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Mueller Examines Manafort Loans

Special counsel is probing whether Trump’s former campaign chairman engaged in a quid pro quo arrangement

By Erica Orden and Michael Rothfeld Feb. 21, 2018 7:25 p.m. ET 148 COMMENTS
https://www.wsj.com/articles/mueller-examines-manafort-loans-1519259125

Special counsel Robert Mueller and federal prosecutors in New York are examining as much as $16 million in loans that a bank run by a former campaign adviser to President Donald Trump made to former campaign chairman Paul Manafort, according to court filings and a person familiar with the two investigations.

The investigation by Mr. Mueller’s team is centered on whether the loans from Federal Savings Bank, a small bank in Chicago run by chief executive Steve Calk, were made as part of a quid pro quo arrangement to secure Mr. Calk a job in Mr. Trump’s administration, the person said.

The investigation by the U.S. attorney’s office in Manhattan is focused on possible money laundering, and the two probes are intertwined, the person said.

A spokesman for Mr. Manafort said, “I don’t comment on rumors.” Mr. Calk didn’t respond to a request for comment.

Mr. Calk, who was a member of the Trump campaign’s economic advisory panel and overlapped with Mr. Manafort on the campaign, said last year the loans to Mr. Manafort were “absolutely not” related to his role in the campaign.

Around the time his bank made the Manafort loans in late 2016 and early 2017—for several properties including a Brooklyn townhouse—Mr. Calk was seeking to become Mr. Trump’s Army secretary, according to three people briefed on the interactions, The Wall Street Journal reported last year.

Mr. Calk was placing calls to the Pentagon and specifically to Army headquarters, asking for briefings to obtain information and prepare himself for a possible job, according to a person familiar with the inquiries. Mr. Calk’s overtures raised questions among military leaders as to how to respond, this person said.

Mr. Calk, a veteran whose bank caters to former members of the military, didn’t get the Army job.

The Journal subsequently reported that the Justice Department had sought Mr. Manafort’s banking records as part of a possible money-laundering probe.

The Mueller team’s examination of a possible quid pro quo arrangement between Messrs. Manafort and Calk was reported by NBC News earlier on Wednesday.

Mr. Manafort and a longtime business associate, Richard Gates, were indicted in late October by the special counsel’s office on charges of conspiring against the U.S., money laundering, failing to file reports on foreign bank and financial accounts, and making false statements connected to their work for a pro-Russian political party in Ukraine. Both have pleaded not guilty.

Mr. Mueller’s team indicated in a court filing last week that it had uncovered “additional criminal conduct” concerning some of the loans on Mr. Manafort’s properties from Mr. Calk’s bank.

“That criminal conduct includes a series of bank frauds and bank fraud conspiracies” related to property in Fairfax, Va., the filing said.

“The government has secured substantial evidence that Manafort secured this mortgage from The Federal Savings Bank through a series of false and fraudulent representations to The Federal Savings Bank,” the filing said, adding that Mr. Manafort gave the bank “doctored” financial statements for his company for 2015 and 2016 in which he overstated its income by millions of dollars.

Mr. Mueller’s office has been conducting its probe in collaboration with the U.S. attorney’s office in Manhattan, which has had a continuing investigation into Mr. Manafort and possible money laundering, the Journal reported in October.

Write to Erica Orden at [e-mail] and Michael Rothfeld at [e-mail]

https://www.wsj.com/articles/mueller-examines-manafort-loans-1519259125