Prosecutor: Stephen Calk, Chicago banker in Manafort trial, is ‘co-conspirator’

WASHINGTON — As the criminal trial of former Donald Trump campaign manager Paul Manafort heads into its 10th day, the prosecution is now saying a Chicago banker who’s been a figure in the case is a “co-conspirator” with Manafort.

Outside the earshot of the Manafort jury and the rest of those attending the trial, a federal prosecutor on Friday also told the judge hearing the case the banker, Stephen Calk, could face unspecified “criminal liability.”

It’s unclear whether that statement has anything to do with Calk’s efforts to get a job in Trump’s administration and the $16 million in loans Manafort got from Calk’s bank, or is completely unrelated to that.

The conversation shedding some light on the pay-to-play aspect of the Manafort bank-and-tax fraud case came up in a bench conference between U.S. District Court Judge T.S. Ellis III, prosecutor Greg Andres and Manafort defense attorney Richard Westling.

Though jurors and the public didn’t hear the conversation, a court reporter was there and it is part of the record of the Manafort trial, unfolding in the Alexandria, Va., federal courthouse.

The side issue that prompted the conference was whether the testimony of a witness — a former Calk employee — should be considered hearsay and not allowed in Manafort’s trial. A judge can make an exception to hearsay bans if a determination is made that it involves a co-conspirator and an alleged conspiracy.

Andres said in the sidebar conference, the “conspiracy is that Mr. Manafort — you will learn through this witness and the next that Mr. Manafort was submitting both false documents and other material to the bank, and notwithstanding the fact that he wouldn’t have otherwise qualified for those loans, Mr. Calk approved those loans, and it’s the government’s theory that he did that because he was trying to obtain a position within the Trump administration.”

Later, Andres said, “Mr. Calk has other criminal liability aside from this bank fraud.”

The break for the huddle occurred as Andres was grilling witness Dennis Raico, a former executive based in the New York office of The Federal Savings Bank headquartered at 300 N. Elizabeth in Chicago.

Calk is the founder and CEO of the bank.

Though his name has come up often during the trial, Calk is not a witness in the case against Manafort brought by Special Counsel Robert Mueller.

Calk has not been charged with any wrongdoing. Messages have been left with two spokesmen for his bank; this column will be updated to reflect any comments.

Raico testified under a grant of immunity. James Brennan, a senior credit officer at the bank, who was part of the Chicago-based credit committee considering the Manafort loan deal, will testify on Monday, also under a grant of immunity.

What Raico told the Manafort jury

Raico testified on Friday that Calk pushed for a cabinet spot in the Trump administration — either secretary of Treasury or Housing and Urban Development — as he personally intervened to make sure his bank gave Manafort two loans totaling $16 million even as others in the banks said they had doubts.

Raico told jurors that in 2016, “I received a call from Steve Calk on Nov. 11, and Steve had said to me that he had not spoken with Mr. Manafort in a day or two and thought that he would possibly be up for some role in the Trump administration, and had asked me if I would call Paul and see if he was a potential candidate for secretary of the Treasury or secretary of HUD.”

Raico did not make the call because “it made me very uncomfortable.”

Manafort served as Trump’s campaign manager between May 19 and Aug. 19, 2016.

Earlier in the trial, Rick Gates, a former top Manafort deputy at the campaign, testified that Manafort was proposing Calk for Army secretary and for a post on the Trump campaign economic advisory council — which Calk got. Gates testified as part of his plea deal.

Raico also testified that Calk ignored red flags about the accuracy of the Manafort financial information and went around his top executives, who raised concerns about whether Manafort could pay back the loans.

What happened during the break in Raico’s testimony

When Andres started a line of questioning with Raico about conversations between Manafort and Calk, Judge Ellis broke in and asked, “Wouldn’t this be hearsay?”

Andres said no, and the judge asked the lawyers to come to the bench to explain, with the conversation recorded by the court reporter.

Westling, Manafort’s lawyer, objected to Raico telling the court what Calk told him since Calk is not a witness “and not available for cross-examination.”

Replied Andres, “Mr. Calk is a co-conspirator, and he participated in the conspiracy to defraud the bank.”

The judge challenged Andres on whether Calk’s quest for a Trump job amounted to a conspiracy to “commit some bank fraud.”

Andres said Manafort would not have qualified for the loans without Calk, and “it’s the government’s theory that he did that because he was trying to obtain a position within the Trump administration.”

Andres acknowledged his position was based on circumstantial evidence. He also told Ellis that Calk, with his brother, owns about 80 percent of the bank.

The judge then pressed Andres, “Now, tell me one more time what evidence do you expect me to hear that I haven’t already heard that goes to the question of whether Mr. Calk and Mr. Manafort conspired to commit fraud against the bank of which Mr. Calk owned a substantial amount of the stock, maybe even as much as 80 percent with a family member?”

Replied Andres, “So, your honor, it’s not — I’m not sure that it’s clear that Mr. Calk is involved necessarily. Mr. Calk has other criminal liability aside from this bank fraud.”

Ellis said, “Yes, but all I’m interested in is this hearsay statement” and did not ask for details.

When court resumed Friday, Andres dropped the question that sparked the conference and asked Raico about something else.