ALEXANDRIA, VA — Dennis Raico, a witness who worked at a bank that extended Paul Manafort $16 million in loans, testified at Manafort’s trial Friday that Manafort was approved for the first of these loans the day after a meeting with the bank’s CEO Stephen Calk. During the meeting, Raico said, Calk expressed interest in working for Donald Trump.
The meeting took place on July 27, 2016, with Calk videoconferencing in and Raico and Jeffrey Yohai, Manafort’s then-son in law, in attendance.
Manafort submitted the loan documents to the bank, Federal Savings Bank in Chicago, that day. Raico testified that he never saw a loan approved so quickly. The proposed loan was a construction loan for Manafort and Yohai for a property in California.
On Aug. 3, Manafort emailed Raico seeking Calk’s resume. Early that month, while Manafort was still chair of the Trump campaign, Calk became an economic adviser to Trump. Manafort left the Trump campaign on Aug. 19.
Raico testified that Manafort continued to pass messages along to Calk through him. Raico said that on Nov. 11, 2016, three days after the election, Calk called Raico and told him that he hadn’t heard from Manafort in a couple of days and that he thought that he would “possibly be up for some role” in the Trump administration. He asked Raico to call Manafort.
But Raico said he did not make the call. “It made me very uncomfortable,” Raico testified.
Throughout Raico’s testimony, prosecutors submitted evidence suggesting that Manafort provided false or misleading information to the bank while applying for the loan, including what appear to be inflated income statements for his consulting firm.
Among the documents they questioned Raico about was the apparently doctored DMP financial statement the prosecutors had previously admitted into evidence last week, when Manafort’s bookkeeper testified that her company’s records for Manafort showed his business income to be millions of dollars less than what was reported on the statement submitted to the bank.
U.S. District T.S. Ellis wouldn’t let prosecutors question Raico about the details in the financial record, which included the mispelling of the word “September,” after the defense objected since Raico had testified that he had not analyzed the document at the time Manafort was applying for the loan.,
Testimony and evidence also suggested that Manafort blamed a $300,000 delinquency on his credit card on Rick Gates borrowing the card to purchase Yankees tickets, even though Gates previously testified that he did not buy the tickets. Raico said the details about debt were important to the bank as it processed the loan.
Raico also testified that Calk was “very involved” in approving the loans and had lunch meetings with Manafort without other bank employees present. Raico said that the two discussed the terms of the loan during those lunches and that Calk dictated the terms of the first loan approved for Manafort after the two lunched together.
Prosecutors also showed an Oct. 21, 2016 email in which the president of Federal Savings Bank Javier Ubarri told Raico and other employees that they would not move forward with the construction loan Manafort was seeking. Two days prior, while at the closing table, Manafort had balked at how expensive the loan was going to be for him to pay for, due to certain New York taxes.
“Let’s all stay friends, move on and go our own way,” Ubarri wrote in an email. When he was cross-examined by the defense, Raico clarified that Ubarri was referring to the construction loan and not the kind of loan that Manafort would ultimately be extended.
Raico testified that he had spoken to Calk earlier in the day and that Calk had said they would move forward with a new loan proposal. That $9.5 million loan, which would ultimately close on November 16, would be a mortgage for Manafort solely on his Hamptons home.
Asked if Calk had approved the new loan proposal between Ubarri’s email and when Raico wrote Ubarri back later that day to inform him that Calk was moving forward in his Manafort negotiations, Raico testified, “I believe so.”
During the approval process for the restructured $9.5 million loan, Manafort told Calk in an email that he “must have had a blackout” and mistakenly given Calk the wrong information on his mortgage on the Hamptons home, according to an email shown during Raico’s testimony.
“I look to your cleverness on how to manage the underwriting,” Manafort wrote later in the email to Calk.
Calk responded that he would look into it and suggested Manafort may need to use his Virginia home as collateral for the loan.
During his cross-examination, Manafort attorney Richard Westling questioned Raico on the appraised value of the properties he put up as collateral for the home, to suggest that since the collateral was worth more than the loans themselves, the loans were less risky for the bank.
Manafort’s former deputy, Rick Gates, testified earlier this week that Calk later unsuccessfully sought a job in the Trump administration with Manafort’s assistance. In a Nov. 24, 2016 email, Manafort wrote to Gates, “Rick, we need to discuss Steve Calk for Sec. of Army. I hear the list is being considered this weekend.” Gates had stayed on the Trump campaign after Manafort left in August.
Gates testified that Manafort also helped Calk secure tickets to the inauguration.
Manafort is on trial here facing bank and tax fraud charges. He has pleaded not guilty to all charges. Previous witnesses at the trial have indicated that, during the period in question, Manafort’s income from working as a political consultant overseas had dried up. Manafort managed the Trump campaign for free.
An FBI search warrant that was partially unsealed earlier this summer alleged that Manafort made “several materially inconsistent representations during the process of negotiating” loans with Federal Savings Bank, and Mueller’s team alleges that Calk knew that the loans his bank extended to Manafort were fraudulent. During a pretreial hearing, Judge T.S. Ellis asked prosecutor Greg Andres whether Calk knew the information on Manafort’s loan application was inaccurate. “He did,” Andres replied at the time.
Manafort was later approved for a $6.5 million construction loan for his home on Union Street in New York, and closed on that loan on Jan. 4, 2016, before Trump was sworn into office.
Correction: This post originally reported that the $300,000 delinquency on Paul Manafort’s credit card was $30,000.