The prosecution is finished and it’s time for Manafort’s defense, although there are some interesting events like the witnesses not called who may reappear in the second Manafort trial. As diverting as Strzok and Omorosa are, the real business of Mueller’s office continues.
Mr Brennan finished his testimony just ahead of the break with revelation about one loan Mr Manafort received to the tune of $5.9m (£4.6m), on a property in Bridgehampton, New York.
The bank vice president said the loan was initially rejected by one bank executive given Mr Manafort's credit score at the time - he had debt to American Express for nearly $300,000 in baseball season tickets for the New York Yankees among other debts.
"It closed because Mr. Calk wanted it to close," Mr Brennan said, referring to Steve Calk, the bank executive who testified last week and the jury heard say had been seeking a political appointment with the Trump administration.
Mr Brennan, still on the stand, confirmed Mr Manafort's loans are still outstanding.
He had put up two properties - $12 million house in the Hamptons, New York, and a $2.7 million condo in Alexandria, Virginia - as collateral but due to the terms of the loan the property did not constitute payment.
Mr Westling pressed Mr Brennan on the fact the banker knew Mr Manafort had no actual income in 2016 due to his voluntary position with the Trump campaign. He also tried to claim Mr Manafort's son-in-law, with whom he was doing real estate business, could have been the one to fill out the loan application though it was signed in Mr Manfort's name.
Mr Brennan said it was possible, but that did not preclude Mr Manafort from disclosing all his loan obligations, even ones not solely held by him as the application clearly stated.
Mr Manafort's attorneys are arguing their client did not lie on loan applications because he was not the one to fill them out and in some instances did not realise he had done anything wrong.
During questioning by defence attorney Richard Westling, Mr Brennan admitted anyone at Mr Manafort's company was eligible to fill out the loan paperwork. However, the matter of how much the company actually made in 2015 remains the issue.
The loan paper work suggested the firm made more than $4m (£3.14m), but several witnesses have testified the revenue generated was more like $400,000 with no expectation to make much more at the time the loan documents were submitted to the bank in 2016.
Jim Brennan, a vice president at Federal Savings Bank, has testified that a statement the bank got from Paul Manafort in August 2016 claiming $4.4 million in income the previous year was “inconsistent” with other records.
Several witnesses have testified that that the firm actually made less than $400,000 in 2015. Ex-Manafort employee Rick Gates testified that he sent the authentic profit-and-loss statement to his boss as a Word document so it could be doctored.
Mr Manafort denies all charges against him.
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While the drama over Gates’s appearance captured a great deal of attention, the absence of other key figures has gone largely undiscussed. This brief list, which is by no means comprehensive, includes several people who are knowledgeable about Manafort’s alleged crimes, according to the testimony of other witnesses, but who are not being called by prosecutors to the stand:
1. Jeffrey Yohai – Manafort’s former son-in-law. Given earlier reporting that he was cooperating with federal investigators, Yohai’s absence from the prosecution’s witness list in Alexandria is one of the towering mysteries in the case. Manafort’s daughter Jessica divorced Yohai last year, but before the marriage broke up, Yohai was Manafort’s real estate partner.
One part of the alleged bank fraud scheme involves Yohai and Manafort seeking loans from the Banc of California to buy or build houses and apartment complexes to rent out in Southern California. A Banc of California employee called to the stand this week testified that Yohai did not bring much to the relationship. Yohai personally offered “very weak financial support,” Gary Seferian testified, and the properties he and Manafort asked the bank to finance were less complete than Yohai had claimed. Prosecutors also had Seferian read from a May 2016 email he’d written indicating that Yohai had “no experience” flipping the sort of expensive Los Angeles homes he and Manafort planned to buy. Unimpressed with Yohai, the bank looked to Manafort’s assets and income as the primary source of repayment for their loans, and prosecutors allege that Manafort had misrepresented those finances.
Jeffrey Yohai, Steve Calk and David Fallarino. (Photos: BFA, Federal Savings Bank, Facebook)
2. Steve Calk — the founder, chairman and CEO of the Federal Savings Bank in Chicago. On Friday, after hours of mysterious delays that scuttled the morning session and kept jurors and spectators in suspense for much of the afternoon, the prosecution called Dennis Raico as its first witness. Raico testified under a grant of immunity about how the bank Calk runs came to give Paul Manafort $16 million of loans — with one of the loans closing shortly after the 2016 presidential election and the other shortly before the 2017 presidential inauguration.
Raico testified that the timing was no coincidence. Calk, he told the court, was angling for a role in the Trump administration, and he took an unusual interest in Manafort’s loan applications, repeatedly meeting privately and socially with Manafort and discussing loan terms with him directly. Raico testified that he had never seen the bank’s CEO previously get involved with an individual loan application. During the summer of 2016, Manafort had already exercised his influence to put Calk on a Trump campaign advisory committee, and Calk indicated to Raico that he wanted to be part of a future Trump administration. A few days after Trump won the election, and shortly before the first loan closed, Calk called Raico and asked him to call Manafort to inquire whether Calk “was up for treasury secretary or HUD?” Raico was uncomfortable with the request and didn’t make the call.
3. David Fallarino — Manafort’s front office banker at Citizens Bank.Jurors heard testimony on Thursday last week from two of Fallarino’s assistants, who were asked to describe a number of emails Fallarino had sent and received, framing the sort of financial information he needed to receive from Manafort. Earlier in the week, jurors had seen evidence of how Manafort took these emails as instructions showing how to effectively falsify his financial documents to win approval of the loan he desired. On Thursday, jurors also heard from an underwriting supervisor at the bank who processed the Manafort loans Fallarino had recommended.
The testimony of Fallarino’s assistants, his underwriting colleague and the raft of emails prosecutors introduced into evidence all make clear that Fallarino was the main point of contact between Manafort and Gates and Citizens Bank, and Fallarino almost certainly has the most information surrounding any misrepresentations. So what explains Fallarino’s absence from the stand? One theory, which I think best fits the facts, is that Fallarino refused to testify without immunity, and the government refused to grant it. That would reflect the prosecutors’ judgment that they could prove the elements of their case against Manafort that relate to Citizens Bank with the testimony of the lower level employees who ultimately appeared without being granted immunity, and that they preferred not to give up the government’s ability to prosecute Fallarino. While Fallarino has not been publicly charged with a crime, it appears that he too may be in substantial legal jeopardy.
It’s not clear whether the defense will seek to call Yohai, Calk or Fallarino to testify on Manafort’s behalf, but the evidence introduced in court thus far makes that possibility appear remote. By not procuring testimony from these potential witnesses, the special counsel’s office appears to have accepted some added difficulties in its prosecution of Manafort in order to protect the Department of Justice’s ability to pursue other ongoing inquiries. It’s a fair bet there’s a lot more to come from this story.
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