Banker asked about U.S. Army post before making Manafort loan: lawmakers

[April 13, 2018]  (Reuters) - Democratic lawmakers on Thursday questioned whether the head of a Chicago bank was seeking a favor from the incoming Trump administration when he inquired about the confirmation process for a top U.S. Army position before extending $16 million in loans to Trump's former campaign chairman.

Lawmakers disclosed the inquiry as part of an ongoing probe into loans from Chicago-based Federal Savings Bank to Paul Manafort in the weeks after Donald Trump's election victory in November 2016. The investigation is being conducted by ranking Democratic members of the U.S. House Oversight and Government Reform Committee and a national security subcommittee.

Public records show Federal Savings made two loans to Manafort in December 2016 and January 2017: a $9.5 million mortgage secured by Manafort's home in the wealthy Hamptons enclave in New York and a $6.5 million loan against a brownstone in Brooklyn.

A string of media reports last year suggested the loans might have been part of a quid pro quo agreement in which Manafort, who was Trump's campaign chairman until August 2016, would make sure Stephen Calk, chief executive of Federal Savings, was named secretary of the Army.

The lawmakers, Elijah Cummings and Stephen Lynch, said the Department of Defense (DOD) reported to them that Calk had called Army administrative personnel in November 2016 "regarding the confirmation process in general."

Federal Savings said in a statement that media reports implying Manafort received the loans in exchange for the promise of a position were not true. The bank said it was cooperating with a federal probe overseen by Special Counsel Robert Mueller into alleged ties between the Trump campaign and Russia.

A spokesman for Manafort, who has been indicted by Mueller for tax evasion, money laundering, and other charges, declined to comment. Manafort has denied any wrongdoing and is preparing for trial.

Former Trump campaign manager Paul Manafort arrives at court for a motion hearing in his indictment by special counsel Robert Mueller at U.S. District Court in Washington, U.S., April 4, 2018. REUTERS/Joshua Roberts

In addition to the phone call, Calk also met with the Army's chief of staff on Nov. 16, 2016, eight days after the election, at a business gathering in Chicago, according to information provided to Cummings and Lynch by the DOD.

In a letter the Democratic lawmakers asked Calk to hand over all communications with Manafort, former Manafort business partner Rick Gates, and others tied to the Trump campaign, as well as any Manafort related loan documents.

"This new information provided by DOD appears to confirm at least part of the underlying allegation, which is that you were actively inquiring with the Pentagon within days of the presidential election," Cummings and Lynch wrote in the letter.

Federal Savings has been under scrutiny by Mueller and the subject of subpoenas from federal prosecutors in New York and the Manhattan District Attorney, according to people familiar with the matter.

(This version of the story corrects end of Manafort's tenure as campaign chair to August 2016 in paragraph 4)

(Reporting by Nathan Layne and Karen Freifeld in Washington; Editing by Richard Chang)

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