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How much is a cabinet post worth?

The criminal case shows how tolerant the legal system has become of the type of access marketing and horse trading that politicians often engage in, sometimes in close proximity to receiving large funds to support their campaigns. It’s also a reminder that these practices can still cause serious legal problems if they get into more regulated areas like banking.

Calk faces two criminal charges alleging he loaned Manafort $ 16 million in exchange for the Trump campaign chairman’s efforts to get the bank director a high-profile job in the Trump administration. Calk eventually got an interview with a Trump transition group called “Tiger Team” and was considered as Under Secretary of State for the Army but never got a nomination or a job.

Since the charges are crimes, in order to convict Calk the jury must determine that what he received from Manafort is worth more than $ 1,000. If convicted, Calk faces up to 35 years in prison, but would likely receive a lower sentence under federal guidelines.

According to court records, prosecutors hired an expert to back up their case that the kind of jobs Calk was looking for were of significant value: Jeff McCutcheon, a Florida consultant who specializes in executive compensation.

McCutcheon, who has over 37 years of HR experience, concluded that senior management positions can indeed be financially lucrative, even if many who accept them accept a cut in salaries when they leave the private sector.

“That an appointment to president is valuable beyond immediate salary shouldn’t be questioned,” wrote McCutcheon in an 11-page report prepared for federal prosecutors. “Executives at some of the largest corporations in the United States often hold government positions that require a significant reduction in revenue and often a restructuring of their investments, all for a position with long hours, exceptional public scrutiny and reputational risk, and wages below $ 200,000 a year . “

The prosecutor’s expert said the two main civilian posts that Calk sought were each worth far more than the amount it would take to trigger the bank bribery law.

“Each appointment would be of significant benefit to Mr. Calk and the bank, exponentially worth over $ 1,000,” wrote McCutcheon.

McCutcheon’s report focuses on the campaign post Calk won and the roles in the Army for which he was considered, and does not specifically discuss his desire to run a large federal agency. However, the remuneration expert is discussing cabinet members’ financial prospects and also appears to be mistakenly categorizing the position of Army Secretary as a Cabinet post.

McCutcheon studied the career paths of several new Army secretaries. He noted that Sec. David Fanning converted that position into a $ 1,000,000 per year job as director of the Aerospace Industries Association. Fanning’s predecessor, ex-rep. John McHugh (RN.Y.) joined the K&L Gates law firm after working at the Pentagon. McHugh probably earned more than $ 400,000 in the lobbying position, the expert said.

McCutcheon also concluded that Kalk’s appointment to an economic advisory board for the Trump campaign was worth “well over $ 1,000” because of the social status, connections, and publicity that came with such a service. The expert said the cost that participants in such a panel are willing to pay out of their own pocket shows the value of such an appointment.

When former White House communications director Anthony Scaramucci took the witness stand last week, prosecutors got him to point out that the appointment to the advisory group would expand Calks Cache.

“It’s a prestigious thing,” said Scaramucci.

McCutcheon acknowledged that high-profile U.S. government jobs don’t always help the reputations of those who hold them. “Some officers are disgraced,” he noted.

Prosecutors said their expert McCutcheon had testified in multiple lawsuits on compensation issues, but they did not list previous assignments attempting to determine the value of an alleged bribe.

“For a long-standing executive compensation expert, it is certainly permissible to make qualitative judgments about the value of prestigious positions based on his experience in evaluating candidates and formulating compensation packages,” wrote prosecutors.

Calk’s main defense is that there is no link between the job he was looking for and the loan to Manafort, but his attorneys have also denied whether Manafort’s help was exceptional and whether it has any discernible financial value.

In a judicial file, Calks attorneys dismissed McCutcheon’s methodology, calling it “totally rigorous”.

“McCutcheon’s methods are at best unreliable and mostly completely illusory,” write defense attorneys Paul Schoeman and Darren LaVerne.

However, US District Judge Lorna Schofield ruled in the run-up to the trial that McCutcheon’s advice was admissible. He still has to comment on a process that is expected to take several weeks.

Defense attorneys have also emphasized that the only thing that Calk could think of and the only thing Manafort could offer was “help with applying for the job”, not the job itself.

While the government case is still pending, prosecutors appear to have acknowledged that Kalk’s benefit from Manafort was actually not a job, but helping get one. During the opening arguments in the case, US Attorney General Alexandra Rothman argued that what the bank executive was illegally looking for in exchange for the multi-billion dollar loan was not a job or even an interview, but “favors” from Manafort.

“Stephen Calk was bribed by Paul Manafort. Manafort gave him political favors and Calk gave him bank loans for them – loans for political influence, ”said Rothman.

In recent years, the Supreme Court and other courts have viewed a number of suspected political corruption cases with skepticism, often narrowing the authority that prosecutors have alleged to pursue corrupt deals.

In the so-called Bridgegate case, the judges brought charges against two aides to the government at the time. Chris Christie of New Jersey, a Republican, on deliberately generating traffic growls on a federally funded bridge as a form of political retaliation against an uncooperative mayor. And on the indictment of former Virginia Governor Robert McDonnell, a Republican, the judges said that organizing a meeting or hosting an event is not the kind of official act that a bribery charge could bring.

A federal appeals court also brought several charges against former Democratic Governor of Illinois Rod Blagojevich after concluding that trying to trade a vacancy in the Senate for a cabinet post in the Obama administration was not a crime – despite Blagojevich was looking for the job for himself. The 7th US Court of Appeals said such deals were everyday political “logrolling”.

While these types of judgments seem to undermine the notion that seeking political favors in exchange for a bank loan is a crime, legal experts said the conduct alleged in the Calk indictment is likely still illegal, despite a similar compromise for a campaign donation was received, it would probably not be.

“The Supreme Court has a special standard that distinguishes a campaign fee from a bribe,” said Albert Alschuler, Northwest law professor. The judges see it that way because they see it as “a need to raise money to fund political campaigns,” he said. “This is about stealing from a bank. … So there is no reason to apply this theory. “

Perhaps inadvertently, McCutcheon’s report offers some comparisons that illustrate how the case against Calk contrasts with the lax approach the law often takes to mixing money and action in the political arena. McCutcheon, for example, suggests that many ambassadorial posts be more or less exchanged for campaign contributions.

“Service in a prestigious role is seen as something valuable in and of itself. This is evidenced by large campaign donors who are ambassadors in [a] pleasant environment, ”wrote the compensation expert.

Although such agreements can be illegal, criminal cases about such a trade are almost unknown. (In 1974, Herbert Kalmbach, an attorney for President Richard Nixon, pleaded guilty to accepting a US $ 100,000 campaign fee to have the post of ambassador transferred from one in the Caribbean to somewhere in Europe .)

Manafort, who received a pardon from Trump in December, served approximately two years of a combined seven and a half year prison sentence on various charges related to underpaid taxes, unreported foreign bank accounts, and acting as an unregistered foreign agent. While a jury found him guilty on some counts and Manafort pleaded guilty to others, the jury stood firm on the four cases of bank fraud and conspiracy over Calks Bank’s loans and declined 11: 1 for conviction.

Manafort is not expected to be summoned as a witness in Kalk’s trial, nor has he been charged with bribing Calk to grant the loans. Kalk’s defense has taken up Manafort’s alleged lies about his financial situation to argue that the banker did not try to put bad loans on the bank and was misled about Manafort’s finances.

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