He is, by Wall Street standards, a small-time banker.
But in 2014, with Donald Trump eyeing a run at the White House, Stephen Calk stepped into the big-money world of New York real estate — and a network of Trump associates.
Doors opened for Calk, who was named to Trump’s economic advisory panel and whose bank lent millions to entities tied to Trump’s onetime campaign manager, Paul Manafort. The Federal Savings Bank, where Calk is founder, chairman and chief executive officer, also got a "seven-figure" investment from a firm run by one of Trump’s closest friends, Howard Lorber, according to court testimony not previously reported.
Calk, a former Army helicopter pilot, is now being drawn into various inquiries because of those loans to Manafort, whose real estate dealings and pro-Russia ties have come under scrutiny by state and federal authorities. The New York Attorney General’s Office and the Manhattan district attorney are probing Manafort’s real estate transactions. The U.S. special counsel investigating Russian efforts to interfere with the presidential election is also looking into Manafort’s finances.
Approached by reporters after a July 13 court appearance related to his divorce, Calk declined to talk. "I don’t want to be cannon fodder for something that happened months ago," he said.
Jason Maloni, a Manafort spokesman, defended the transactions, mentioning that the loan from Calk’s bank is at 7.25 percent, above the market rate. “Paul Manafort’s loan from Federal Savings Bank is an arm's-length transaction and sufficiently overcollateralized," he said. "Surely the loan represents a fraction of the bank’s total loan book, but that is a question for the bank and its loan committee.”
A spokesman with the Office of the Comptroller of the Currency, Bryan Hubbard, declined to comment about whether the regulator is looking into the loans that Federal Savings made to Manafort.
Calk, 52, was an unknown compared with other members of the Trump campaign’s initial 13-man economic council — Lorber, Thomas Barrack of Colony NorthStar and current Treasury Secretary Steven Mnuchin among them. Exactly how he was chosen for the council remains unclear.
Calk has said he met Trump at a charity event years ago; he met Manafort before the campaign, according to a source close to Manafort. Though the extent of those men’s relationships is unknown, Calk’s connections to Lorber can be gleaned in part from documents in court testimony. And they predate Calk’s work on the Trump economic team and his bank’s on the Manafort loans.
Lorber is CEO of the Vector Group, parent company of the New York real estate powerhouse Douglas Elliman Real Estate. Last year, Trump described Lorber, who is also chairman of Douglas Elliman, as one of his two best friends. In 1996, Trump and Lorber were together in Moscow exploring business opportunities, accompanied by Bennett LeBow, the Vector Group’s founder and chairman.
LeBow is a longtime player in both the cigarette and real estate industries in Russia and Ukraine. Among his former business partners is Vadim Z. Rabinovich, a Ukrainian politician who was elected to parliament in 2014 as part of the pro-Russia party that employed Manafort before he signed onto Trump’s campaign.
The Vector Group made a "seven-figure" investment in Calk’s bank, according to a 2015 deposition by Calk; Lorber in a 2015 deposition put the figure at $2 million, though he wasn’t sure if the investment was made by Vector or Douglas Elliman. Neither of the men said when the investment was made.
The previous year, Calk’s bank had signed an agreement with Douglas Elliman to send business its way. Dottie Herman, who is Lorber’s business partner and Douglas Elliman’s CEO, invited Calk on her weekly New York radio show, "Eye on Real Estate."
"Mr. Steve Calk is ‘The Bank’!" Herman told listeners, explaining that his firm’s small size made him more accessible than executives at bigger banks. "If there’s any problem, or there’s something we need to do to make somebody get a loan that we’re not, we can call him up. He’s always available."
Lorber, LeBow and Herman declined to comment about their relationships with Calk.
Thus far, much of the controversy surrounding Manafort’s business ties has focused on his international income, including with politicians and businessmen in Ukraine and Russia.
The Senate Judiciary Committee said Tuesday it has issued a subpoena to compel Manafort to testify about his lobbying activities on behalf of foreign entities, after an agreement about his testimony couldn’t be reached. Separately, Manafort met with investigators from the Senate Intelligence Committee on Tuesday and “answered their questions fully,” Maloni said.
FBI agents have been gathering information about Manafort’s finances as part of a broader money-laundering probe, now wrapped into special counsel Robert Mueller’s investigation, Bloomberg News reported July 20.
President Trump’s recent comments about his overarching ability to pardon have cast the New York investigations in another light: State and local crimes, if found and prosecuted, cannot be pardoned by the president. That would be a matter for the governor.
The New York Attorney General’s Office and the Manhattan district attorney declined to comment on their inquiries. Joshua Stueve, Mueller’s spokesman, declined to comment on that investigation.
The loans from Calk to Manafort are related to a home in the Hamptons and a refurbished Brooklyn brownstone. They came while the onetime campaign strategist’s family was experiencing financial difficulties related to their real estate.
The Manaforts — and the limited liability companies they’ve created — have borrowed against those two New York properties and others they own. In some cases, the loans have come from people or businesses tied to Trump, including Barrack, who was in charge of the president’s inaugural committee. Manafort’s wife also secured a loan from a New Jersey bank whose chairman was Charles Kushner, the father of White House senior adviser Jared Kushner.
The loans from Calk’s Chicago-based bank were extended in December and January, months after Manafort left the Trump campaign in a cloud of questions about his foreign-business connections.
Federal Savings entered into the partnership with Douglas Elliman in 2014, but it turned sour by the end of that year. Lorber terminated the deal in favor of another agreement with the Rhode Island-based Citizens Financial Group.
In response, Calk’s bank filed a lawsuit, which continues, alleging that two employees had undermined it by surreptitiously diverting business toward Citizens.
Citizens Bank, a unit of Citizens Financial, has another thing in common with Federal Savings. It provided mortgages to the Manaforts. In March 2016, Manafort and his wife, Kathleen, obtained loans totaling $3.4 million from Citizens on a Manhattan condominium.
In a 2015 deposition in the lawsuit, Lorber described Calk as difficult to work with and reluctant to take responsibility for his shortcomings. At one point in his deposition, Lorber called Calk’s version of events "completely delusional."
Lorber further stated that the original decision to partner with Calk’s bank was not his but that he was the one who made the decision to terminate it. He is represented in the deposition by Marc Kasowitz, who is also a longtime lawyer for Trump.
Despite that tension, Calk and Lorber ostensibly worked together on the same Trump advisory panel.
Lorber’s loyalty to Trump has remained strong for decades, and their relationship has regularly incorporated LeBow. In addition to the joint trip to Russia, the three men have celebrated birthdays together, and Lorber and LeBow attended an inaugural ball.
LeBow contributed $300,000 to help fund the inaugural festivities, and both he and Lorber contributed to Trump’s campaign. In April, Trump picked Lorber to chair the U.S. Holocaust Memorial Council, which oversees a Washington museum.
Calk’s relationship with Herman remained amicable even after he filed the suit, and she said in a deposition he continued to appear periodically on her radio show. On her personal website, Herman has a picture of herself, Lorber and Trump at a black-tie event, and she has attended real-estate functions with Ivanka Trump and Jared Kushner, her husband. But her political connections are diverse; her website also includes a picture with Hillary Clinton, for whom she once hosted a fundraiser in her house.
Calk was little known in political circles, even in Chicago. He built a mortgage business in Kansas with his brother John by focusing on military veterans. He moved the bank’s headquarters to Chicago in 2014 after being promised millions in grants and tax credits from the city.
According to a 2016 article in the trade publication, National Mortgage News, about 90% of the bank’s lending at the time was directed toward single-family home purchases, most through the Veterans Administration.
After Calk was named to Trump’s advisory council, he attended multiple presidential debates and appeared on television to speak about the candidate’s policy views. It’s unclear how much interaction Calk had with the rest of the council; one prominent member of the team said this month that he’d never heard of Calk, despite serving with him for more than five months.
The first loan from Calk’s bank to Manafort came in December 2016, when a limited liability company connected to Manafort obtained a $9.5 million loan. A month later, the bank provided two more loans, totaling $6.5 million, to Manafort and his wife.
The loans represented about 23.5% of the institution’s total capital. "For a larger, more regional bank, you would not find concentration like that to one borrower, or one industry," said Terry McEvoy, a bank analyst at Stephens Inc.
New York authorities aren’t the only ones looking for Manafort’s loan records. A lawyer representing Calk’s wife in a divorce case that’s more than three years old is seeking all types of financial records from Calk, including "the entire loan file for any and all loans made to Paul Manafort or any agent.”