Stephen Calk

Stephen Calk (b. 1964/1965) is founder and CEO of the mortgage lender Federal Savings Bank of Chicago and was an economic advisor to Donald Trump during the 2016 election campaign. Calk is a former US Army officer and helicopter pilot. Calk achieved national notoriety after reports that he had approved large loans from his bank to Paul Manafort, Donald Trump's former campaign manager.

Early career

Calk was born in Detroit, Michigan, and was raised in Florida, Illinois, and London. He attended the United States Military Academy Preparatory School, and is a 1983 graduate of the University of Illinois at Urbana–Champaign. Calk received a Master of Business Administration degree from the Kellogg School of Management at Northwestern University, and has also completed courses for senior executives at the Harvard Business School. Calk received a commission as an Army officer, and served as a helicopter pilot from 1985 to 2001, including both active and reserve duty.

Calk's banking career began in Kansas, where, with his brother John, he focused on issuing mortgages on single-family homes to veterans.

Before running the Federal Savings Bank of Chicago, Calk was president and co-owner of Chicago Bancorp, which has been described as "once one of the largest privately held retail mortgage banks in the country." It was dissolved in 2012. Calk, Chicago Bancorp, and the Federal Savings Bank of Chicago were sued in 2012 and again in 2014 by CitiMortgage, for alleged inaccuracies and misrepresentations in loans that Calk's enterprises had originated and later sold to CitiMortgage. Calk moved his bank's headquarters to Chicago in 2014 after the city offered him tax breaks.

In 2014, the Federal Savings Bank of Chicago signed an agreement to cooperate with the New York City real estate firm Douglas Elliman, and in exchange, either Douglas Elliman or its parent company, the Vector Group, invested $2 million in Calk's bank, according to a 2015 deposition by Howard Lorber, the Vector Group's CEO. The collaboration foundered, however, and was terminated in 2014. In his 2015 deposition, Lorber called Calk difficult to work with and called Calk's account of their collaboration "completely delusional." Lorber, a longtime friend and ally of Trump's, later served with Calk on the Trump campaign's economic council.

Loans to Paul Manafort

Manafort first got in touch with Calk's Federal Savings Bank of Chicago in April 2016, according to testimony given by the bank's senior vice president Dennis Raico at Manafort's August 2018 trial for fraud and tax evasion. Manafort, Calk, and Raico discussed loans and politics over dinner in New York in May 2016. On July 28, Calk became directly involved in discussions about loans to Manafort and his son-in-law for investment properties, which Raico told the court was unusual. Subsequently, over a lunch, Calk and Manafort discussed another loan. On October 6, 2016, Manafort emailed Calk to say that he had been mistaken in saying at this lunch that he owed $2.5 million on a Bridgehampton, New York, property that he intended to use as collateral. In fact he owed $3 million. "I must have had a blackout," Manafort wrote in his email. On October 16, Manafort asked to change the terms of the loan, requesting a line of credit on the property instead of using it as collateral for a construction loan for a California property. In his application materials for the loan, Manafort provided a 2016 income statement for himself that his business partner Rick Gates later testified was false.

James Brennan, another vice president at the bank, testified at Manafort's trial that Manafort failed to declare in his application materials that two of his New York properties were already mortgaged and that Manafort's statements about his income in 2015 were inconsistent. Brennan also testified that bank employees had noticed that Manafort seemed to have no income as of July 2016, though he claimed to be owed $2.4 million, that he was more than 90 days late on a $300,000 credit card bill. Concerns within the bank about the propriety of the loan were overruled by Calk, however, and on November 16, 2016, Manafort received from Calk's bank a $9.5 million cash-out refinance loan on a house in Bridgehampton, New York. "It closed because Mr. Calk wanted it to close," Brennan testified. On January 4, 2017, Manafort received an additional loan from Calk's bank, a $6.5 million construction loan on a property on Union Street in New York City. The two loans, totalling about $16 million, were the largest and second-largest ever issued by the bank. The combined size of the loans at the time represented around 5 percent of the bank's asset base of $341 million, and represented about 22 percent of the bank's equity capital of $72 million.

The bank has since written the loans off as a loss.

Investigation

At a 2018 bail hearing and in a superseding indictment filed against Trump's former campaign manager, Paul Manafort, the office of U.S. Special Counsel Robert Mueller alleged that Manafort had fraudulently applied for around $16 million in loans from "Lender D," reported by multiple sources at the time as the Federal Savings Bank of Chicago, before and shortly after the 2016 presidential election. In court filings Mueller alleged that Manafort had doctored financial statements from his lobbying firm, "overstating its income by millions of dollars," and had committed a "series of bank loans and bank loan conspiracies." In February 2018 the Wall Street Journal and other media outlets reported that Mueller's office was investigating whether there had been a quid pro quo arrangement in which Calk approved the loans in return for a position in the Trump administration as Secretary of the Army.

Calk had been named to the Trump campaign's economic advisory panel in August 2016, at Manafort's suggestion, several months after they had begun discussing a possible loan for Manafort. During Manafort's August 2018 trial, prosecutors introduced as evidence emails from Calk showing that on August 4, 2016, he wrote Manafort that "I am happy and willing to serve," and that in November, just after Trump's election, he sent Manafort a resume and a request to be nominated Secretary of the Army, adding that he would also be willing to serve as chief of the departments of Treasury, Commerce, Housing or Urban Development, and Defense, or as ambassador to the United Kingdom, France, Germany, Italy, Spain, Japan, Ireland, Australia, China, United Nations, the European Union, Portugal, the Vatican, Luxembourg, Austria, Switzerland, the Netherlands, or Singapore. After Trump's election, Calk instructed Dennis Raico, a senior vice president for Calk's bank, to ask Manafort whether Calk might be named Secretary of the Treasury or Secretary of Housing and Urban Development, according to testimony at Manafort's trial by Raico, although Raico also testified that, embarrassed by the request, he never did ask. During the presidential transition, Manafort wrote in an email to his former deputy Rick Gates, then serving on the inauguration committee, that "we need to discuss Steve Calk for Secretary of Army." On November 30, 2016, Manafort sent an email to Jared Kushner recommending Calk be named Secretary of the Army, to which Kushner replied, "On it!" Shortly before Christmas 2016, Manafort added Calk and Calk's son to a list of people to be invited to Trump's inauguration.

Calk did not become a finalist for any government positions in the Trump administration.

External links

• Federal Savings Bank of Chicago