A judge has delayed until February a criminal trial for a bank founder accused of soliciting a bribe from former Trump campaign chairman Paul Manafort, but the impact of the coronavirus pandemic is raising doubts about whether the case can go forward at all.
The trial for Stephen Calk, CEO of the Chicago-based Federal Savings Bank, was set to begin in Manhattan federal court on Dec. 2, but U.S. District Court Judge Lorna Schofield on Thursday agreed to the government’s request to put the trial off until Feb. 8 because of pandemic-related concerns.
While the judge overruled objections from Calk’s lawyers to the delay, she signaled that she wouldn’t just keep pushing back the trial despite complications related to Covid-19 quarantine policies.
“I do not think this is something we can keep doing indefinitely,” Schofield said during a brief telephone hearing on Thursday. “I have some sympathy to the defense arguments that the case and Mr. Calk himself need some resolution here.”
Calk was indicted in May 2019 on a charge of soliciting a bribe while working as an official of a federally insured bank. Prosecutors say the bank CEO helped approve $16 million in loans for Manafort in exchange for a position on a Trump campaign advisory board and as part of an unsuccessful effort to win a job in the Trump administration.
Emails indicate Manafort discussed a possible Cabinet post with Calk and eventually recommended to Trump’s son-in-law Jared Kushner that Calk be considered for secretary of the Army. He was never nominated or named to any administration post.
Four key prosecution witnesses in the Calk case are based in the Chicago area. Under current New York state policies, they’d be forced to quarantine for two weeks if they traveled to Manhattan to testify in person. If Covid-19 infections decline in Illinois, the quarantine might not be necessary, but at the moment infections are on the rise and the state is urging families to limit the size of gatherings for the upcoming holidays.
Federal officials might have authority to move the witnesses in and out of state despite the rules, but there’s been no indication prosecutors plan to do that. Instead, they’ve proposed taking the testimony by video. But Calk’s defense hasn’t consented to that for the key witnesses and probably can’t be forced to do so since the Constitution guarantees a defendant the right to confront accusers.
At some point, prosecutors may have to proceed without some witnesses or drop the case, but for now prosecutor Douglas Zolkind asked only for what he called a “modest adjournment” of the trial. He said the prosecution wasn’t seeking to move forward with video testimony over the defendant’s objection “at this point.”
Defense attorney Paul Schoeman said he was doubtful the situation would be any better by February.
“Mr. Calk and the defense do not have any desire to put anyone in harm’s way,” Schoeman told the judge. “The truth of the matter is we don’t know when conditions will improve. They may get worse before they get better.”
Zolkind said that even with the current quarantine regime, a February trial might be more feasible because it would be less likely to disrupt travel and family gatherings in November and December.
Calk also chimed in briefly during the call, emphasizing his eagerness to have a trial get underway. “I want to do everything I can to clear my name as soon as possible,” he said.
During the brief hearing, no one on Thursday directly discussed the possibility of dropping the case, but a letter prosecutors sent to the court on Wednesday predicted serious complications if the interstate quarantine situation remains as it currently is. A lawyer for some of the witnesses is saying they would refuse to voluntarily submit to the two-week quarantine.
Prosecutors called the court’s ability to force people to do so, “at best, an untested legal question.” Dropping the witnesses “would have a severely damaging impact on the trial and would undermine the interests of justice,” the prosecutors wrote. In a footnote, they said extensive work the courts have done to prepare for trials amid the pandemic “cannot make an in-person trial feasible in every case.”
Schoeman said Calk’s side wasn’t ruling out allowing video testimony for some witnesses, like people certifying documents, but wanted to be able to conduct live cross-examination of the key witnesses. Some of them have made statements undercutting aspects of the government’s case, he said, detailing some of those during the phone hearing on Thursday.
The defense attorney previewed the defense’s strategy if the case does go to trial, suggesting that the loans to Manafort were approved for legitimate reasons and that Calk’s efforts to get a Trump administration job were noble.
“We firmly believe that a trial in this case will show that he is innocent of this charge. … This case is based on a very aggressive application of the bank bribery statute,” Schoeman said. “All because [Calk] volunteered to do public service.”
Schoeman noted that while Manafort was charged with a slew of federal crimes, he was never accused of trying to bribe Calk or the bank. At a trial in Virginia federal court in 2018, prosecutors accused Manafort of bank fraud in connection with the Federal Savings Bank loans. A jury convicted Manafort on eight counts, but was not able to reach a verdict on the FSB loans.
The defense lawyer also observed that Manafort went through that trial, was sentenced and has already been released from prison, while Calk still awaits trial over events that occurred four years ago. Calk’s defense has also said he and the bank were victims of Manafort’s fraud.
It is unclear whether Manafort would be a witness for either side, although at the moment it seems unlikely. He’s currently under home confinement after being released early from his seven-and-a-half-year prison sentence due to concerns about the spread of coronavirus behind bars.
Even if Manafort receives a pardon in the coming months from President Donald Trump, he still faces the possibility of a state trial on bank and business fraud charges filed by the Manhattan district attorney last year. A judge threw that case out under a state double-jeopardy law, but an appeals court is considering whether to reinstate the charges.
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