Witness: Bank Prez Opposed Manafort Loan Approved By Bank CEO Trump Adviser

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An employee of Federal Savings Bank, where former Trump campaign chairman Paul Manafort successfully obtained $16 million in loans, testified Monday that the bank’s president opposed extending one of those loans to Manafort but was overruled by bank CEO Steve Calk, who served as an adviser on the Trump campaign.

“It closed because Mr. Calk wanted it to close,” bank vice president James Brennan said.

Prosecutors called Brennan to the stand as they make their case against Manafort for alleged bank fraud. He also faces tax fraud charges in the case in federal court in Virginia. Manafort has pleaded not guilty to all charges.

The trial, which resumed Monday afternoon after recessing on Friday, is entering it’s third week. Prosecutors are nearing the end of presenting their case, and the jury is expected to get the case later this week.

The loan, a $9.5 million mortgage on Manafort’s home in the Hamptons, came after a previous construction loan proposal for a property in California fell apart at the closing table.

Calk expressed to Manafort interest in working for Trump administration, a bank employee testified last week. An email revealed during trial suggested Manafort was eyeing the secretary of Army position for Calk, and another email showed Manafort trying to secure inauguration tickets for Calk.

Brennan also testified about concerns bank employees had about a loan application Manafort made that never closed, and Brennan said that some of those concerns applied to the loans Manafort later closed on with Federal Savings Bank. A memo created by another bank employee noted that Manafort had no income as of July 2016, even though Manafort claimed he was owed $2.4 million, and that Manafort was 90 days past due on a $300,000 credit card bill, a debt Manafort blamed on Rick Gates at the time.

“The large size of the delinquency is troubling,” the memo read.

Brennan also testified that bank employees discovered that Manafort had loans on two other properties but did not know which properties they were associated with.

“It was a definite red flag,” Brennan said Monday in court.

Asked again why the loans were ultimately approved, Brennan said that Calk told bank employees in an email that he wanted the loans approved.

Attorney Richard Westling began cross-examination of Brennan for the defense but did not complete his questioning before an afternoon recess. In his questions, Westling emphasized that Steve Calk and his brother had a majority ownership in the bank and the amount Manafort offered as collateral for the loans (which Brennan described as “pretty standard.”)

Westling asked Brennan if it’s acceptable for the borrower to create his or her own profit and loss statement for a loan application, a reference to prosecutors’ allegation that Manafort improperly inflated his income in his loan applications. Brennan said that it’s acceptable for the borrower to create the profit and loss statement.

Brennan was questioned by Westling on a loan memo he put together rating the proposal for the Union Street loan as a “4.” Brennan described the 4 rating as an “average” rating but one that allowed the bank to move ahead with extending the loan (a rating of a 5 would have prevented the loan from going through, he testified).

Andres, when he had another chance to question Brennan, returned to the question of the loan memo. Brennan said he didn’t believe the loan actually deserved the rating of a 4. When Andres asked if Brennan had a choice in giving it that rating, Brennan said no, adding that the loan was going through regardless.

Brennan also testified that the $9.5 million and the $6.5 million loans were the largest and second largest loans the bank had ever extended.

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