Special counsel Robert Mueller’s prosecutors rested their case against Paul Manafort on Monday afternoon after calling more than two dozen witnesses in their tax- and bank-fraud case against the former Trump campaign chairman.
The final round of testimony from Treasury Department senior special agent Paula Liss lasted only five questions. It essentially boiled down to Liss stating that she had not found any evidence that Manafort’s international political consulting firms had filed reports with the U.S. government acknowledging they had foreign bank accounts.
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Failing to file those bank account reports are one prong of Mueller’s case against Manafort, which is set to shift to the defense on Tuesday morning when the trial resumes in federal court in Alexandria, Virginia.
Mueller’s team brought the charges against Manafort as part of its wideranging investigation into Russian interference in the 2016 election.
U.S. District Court Judge T.S. Ellis III also ejected the public from the courtroom late Monday after Mueller’s team signaled they were finished and convened a closed-door hearing on an undisclosed, sealed motion by Manafort’s lawyers. Ellis, who has quarreled with the prosecution throughout the proceedings, said the substance of the request would become public once the trial is over.
Liss, a certified fraud examiner and money laundering specialist with the Financial Crimes Enforcement Network, had actually testified during the trial’s first week that neither Manafort nor his wife, Kathleen, had filed the foreign bank accounts.
Bringing Liss back for more testimony didn’t happen without some dispute.
Prosecutors wanted to recall Liss to have her answer a short set of questions about what she found when researching the foreign bank account filings from Manafort’s two latest consulting firms: Davis Manafort Partners and Davis Manafort International LLC.
They argued the questions had relevance because they would help show Manafort had knowledge of his requirements to file the reports and willfully ignored it.
“The jury should know the corporations didn’t file,” argued Mueller prosecutor Uzo Asonye.
Defense attorneys countered that Manafort himself never had more than 50 percent ownership in the firms at the time of the alleged crimes and so the burden didn’t fall on him to notify the government. They also said they had no plans to raise the topic as they presented their defense.
Ellis ultimately allowed Liss’ testimony, but he first instructed the jury to keep in mind that only Manafort personally was charged for not filing the foreign bank account report and that they could not convict him for crimes that were not in the government’s indictment.
Trump-aligned bank CEO intervened for Manafort, witness said
A Chicago bank CEO who was seeking a top job in the Trump administration overrode the objections of the bank’s president in order to green light a $9.5 million loan for Paul Manafort in the midst of the 2016 presidential campaign, a bank executive testified Monday.
The testimony came shortly before prosecutors rested their case Monday afternoon against Manafort after nearly two weeks of witnesses, often presented at a breakneck speed that Ellis encouraged.
The CEO of the Chicago-based Federal Savings Bank, Stephen Calk, interceded after the president of the bank, Javier Ubarri, decided it was too risky to allow Manafort to draw the $9.5 million in funds out of equity in his Bridgehampton, N.Y. home, bank vice president James Brennan said.
Prosecutor Greg Andres asked Brennan why the bank went through with the loan if its president was opposed to its issuance.
“It closed because Mr. Calk wanted it to close,” said Brennan, who testified pursuant to a grant of immunity from prosecution over his involvement.
Jurors heard from another bank employee last week that as Manafort was applying for the loan, Calk considered himself to be in the running for a Cabinet post, like secretary of Treasury or of housing and urban development.
New evidence admitted in the case Monday showed that Manafort’s lobbying to get Calk a top administration post extended to a member of the incoming first family. Calk was one of three people Manafort recommended to Donald Trump’s son-in-law Jared Kushner, according to a November 30, 2016 email prosecutors submitted.
Manafort said in the message that Calk was among those who deserved “major appointments.”
“His background is strong in defense issues, management and finance. His preference is Secretary of the Army,” Manafort wrote to Kushner. The former Trump campaign chairman said that if Army secretary wasn’t available, Calk should be considered for Undersecretary of the Treasury for Domestic Finance, Undersecretary of the Treasury for International Affairs or Deputy Secretary of Commerce.
“On it!” Kushner replied.
The list of potential jobs for which Manafort was recommending Calk was somewhat less ambitious than what Calk proposed for himself a couple of weeks earlier in an email to Manafort also introduced Monday at the trial.
A list of “perspective rolls” (sic) Calk sent to Manafort a week after Trump’s election listed the Army job first, followed by deputy treasury secretary, secretary of commerce and secretary of housing and urban development. Calk also proposed himself for first-tier ambassadorships like United Kingdom, France, Germany or Italy.
An accompanying memo from Calk stresses his personal commitment to Trump.
“Mr. Calk willingly risked his national professional and personal reputation as an active, vocal, early supporter of President-Elect Trump,” Calk wrote. “His willingness to serve as an Senior Economic Advisor and Super Surrogate displayed great loyalty courage and conviction when few others would…Mr. Calk never wavered in his support of the President-Elect throughout the campaign.
Calk went on to pledge “undying loyalty” to Trump and the secretary of defense, if granted the civilian post overseeing the Army. He ultimately did not receive any administration job, although Manafort apparently arranged inauguration tickets for Calk and about 10 family member and friends.
The main witness Monday, Brennan, said underwriters at bank Calk headed had concerns about Manafort’s lack of income stream and his debts, including other outstanding loans and an overdue bill for $210,000 in Yankees season tickets.
“Mr. Manafort had no revenue— just $638,000 in expenses” in 2016 before he applied for the $9.5 million loan, the bank executive said.
Manafort claimed he had $2.4 million in income due in from a client, but the bank couldn’t verify that.
“We were not in possession of any back-up,” said Brennan, who also called Manafort’s failure to disclose loans from other banks a “definite red flag.”
Brennan testified that he graded Manafort’s loan application as just high enough to merit consideration, even though he personally recommended the loan not be approved.
Asked why he graded the loan at a higher level than he believed to be accurate, he pointed to Calk’s wishes and said, “Because the loan was going through.”
Brennan described the two loans Manafort sought — one for $9.5 million and one for $6.5 million — as the two largest the bank had made at the time.
Asked by Andres whether the bank made money on the loans, Brennan said the bank had actually lost nearly $12 million.
Manafort’s attorney asked if the bank had attempted to recoup some losses by seizing collateral from Manafort, suggesting that the longtime lobbyist’s indictment in late 2017 May may have “constrained” the bank’s ability to access his assets. Brennan said he was unaware whether such efforts had been made.
Calk, the CEO, hasn’t testified in the case. Andres said at a sidebar bench conference last week that the government considers him a co-conspirator in Manafort’s alleged fraud, even though Calk owns about two-thirds of the privately-held bank.
In a motion made orally at the end of the trial day and then submitted in writing shortly before midnight, Manafort’s defense said Calk was so eager to get an administration job that Manafort’s alleged misstatements about his own income and debts were not illegal because they were not relevant to the factors the bank was considering in issuing loans to Manafort.
“The evidence adduced at trial demonstrates that TFSB was aware of the true status of Mr. Manafort’s assets and future income prior to granting the loans, devised a loan structure based upon its understanding of Mr. Manafort’s financial situation, and was inclined to make the loans, in part, due to the bank chairman, CEO, and majority shareholder, Stephen Calk’s, interest in doing business with Mr. Manafort,” the defense team wrote.