Mayor Rahm Emanuel and a confidant played key roles in throwing a taxpayer funded financial lifeline to a Chicago banker now enmeshed in the ongoing criminal trial of onetime Trump campaign chief Paul Manafort.

City Plan Commission Chair Martin Cabrera Jr. helped broker a deal in 2012 that funneled $3.6 million in city job training grants — the largest ever grant of its type — to The Federal Savings Bank run by CEO Stephen Calk. Less than a year after Cabrera introduced Calk to the Mayor, the bank began extending Cabrera more than $700,000 in loans.

That sequence of events bears similarities to activities of Calk and his bank that are now a key element of the Manafort trial, which began this week in a Virginia federal court.

Manafort, a central figure in special counsel Robert Mueller’s probe of Russian interference in the 2016 elections, is accused of defrauding the IRS and several banks, including Calk’s which extended $16 million in loans to Manafort despite concerns from bank staff, court records show.

Leveraging ties to Manafort, Calk landed a slot on a Trump campaign economics advisory committee and after the election sought a top position in Trump’s administration, according to prosecutors. Published reports have identified the post, which Calk ultimately did not get, as Army Secretary.

The Chicago grant money plays no role in the Manafort case, but Calk’s involvement in both illustrates a pattern in which he reaps benefits from political connections while using bank funds to make loans to those who help him. Calk owns 67 percent of his bank’s stock.

The Emanuel Administration subsidies enabled Calk to convert a West Loop mortgage banking operation into the full-service bank it is today. The money, aimed at underwriting the cost of worker training to achieve that, came out to about $8,800 an employee — more than five times the average per worker cost of other such city grants.

The Cabrera connection

Calk’s clout in Chicago began with Cabrera, the owner of a financial services firm which depends on municipal bond underwriting business from the city and other local governments, records show. Before Emanuel, Cabrera forged close ties to powerful City Council Finance Committee Chairman Ed Burke and former Mayor Richard Daley, who installed Cabrera as chairman of the board of the City Colleges of Chicago.

Cabrera also briefly served as chairman of the United Neighborhood Organization after a scandal that led to the departure of its previous leader and threatened millions of dollars in state construction grants for the politically connected charter school operator.

In early 2012, Emanuel named Cabrera to chair the Plan Commission, a panel with the power to approve most new major real estate projects in the city but no role in city job training grants.

In June of that year, Calk appeared at a press conference flanked by Emanuel and Cabrera and announced that Chicago had won a nationwide competition to land his bank’s new National Home Loan Center and the 400 jobs that would come with it, according to a video of the event and press releases.

Emanuel, who keeps a running tally of corporate relocations to the city, then hailed it as a business and jobs coup that represented the “fourth (corporate) headquarters we have announced” since he became mayor a year earlier. Two years later, in announcing another wrinkle in the bank’s Chicago operations, his administration declared it “the 27th corporate headquarters that has moved to the City of Chicago since Mayor Emanuel took office.”

In reality, many of the bank’s jobs described as new were simply given to employees repurposed from Calk’s former mortgage banking operation, Chicago Bancorp, located at the same 300 N. Elizabeth Street address now home to The Federal Savings Bank, according to state records and a civil lawsuit.

Seven months after the city jobs announcement Cabrera helped engineer, he and his fiancee used Calk’s bank to finance their $795,000 purchase of a home in west suburban Riverside,according to county land records. The value of that January 2013 mortgage loan came to $596,000, records show, and was followed the next year by an additional $110,000 line of credit extended to the couple by The Federal Savings Bank.

Cabrera told the Better Government Association in an email response that he approached Calk for a loan and that the mortgage was “at or above market rate.” He bristled at a question about whether it was tied to his help in obtaining the city grant for Calk’s bank.

“This question is offensive in nature,” Cabrera said. “Our application for a home loan was approved based on our finances…This wasn’t about anything other than helping a company bring more jobs to Chicago. Plain and simple.”

Cabrera also owns a separate home in Chicago’s Pilsen neighborhood which he claims as his primary residence. 

Calk did not respond to detailed questions about his relationship with Cabrera and the city. The bank itself issued a two-sentence statement saying it “adhered to all rules and regulations in the (city grant) application process” and “met all requirements to be reimbursed for any training costs received under the terms of the grant.”

Emanuel aides deferred all questions about the city grant to the city’s planning department, where spokesman Peter Strazzabosco said the money “helped more than 400 workers improve and acquire a variety of skills.” Strazzabosco did not respond to a question about potential conflicts with the loans to Cabrera, saying it should be posed to the City Board of Ethics.

City funding

Cabrera has since refinanced the mortgage with another lender and repaid the line of credit, county records show. But during the time he was in debt to Calk’s bank, Cabrera helped Calk arrange a second press conference with Emanuel in February 2014.

At that event, Emanuel declared that the bank had decided to move its headquarters to Chicago from the suburbs of Kansas City and planned to hire even more workers.

The bank now known as The Federal Savings Bank was a financially troubled lender called Generations Bank, based in Overland Park, Kansas, when Calk and his brother, John, purchased it in 2011.

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The Federal Savings Bank’s headquarters in Chicago. (Scott Olsen/Getty Images)

At the time, Chicago Bancorp, the Calks’ primary business, was writing more than $1 billion a year in mortgages. Replacing it with a federally chartered bank by taking over the Kansas lender enabled the Calks to operate nationwide without having to comply with burdensome state-by-state licensing requirements for mortgage bankers.

Unlike regular banks, mortgage banks don’t take deposits, so such institutions have to borrow money before lending it out themselves. The purchase of Generations altered that dynamic.

The Calks renamed the bank and centered its operations in Chicago, where the bulk of their business already was located.

Cabrera told the BGA he had “no role” in Calk receiving the city grant other than making introductions, a statement contradicted by a trail of emails he exchanged with city officials.

The deal developed rapidly in 2012, beginning with a February 6 meeting arranged by Cabrera between Calk, Emanuel and then deputy Mayor Mark Angelson, according to Cabrera and the mayor’s office.

Cabrera said he knew Calk through an executive networking organization and jumped at the chance to help when the banker said he was hoping to expand his business in the city.

“I wasted no time in reaching out to Mayor Emanuel and his staff,” Cabrera told the BGA.

Two weeks after that first meeting, Emanuel followed up, emails obtained under the state Freedom of Information Act show. “Any updates on your convos with stephen calk? Mayor is asking,” read an email from an Emanuel aide to Angelson.

More email traffic about Calk ensued over the next several weeks between mayoral staff and Cabrera, who at one point stressed the urgency of cutting a deal so the banker wouldn’t expand elsewhere. “Maybe we can make an offer that he can move on quickly,” Cabrera said in an email to Angelson.

By April, the city made a preliminary offer of $4 million in job training funds — $10,000 per employee for up to 400 workers, according to a letter sent from the city to Calk. The actual cost came in somewhat lower.

Calk quickly accepted, and the deal was announced at that June press conference in which Emanuel publicly thanked Cabrera for bringing Calk to the city’s attention.

Federal and state records indicate that 150 of the 407 employees trained with city money were not new hires. Calk dissolved his mortgage banking firm, technically fired the workers and then rehired them in the same location for his revamped bank, records show.

Chicago taxpayers then paid to teach the former mortgage banking workers, as well as new employees, rules and regulations governing federally chartered banking, records show. Some city money also subsidized instruction in basic office computer skills, including the use of Microsoft Word, Outlook and Excel, city records show.

The source of city funding for Calk’s bank was a workforce-assistance training program called TIFWorks. It was the largest such grant since the city launched TIFWorks in 2003, according to city officials.

Since then, Chicago has spent $31.5 million overall on the program to help training 19,590 new and existing employees for businesses in the city. The average cost is $1,600 per worker, meaning the city spent five times as much training Calk’s workers than it did on the typical worker trained under the program.

Strazzabosco said training expenses for the bank were reviewed before the TIFWorks grant was approved and found to be “cost-effective.”

Separately, the bank also won state approval for $9.5 million in tax breaks on the promise it would be adding hundreds of new workers. However, it failed to cash in on the incentives and, in March, the state notified the bank it it may no longer qualify because of Calk’s legal troubles tied to Manafort.

Manafort has been charged by Mueller in two criminal cases, with jury selection in the first completed Tuesday.

A prosecutor in that case signalled in a pre-trial hearing that evidence will be presented of a banker — not identified, but clearly Calk — personally approving $16 million in mortgage loans for Manafort despite knowing that the loan application contained fraudulent information.


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A Chicago native, Sandy Bergo began her professional career as a reporter for the Chicago Reporter, worked as a writer and producer for WBBM Radio, and for 20 years, was a producer with Pam Zekman’s investigative team at WBBM-TV.

She has shared in local and national awards for her work. Her stories have exposed bad doctors, campaign finance irregularities and government waste of taxpayers’ money.

In 2001, Sandy moved with her husband, Chuck Neubauer, to Washington D.C., where she worked as a freelance reporter, television producer and a staff writer for the Center for Public Integrity.

For 10 years until 2019, she was the executive director of The Fund for Investigative Journalism.

During that time, she collaborated with her husband on investigative stories for the Better Government Association.

Sandy and Chuck have one son and two grandsons.

Chuck Neubauer is an award-winning investigative reporter who has a five-decade track record of breaking high-impact stories about public officials, from Chicago City Council members to powerful members of Congress.

He is currently based in Washington, D.C. after years of working in Chicago as an investigative reporter for the Chicago Sun-Times and earlier for the Chicago Tribune where he shared in a Pulitzer Prize with the late George Bliss for a series on abuses in federal housing programs.

He and his wife, Sandy Bergo, have spent the last 10 years doing freelance investigative stories as special contributors for the Illinois Answers Project and the Better Government Association. Their reporting has looked into the actions of politicians ranging from Ald. Edward M. Burke to former House Speaker Michael J. Madigan to former Rep. Bobby Rush to Gov. J.B. Pritzker. They have also reported on how leaders of the Illinois legislature skirted campaign finance limits and also on the generous pensions some Illinois lawmakers receive.

At the Sun-Times, Neubauer, along with Mark Brown and Michael Briggs, reported in the 1990s that powerful House Ways and Means Committee Chairman Dan Rostenkowski misused hundreds of thousands of dollars in federal taxpayer funds to purchase three personal cars, buy expensive gifts for friends and hire staffers who did personal work for him. Those disclosures were the basis for several counts in the federal indictment against Rostenkowski who pleaded guilty and served 17 months in prison.

Neubauer’s reporting also helped lead to federal criminal charges and convictions of former Illinois Governor Dan Walker, Illinois Attorney General William J. Scott and former Illinois State Treasurer Jerry Cosentino.

In 2001, he moved to Washington, D.C., where he worked for the Los Angeles Times and later the Washington Times, exposing conflicts of interests involving Senate and House leaders.

Neubauer began his career as the BGA’s first intern in 1971 before becoming a reporter.