Former House Speaker Hastert Indicted for Dodging Banking Law, Lying to FBI

June 4, 2015

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The Armenian Mirror-Spectator

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CHICAGO (Bloomberg) — Former Speaker of the U.S. House of Representatives Dennis Hastert was indicted on charges of evading currency-reporting requirements and lying to the FBI as part of a hush-money scheme.

Hastert, 73, withdrew $952,000 in small increments to avoid a requirement that banks report cash transactions exceeding $10,000, the U.S. Justice Department said Thursday. The withdrawals were part of a plan to give an individual who wasn’t named $3.5 million as a payoff to conceal “prior misconduct,” Chicago U.S. Attorney Zachary Fardon said in a statement.

Hastert, a Republican from Plano, served in the House from 1987 to 2007. He became the chamber’s speaker — second in line of succession to the president — in 1999.

Starting in July 2012, Hastert began structuring withdrawals in increments of less than $10,000 to evade currency transaction reports, prosecutors said. Later, when questioned by the Federal Bureau of Investigation, he told agents he was keeping the cash, they said.

Since 2008, Hastert has been a senior adviser at Dickstein Shapiro LLP in Washington, where he’s a registered lobbyist. (The firm is hired by the government of Turkey in its efforts against the recognition the Armenian Genocide.) He has resigned, said a person familiar with the matter, who asked not to be identified. Hastert didn’t immediately respond to an e-mail seeking comment. Kimberly Nerheim, a spokeswoman for Fardon, said information on the ex-speaker’s lawyer wasn’t immediately available.

Each of the charges against Hastert carry a maximum sentence of five years in prison and a $250,000 fine.

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From 1965 to 1981, Hastert was a high school teacher and coach in Yorkville, Illinois, where a person identified in a grand jury indictment as “Individual A” also lived. That person has known Hastert, who was also a coach, most of his or her life, according to the indictment.

In 2010, Individual A met with Hastert several times and, in at least one of those meetings, discussed the alleged “past misconduct” that had occurred years earlier. Hastert agreed to pay that person $3.5 million “to compensate for and conceal” the misconduct, according to the indictment.

From 2010 to 2014, Hastert withdrew about $1.7 million from various bank accounts, prosecutors said. During the first two years, he took $50,000 from accounts at three separate banks, paying money to the person about every six weeks, according to the indictment.

After being questioned by bank representatives about the withdrawals, Hastert started making them in increments of less than $10,000, turning over the money in $50,000 bundles “at pre-arranged meeting places and times,” according to the indictment.

Changed Pattern

Last year, Hastert and Individual A changed their payment pattern to $100,000 every three months. Hastert continued making the sub-$10,000 withdrawals.

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By that time, the FBI had started an investigation. Hastert is accused of lying about the transactions when questioned by the federal authorities in December.

“Yeah … I kept the cash. That’s what I’m doing,” he said, according to the indictment.

Hastert on Thursday resigned from the board of CME Group Inc., the Chicago-based futures exchange operator, where he had served since 2008, most recently as a member of its compensation committee, spokeswoman Anita Liskey said.

CME paid him $104,917 in cash and $100,102 in stock in 2014, according to company filings.

On his final financial-disclosure form in 2007, Hastert reported having assets, mostly farmland, totaling $3.1 million to $15.3 million. He also reported having a mortgage of $1 million to $5 million against his home and land.

Hastert reported receiving $34,000 in an Illinois state pension. He also would have started getting a congressional pension after retiring.

The former speaker’s clients in the first quarter of 2015 included Fuels America, a coalition backing the federal Renewable Fuels Standard. He registered for a new client, the Secure ID Coalition, last month.

Hastert also has lobbied for the Republic of Turkey, according to public filings. Last year, on Turkey’s behalf, he met with aides to top House Republicans.

Lobbying reports don’t provide enough information to tell how much Hastert is paid by the firm.

Hastert, a state lawmaker first elected to the House in 1987, was the longest serving Republican speaker, serving from January 6, 1999, until January 3, 2007.

While his early congressional career left him largely outside of the public eye, he quietly climbed the political ladder, in part through close allegiances with past Republican leaders including Robert Michel and Tom DeLay.

By the time of the so-called Republican Revolution of 1994 led by then Speaker Newt Gingrich, Hastert was firmly inside the inner circle of the leaders. When Gingrich was forced out after the party’s poor performance in the 1998 elections, Hastert vaulted from chief deputy whip to the top after Bob Livingston, chosen by House Republicans as Gingrich’s successor, resigned from Congress in the face of his own burgeoning scandal.

Hastert’s speakership came to an end in January 2007 after Democrats led by Nancy Pelosi of California were swept into the House majority.

In an interview last year, Hastert likened party leadership, along with its requirement to disappoint people more often than make them happy, to a sailboat. “Eventually, you get enough barnacles, and you sink,” he said.

The case is U.S. v. Hastert, U.S. District Court, Northern District of Illinois (Chicago).

Dennis Hastert

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