In this July 17, 2016 file photo, then-DonaldTrump Campaign Chairman Paul Manafort talks to reporters on the floor of the Republican National Convention, in Cleveland.
A Chicago savings bank has found itself ensnared in the saga of former Donald Trump campaign manager Paul Manafort, who is under scrutiny for his dealings with a Russian businessman.
The Federal Savings Bank, whose chief executive was an economic adviser to Trump’s presidential campaign, made about $6.5 million in loans in January to Manafort and his wife for a Brooklyn property, documents show.
That came only about a month after Federal Savings lent $9.5 million to Summerbreeze, a limited liability company connected to Manafort, according to 377 Union, a website named for the address of the Manafort property in Brooklyn. The website, run by two New York lawyers, in February detailed financial transactions that Manafort and his family have made. A lawyer for Summerbreeze didn’t respond to requests for comment on the company’s connection to Manafort.
A Brooklyn brownstone, reportedly owned by Donald Trump’s former campaign chairman Paul Manafort stands along a residential street in Carroll Gardens, Brooklyn on March 29, 2017 in New York City. Manafort has recently come under scrutiny for his business dealings and his close ties to Russia.
(Spencer Platt / Getty Images)
The combined $16 million in loans represents a significant piece of business for privately held Federal Savings, whose stated goal is to expand home ownership in America.
Federal Savings had $297 million in assets, mostly loans, at the end of last year. It also had $67 million in equity capital.
Bank regulators frown on "concentration" — when too many loans are made to certain borrowers or to specific industries, such as commercial real estate.
In August, Federal Savings Chief Executive Steve Calk was named one of 13 economic advisers for the Trump campaign, which vowed to end the era of backroom dealings. Manafort left the campaign later that month amid concerns over his role with a pro-Russian political party in Ukraine. His business relationship with Russian billionaire Oleg Deripaska is also receiving scrutiny.
Calk declined to comment this week through a spokeswoman.
"The Federal Savings Bank does not discuss customer personal financial matters, as it is against its fiduciary duty and the law," said Kellie Kennedy, a representative for the bank.
However, Calk told The Wall Street Journal that the loans to Manafort weren’t connected to his role with the Trump campaign and that they were "grossly overcollateralized."
Federal Savings earned $24 million last year. Fewer than 1 percent of its loans are seriously delinquent. That’s a better track record than the typical lender in Illinois.
The Journal, citing property records in Virginia and New York, said the $9.5 million loan was backed by two homes that Manafort and his wife own and $630,000 in a bank account used as collateral.
Website 377 Union is written by Matthew Termine and Julian Russo, who has a law degree from the University of Chicago.
Federal Savings was born out of Generations Bank, a Kansas thrift bought by Calk and his brother in 2011. That bank, which had about $40 million in assets, was undercapitalized, facing regulatory restrictions and posting losses for five straight years, according to a 2012 story in ABA Banking Journal, an American Bankers Association publication.
Now headquartered on Chicago’s Near West Side, successor institution Federal Savings in 2012 said it was getting $18 million in tax breaks over 10 years from the state through the Economic Development for a Growing Economy, or EDGE, program as well as up to $4 million in training funds from the city of Chicago. The bank had 876 full-time workers as of the end of the year.
Calk has said that about 10 percent of the bank’s employees are veterans like himself.