Dennis Raico, a senior vice president at Federal Savings Bank, testified Friday that bank CEO and Trump fan Steve Calk repeatedly put his thumb on the scales to help former Trump campaign manager Paul Manafort get $16 million from two loans just after the presidential election—a $9.5 million one on November 16, 2016 and a $6.5 million dollar one in January 4, 2017—as the men discussed the Trump campaign and a possible job for Calk in the administration.
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Match made in MAGA: Raico said Manafort first started seeking loans from Federal Savings Bank in April of 2016 and that he brought Manafort—then the Trump campaign’s convention manager—to the attention of CEO Calk because of their mutual interests. “I came to learn that Mr. Manafort was involved in politics and I knew Steve [Calk] was interested in politics,” he told the jury. Their interest in politics wasn’t just abstract. Both were Trump supporters and Calk later joined the Trump campaign as an economic adviser.
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Politics and business: In May 2016, Calk had dinner with Manafort and Federal Savings Bank employees at The Capital Grille on Broadway in Manhattan and Raico testified the two sat close together. What did they talk about? “Loans, politics,” according to Raico, who said that seeing his bank CEO mixing his own politics with the bank’s loan decisions “made me very uncomfortable.”
Raico also said that Calk was using him as a go-between to get messages to Manafort—another source of anxiety. While Manafort was still chairman of the Trump campaign in early August 2016, he sent Raico an email asking for a copy of Calk’s resume. Asked why he understood Manafort had asked for the CEO’s resume, Raico testified that it was “because Mr. Calk asked if he could serve the Trump administration.”
Quid pro HUD? On November 11, just a few days after Trump won the election, Calk asked Raico to reach out to Manafort as the two hadn’t spoken in a few days. Calk, Raico said, “thought he would be up for Treasury or HUD” in the incoming Trump administration and wanted to talk to Manafort. The defense raised the issue of hearsay when prosecutor Greg Andres asked whether Raico understood Calk to be “seeking something” from Manafort after the election. When pressed by Judge Ellis, Raico said he had “nothing concrete” to go on besides his own thoughts.
Team Mueller certainly thinks so: Andres snapped everyone in the courtroom to attention when he had Raico emphasize that Federal Savings granted Manafort’s first loans around politically significant events like the 2016 election and President Trump’s inauguration
Followup? The testimony came after Rick Gates told the court earlier in the week that Manafort emailed him on November 24 that, "We need to discuss Steve Calk for Sec of Army. I hear the list is being considered this weekend.” In other words, just shy of two weeks after Calk said he wanted to talk to Manafort and thought he was in line for a job as Treasury Secretary or Secretary of Housing and Urban Development, Manafort emailed a Trump campaign staffer for help in getting Calk a different senior job in the administration.
Problems: Of the two loans that Manafort took out from Federal Savings Bank, the $9.5 million borrowed against his estate in the Hamptons was the riskier one for the bank. His $6.5 million loan against his house in Brooklyn was a construction loan, meaning it was short term, could be paid back based on the expected value of the home once construction was finished, and was based primarily on the value of the home. Manafort’s Hamptons loan, though, was a cash out refinancing, which meant that his income would be the most important component in assessing his creditworthiness. And as we heard time and again over the past two weeks, Manafort’s business had negative income.
Despite bank employees noting Manafort’s consulting business books didn’t add up with the income he had reported on his taxes (“they’re considerably different” one employee noted), that loan, too, was ultimately approved — even though Manafort had under-reported the amount of existing debt on his Hamptons estate to the tune of about a million dollars. “There’s a major issue,” Calk wrote in an email about the unreported debt. Manafort explained it by saying cryptically that it “must’ve been a blackout,” and said “I look to your cleverness in how to manage the underwriting process” in an email to Calk.
Unusual: Andres kept trying to draw out Raico on how unusual Manafort’s mortgage process had been. Raico testified that Manafort’s loans were approved astoundingly fast, and that it was unheard of in his experience to have the CEO of a bank get so personally involved in pushing a loan. Raico described Calk as “very involved” and “directly involved” in the loan process and said that he and other employees were stunned when Manafort ground the mortgage process to a halt at the closing table and then sent Federal Savings a letter dictating the terms sheet for another. As Raico explained, Federal Savings wasn’t used to customers bossing around its mortgage team and writing their own term sheets.
Ellis inserts himself again: When Andres raised the terms issue, Ellis barked out from the bench in an angry tone “Well is there anything wrong with that?” It’s becoming something of a pattern. Ellis kept giving Mueller’s team flack for their attention to Manafort’s wealth last week, suggesting that they were trying to implicate the defendant for his wealth. On Thursday, Ellis barked at the prosecution again for dwelling on a bank fraud allegation where the loan was ultimately denied.
Yankees: It wouldn’t be a story about cheating without a Yankees angle, now would it? One of the obstacles to Manafort’s creditworthiness when applying for loans at Federal Savings Bank was the more than $200,000 outstanding debt to the New York Yankees on his American Express credit card. Gates testified earlier in the week that Manafort directed him to lie in a letter to the bank that he had borrowed Manafort’s credit card to buy the tickets and was in the process of paying it back soon.
Ordinarily, the defense would’ve tried to pull the Gates credibility issue to try and explain away the charge. But Yankees senior director of ticket operations Irfan Kiranca read aloud from emails between Yankees staff and Manafort showing him repeatedly ordering his Legend Suite season tickets for delivery to his 5th Avenue apartment and telling employees that he would be using them for Opening Day in 2016.
Mystery delay: The public part of the trial didn’t begin until around 2 in the afternoon Friday, after a series of unusually long and serious sidebars involving the full prosecution and defense teams. The delay seemed out of character for the vocally impatient Judge Ellis, and the court security officer appeared in the sidebar huddle at times, leading to speculation that it could involve some kind of issue with the jury. In any case, Ellis never explained the delay when testimony resumed and all 16 jurors returned to their seats.
When dismissing the jurors for a recess shortly thereafter, Ellis ad-libbed a bit to his usual instructions not to discuss the case among themselves or with anyone, saying that “even a comment about a witness’s clothing” would be out-of-bounds, and then adding the caveat that he wasn’t necessarily suggesting that such a comment had taken place.
Narrative: The government’s evidence is starting to fit into a pretty clear narrative. Manafort was living well from 2010 to 2014 when his pro-Russian oligarch buddies were making him rich with political consulting fees and committing the crimes of a rich man—namely, hiding his bountiful income from the government through shell companies and wire transfers. When the revolution in Ukraine threw his pro-Russian buddies out of power, Manafort’s business started going under so he began committing the crimes of a financially desperate man, like bank fraud. The Trump campaign, in this scenario, would’ve been Manafort’s Hail Mary pass to revive his political consulting career.
