After the one-term president pardoned his one-time campaign manager Paul Manafort for tax and bank fraud, the undoing of justice included the snipping of a government padlock on the front gate of a brownstone at 377 Union St. in Brooklyn and the removal of a sign in the door that read:
Property of United States Marshals Service.”
The brownstone was one of three New York properties that were seized when Manafort was convicted, and similar undoings of justice were performed at a condo in Soho and a home in the Hamptons that featured a putting green, a waterfall, and a moat. The “full and unconditional pardon” bearing the outsized Sharpie signature of Donald J. Trump meant that Manafort got them all back.
But the pardon does not cover the bank chairman who pushed through $16 million in mortgages on Manfort’s properties in the immediate aftermath of the 2016 presidential election. Stephen Calk, CEO and chairman of the board of the Federal Savings Bank of Chicago, is scheduled to go on trial next month in Manhattan federal court, having pleaded not guilty to charges that he contravened his own institution’s guidelines to push through the loans with the hope of securing an appointment in the Trump administration.
The indictment charges that Calk caused his bank to extend $16 million in loans in exchange for Manafort assisting his quest to obtain “various positions for Calk, including Secretary of the Treasury, Secretary of Defense, and Secretary of the Army.”
The indictment further alleges that Calk “was aware of significant red flags regarding the borrower’s ability to repay the loan, such as his history of defaulting on previous loans.”
As set forth in the indictment, Calk had a long phone conversation with Manafort four days after the elections. Two days after that, Calk emailed Manafort a bio and a document with the heading “Stephen M Calk Perspective Rolls [sic] in the Administration.” There followed a list of “rolls” beginning with secretary of the treasury, secretary of commerce and secretary of defense, along with 19 ambassadorships, topped by Britain, France, Germany and Italy.
Court papers show that Calk emailed Manafort later that same day.
“Are you aiding in the transition in any type of formal capacity?” Calk asked.
“Total background, but included, directly,” Manafort emailed back.
”Awesome,” Calk replied.
Calk apparently narrowed his ambition the following day, when he sent Manafort a document headed, “Stephen M. Calk—Candidate for Secretary of the Army.”
“Will you please review the attached document prepared at your request and advise what changes and improvements I should make,” Calk wrote. “My goal is to ensure you or my designated prosper [sic] has all of the information they need to have me successfully chosen by the President-Elect. I look forward to your response.”
Calk noted a quality that he felt qualified him for the job.
In the meantime, Calk pushed through a $9.5 million loan. Manafort was asking for another $6.5 million. He got it.
Calk remained hopeful, as reflected in a Dec. 5, 2016, email to Manafort.
“President Elect Trump will be in Michigan on Friday,” Calk wrote. “Should we arrange a meeting while he is nearby? Do you think we are making any progress re: SECARMY?”
“He is not doing meetings on the road on these types of matters,” Manafort replied. “I will be calling you later today with updates.”
On Jan. 10, Calk arrived at Trump Tower for a formal interview with the transition team as a candidate for under secretary of the Army.
“Calk was not ultimately hired,” the indictment notes.
But he was indicted, having come to the attention of Special Counsel Robert Mueller’s investigators who were delving into Manafort’s dealings in Russia and the Ukraine. Manafort had originally purchased the Brooklyn brownstone in November of 2012 with two wire transfers from Cyprus that investigators suspected was money laundering.
In justifying the disparity between the current value of the brownstone and the $6 million from Calk’s bank, Manafort made a fraudulent written guarantee that he would put $1.4 million into renovation of the property. Manafort's subsequent indictment notes, “When the construction loan closed, MANAFORT used hundreds of thousands of dollars from the construction loan to make a down payment on another property in California.”
When news broke that Manafort had been indicted, there was a sudden flurry of renovation at the brownstone. The work ceased just as abruptly when Manafort pleaded guilty. He was sentenced to seven and a half years in prison. The brownstone and the two other New York properties were seized.
On Union Street, justice took the form of a government padlock on the front gate and a sign announcing that it was now property of the United States Marshals Service. The marshals are terrific at such things as seizing property and hunting down fugitives but they are not much at keeping things tidy. The front yard of 377 Union St. became an overgrown eyesore on a block of well-tended front gardens. Neighbors could only hope that the government would quickly sell it to somebody who would take as much pride in the place as they do in theirs.
But when the lock was clipped and the sign came down, it was because Trump had pardoned Manafort before the government could make a sale on a place whose appraised value had risen to more than $6 million. The front door was left secured only by a loose length of steel cable that allowed a gap big enough for easy entry. A neighbor, Dr. Phyllis Gelb, saw that a second door just inside the entrance had been left open and called the police last Friday, concerned there had been a break-in.
“The cops came, they went through the whole thing,” Gelb told The Daily Beast this week. “They said, ‘It looks beautiful, that place is beautiful.’ It’s almost finished. It has a roof deck. It’s a great view. It’s all glass in the back. They loved it.”
She added, “One of them wanted to go squat there. He wanted to go take a picture with me and put it on Twitter. I thought it was a great idea, but somebody might take it the wrong way.”
Had the cops found somebody in the building, they likely would have arrested the person for burglary. The man convicted of committing multiple felonies in securing ownership of the brownstone and partly renovating it while pocketing an undetermined amount of cash was a free man and now held title to it again.
But even executive clemency does not extend to outstanding mortgage debt, and the Federal National Bank that Calk once ran is now seeking to foreclose on the property, along with the other two that were purchased with its $16 million. The front garden may become a jungle by the time that matter is resolved.
And on June 22, the man of many “rolls” who would have happily settled for undersecretary of the army goes on trial for arranging loans that never should have been in exchange for Manafort’s assistance in securing an appointment that was never to be.