member of the board of directors for the USO of Illinois. As of this writing, his name was still listed on the organization’s website. The USO is a non-profit organization that engages in outreach programs for military members and their families.
Calk was also in school throughout his military career. He has a bachelor’s degree in marketing from the University of Illinois and an MBA from Northwestern University. According to his LinkedIn, Calk is also a graduate of the Harvard Business School.