U.S. Bank CEO Sentenced for Soliciting a Position in Trump Administration
An American bank CEO guilty of bribing the former head of Donald Trump’s presidential campaign to secure a senior position in the presidential administration was sentenced to one year and one day in prison, the U.S. Department of Justice (DOJ) reported on Monday.
Former chairman and chief executive officer of The Federal Savings Bank, Stephen M. Calk was convicted in July last year of financial institution bribery; he used his position as the head of the federally-insured bank to issue high-risk loans worth US$16 million to Paul Manafort—who chaired Trump’s presidential campaign between June and August 2016—in exchange for the chance to obtain a high-profile appointment in the administration.
It was his intention to buy Manafort’s influence within Trump’s inner circle in order to have his name put forward for a list of government positions he desired.
“Calk used the federally-insured bank he ran as his personal piggybank to try and buy himself prestige and power,” said Manhattan U.S. Attorney Audrey Strauss.
Specifically, he had his mind set on several high-profile and highly-influential appointments including but not limited to Secretary of the Treasury, Secretary of Commerce, Secretary of Defense, as well as 19 ambassadorships that included the United Kingdom, France, Germany, and Italy.
While Calk did manage to obtain an interview for Under Secretary of the Army in January 2017, he was not chosen for the position and his bribery scheme was ultimately for naught. Moreover, the bank incurred a multimillion-dollar loss when Manafort eventually defaulted on the loans.
The scheme began in July 2016 when Manafort sought millions of dollars from Calk’s bank.
Authorities report that “Calk understood that Manafort urgently needed these loans in order to terminate or avoid foreclosure proceedings on multiple properties owned by Manafort and Manafort’s family.”
There were reportedly several red flags that came up from Manafort’s loan applications, not the least of which was his history of defaulting on prior loans.
Seeing Manafort in a position of weakness, Calk reached out to Manafort and offered to extend him $16 million on behalf of the bank and of Calk’s Chicago-based holding company, National Bancorp Holdings, of which he owned 67 percent and was its chairman, CEO, and owner.
For the bank to approve a loan of that size by itself would have violated its legal limit on loans to a single borrower, which explains why Calk brought his holding company into the fold to assume a portion of the risk.
This manoeuvre reportedly had never been performed by anyone at the bank before, according to the DOJ.
While these loans were pending approval, he forwarded Manafort a ranked list of the government positions he desired.
Calk also lied about details within the loan applications to the Office of the Comptroller of the Currency (OCC) in order to conceal the unlawful nature of his bribery scheme.
For example, he falsely told OCC regulators that he was unaware of any foreclosures on Manafort’s properties prior to the issuance of the loans.
More glaringly, he stated that he did not desire a position in former President Trump's administration.
As a result of these lies, the bank’s credit committee conditionally approved Manafort for a proposed loan of $9.5 million in the summer of 2016. In an instant, Manafort had formed the single largest lending relationship on the bank’s books.
Days later, Manafort began to make good on his promise as he appointed Calk to a prestigious economic advisory committee affiliated with the Trump campaign, according to the DOJ.
And then in late 2016, shortly after Trump was elected the 45th president of the United States, Manafort reportedly “used his influence with the presidential transition team to assist Calk” by recommending him for an official position within the administration.
In repentance for his crimes, the courts sentenced Calk to serve one year and one day in prison as well as pay $1.25 million in fines. After his prison term ends, he will also serve two years of supervised release and commit to 800 hours of community service.
Manafort himself was convicted in August 2018 of bank fraud and tax fraud in an unrelated case. However, he was pardoned by Trump in December 2020, weeks before his presidential term of office expired.