2019 Azbee Awards of Excellence

Category

Online > Impact/Investigative > Northeast

Awarded to

Kevin Wack, staff writer; Alan Kline, senior editor

Entry details

Bank CEO's fire-and-rehire maneuver reaps windfall at taxpayer expense

Issue date (if applicable): 7/17/2018
Publication name: American Banker
Publishing company: SourceMedia
Website home page: https://www.americanbanker.com/

Please describe the publication's mission and readership:

American Banker is the essential resource for senior executives in banking and financial services, keeping its users updated on vital developments and focusing sharply on their most important concerns — innovation, transformation, and disruption; technology, regulation, and reform. Financial industry professionals turn to American Banker, every day and throughout the day, to stay maximally informed — drilling down on complex issues, keeping up with breaking news, and downloading research and data. Paid subscribers and registered visitors engage deeply with an authoritative community of analysts, practitioners and innovators through opinion content, research panels, social media, and live events.

Please describe the enterprising work that went into this entry and its significance or impact on readers:

Reporter Kevin Wack followed the tangled web of Stephen Calk, the head of Chicago-based Federal Savings Bank, who got caught up in the criminal case against former top Trump aide Paul Manafort because of loans the bank made to the ex-campaign chairman.

Wack focused on a previously undisclosed part of Calk’s story, however — an apparently legal but questionable maneuver in which the bank collected $3.6 million in Chicago subsidies after Calk fired employees from a sister firm and then rehired them at the bank.

Wack combed through court records and city documents obtained under the Illinois Freedom of Information Act to piece together Calk’s scheme. In it, Calk and his brother took advantage of a program by Chicago Mayor Rahm Emanuel designed to reward firms that hired and trained locals.

Calk struck a deal with the city in 2012 for the bank to open a loan center in Chicago. But instead of hiring new workers, Calk simply fired employees of a sister firm — which worked out of the same building — and rehired the vast majority at Federal Savings. The bank earned roughly $10,000 per employee from the city. As a result, it netted millions even though most employees had simply been transferred from one firm to another while still doing the same jobs in the same place.

The article was widely read and praised by Politico, The Washington Post and local Chicago media as a stellar example of investigative journalism.

Links to entry URLs

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Entry URL(s), if applicable:
https://www.americanbanker.com/news/bank-ceos-fire-and-rehire-maneuver-reaps-windfall-at-taxpayer-expense

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