- The Washington Times
Monday, August 13, 2018

Prosecutors with special counsel Robert Mueller’s office rested their case Monday afternoon in the trial of former Trump campaign chairman Paul Manafort.

But the strategy of Mr. Manafort’s attorneys, who are scheduled to present their case Tuesday morning, remains unknown. Defense attorneys have not indicated whether they will present any evidence or call any witnesses.

In fact, questions still remain on whether Mr. Manafort will take the stand to counter the government’s accusations that he committed bank and tax fraud. Judge T.S. Ellis III, who is overseeing the Alexandria, Virginia trial, said he intends to ask the defendant that exact question Tuesday.

Before court closed Monday, Mr. Manafort’s attorneys said they would be filing a motion requesting the charges against him be dismissed. They said the motion will claim the prosecution failed to “show the necessary willfulness,” but offered no other insight into the motion’s contents.

Manafort attorney Kevin Downing asked Judge Ellis if he could file his motion Tuesday morning.

Before resting, the prosecution called 27 witnesses over the past 10 days.

The prosecution’s last witness, an executive with the Federal Savings Bank, testified that Mr. Manafort lied about his income and existing loans in his 2016 application for two mortgages totaling $16 million on properties he owned.

James Brennan, the bank’s vice president, said the loans by were approved by the institution’s chairman and CEO Stephen Calk.

The loans had been written off by the end of 2017 and the bank had lost $11.8 million, Mr. Brennan said. But he also noted that the bank has not moved to seize any of the collateral Mr. Manafort had offered to back the loans.

On Friday, another Federal Savings Bank executive, Dennis Raico, testified that Mr. Calk pushed for the loans because he was angling for a Cabinet-level job in the Trump administration, as secretary of either Treasury or Housing and Urban Development.

Mr. Brennan said he faced so much pressure to approve the loans, that he misrepresented his confidence in one of the loans on documents submitted to federal regulators.

“If I had my recommendation … the loan would not have been made,” Mr. Brennan said.

Mr. Brennan said a stable loan would earn a one rating, but that he rated the loan a four, the lowest rating available for a mortgage to still be approved. Even that “four” was over-generous, he said, testifying that he wanted not to rate the loan at all, effectively vetoing it outright.

“It closed because Mr. Clark wanted it to close,” Mr. Brennan said.

Mr. Brennan detailed multiple red flags that popped up on Mr. Manafort’s mortgage application.

For example, Mr. Manafort claimed his salary was more than $4 million, but the bank was unable to verify that amount, Mr. Brennan said. Instead, the bank found Mr. Manafort had no income while having debts that exceeded $630,000.

That should have been enough to disqualify Mr. Manafort for mortgage approval, Mr. Brennan testified.

“It would go to the character of the borrower and raise a red flag,” Mr. Brennan said. “We would turn down the loan. As a lender, you want to know who you’re lending to.”

Mr. Manafort also did not disclose that he had existing mortgages on the properties he sought to borrow against, according to the banking executive. An American Express bill that was more than $300,000 and 90 days past due was also a concern, Mr. Brennan said.

During cross examination, Manafort attorney Richard Westling blamed the bank for the discrepancies on the mortgage applications and appeared to indicate someone other than Mr. Manafort had provided the bank with information.

He asked Mr. Brennan if income statements could be provided by others, including accountants, bookkeepers or business associates. Mr. Brennan conceded it could.

Mr. Westling also attacked the bank’s competence, blaming it for an error he claimed inaccurately inflated Mr. Manafort’s income on the loan application. He also said that bank officials were aware that another Manafort property in New York City was in default.

The attorney also said the bank had imposed strict terms to protect itself from default, raising the possibility that Mr. Manafort did qualify for the mortgages without Mr. Calk’s interference.

Mr. Brennan confirmed that Mr. Manafort was required to put up as collateral two properties with a combined value of $15 million and $625,000 in cash. The loans also had a 7.25 percent interest rate — considered high for that type of mortgage.

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