From Newsmax

Former U.S. House Speaker Dennis Hastert agreed to pay $3.5 million in hush money to keep a person from the town where he was a longtime high school teacher silent about “prior misconduct” by the Illinois Republican who was once second in line to the U.S. presidency, according to a federal grand jury indictment handed up Thursday. 

The indictment, which doesn’t describe the alleged misconduct by Hastert, charges the 73-year-old with one count of evading bank regulations by withdrawing $952,000 in increments of less than $10,000 to skirt reporting requirements. He is also charged with one count of lying to the FBI about the reason for the unusual withdrawals.

Each count of the indictment carries a maximum penalty of five years in prison and a $250,000 fine.

Hastert did not return email and phone messages from The Associated Press seeking comment on the allegations. Hastert, who had worked as a lobbyist in Washington, D.C., since shortly after he left Congress in 2007, resigned from Dickstein Shapiro LLC, a spokesman for the lobbying and law firm said Thursday.

The indictment alleges Hastert withdrew a total of around $1.7 million in cash from various bank accounts from 2010 to 2014, then provided the money to a person identified in the indictment only as “Individual A.” Hastert allegedly agreed to pay the person $3.5 million, but never apparently paid that full amount.

It notes that Hastert was a high school teacher and coach from 1965 to 1981 in suburban Yorkville, about 50 miles west of Chicago. While the indictment says Individual A has been a resident of Yorkville and has known Hastert most of Individual A’s life, it doesn’t describe their relationship.

The indictment says Hastert agreed to the payments after multiple meetings in 2010. It says that “during at least one of the meetings, Individual A and defendant discussed past misconduct by defendant against Individual A that had occurred years earlier” and Hastert agreed to pay $3.5 million “in order to compensate for and conceal his prior misconduct against Individual A.”

The indictment says that between 2010 and 2012 Hastert made 15 $50,000 withdrawals of cash from bank accounts at Old Second Bank, People’s State Bank and Castle Bank and gave cash to Individual A around every six weeks.

Around April 2012, bank officials began questioning Hastert about the withdrawals, and starting in July of that year, Hastert reduced the amounts he withdrew at a time to less than $10,000 — apparently so they would not run afoul of a regulation designed to stop illicit activity such as money laundering, according to the indictment.

Among the focuses of the FBI investigation was whether Hastert, in the words of the indictment, was “the victim of a criminal extortion related to, among other matters, his prior positions in government.” The court document does not elaborate.

Legal experts said extortion cases can be tricky.

In mulling over whom to charge, prosecutors often must decide who is the greater victim: the person being extorted or the person who’s doing the extorting, said Chicago-based attorney and former federal prosecutor Phil Turner.

Jeff Cramer, a former federal prosecutor and head of the Chicago office of the investigation firm Kroll, said investigators could have concluded Hastert’s alleged misconduct was “more egregious than the extortion.”

Investigators questioned Hastert on Dec. 8, 2014, and he lied about why he had been withdrawing so much money at a time, the indictment alleges. He told investigators he did it because he didn’t trust the banking system, the indictment says.

“Yeah … I kept the cash. That’s what I am doing,” it quotes Hastert as saying.

Hastert, who also maintains a home in the Chicago suburb of Plano several miles northwest of Yorkville, was a little-known lawmaker from suburban Chicago when chosen to succeed conservative Newt Gingrich as speaker. Hastert was picked after favored Louisiana Rep. Bob Livingston resigned following his admission of several sexual affairs.

As speaker, Hastert pushed President George W. Bush’s legislative agenda, helping pass a massive tax cut and expanding Medicare prescription drug benefits.

He retired from Congress in 2007 after eight years as speaker, making him the longest-serving Republican House speaker. He was second in line to the presidency during those years after the vice president.

David Corwin of Yorkville said his son, Scott, wrestled for Hastert in high school, then later became a wrestling coach himself.

“You won’t get anyone to say anything bad about him out here,” said David Corwin. “Everybody loved him. The kids loved him and they still do.”

Illinois has a long history of politicians getting in legal trouble.

Former U.S. Rep. Jesse Jackson Jr. served a year and a half for illegally spending $750,000 in campaign funds on furs, vacations and other luxury items. Two successive governors in the 2000s, Republican George Ryan and Democrat Rod Blagojevich, were convicted on corruption charges.

In the Hastert case, it’s not clear whether the money was paid in relation to his former position in government. Hastert started making the payments to the person in about 2010, according to the indictment.

Reached by telephone after the announcement, former Gov. Ryan described Hastert as an effective legislator.

“I’m just surprised if this is true,” said Ryan, who has lived in Kankakee, Illinois, since his release from prison.

IMAGE: Former Speaker of the House Dennis Hastert. (Chip Somodevilla/Getty Images)

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 Related story:

Feds: Former House Speaker Hastert lied to the FBI

By Zoe Tillman and Katelyn Polantz From The National Law Journal

Hastert, a lobbyist, resigns from Dickstein Shapiro after bank, false-statement charges filed in Chicago.

 

Former Speaker of the House Dennis Hastert, indicted Thursday on federal charges for allegedly lying to the FBI about bank transactions to cover up unspecified “prior misconduct,” has resigned from Dickstein Shapiro.

Hastert, who joined Dickstein in 2008 after he retired from Congress, was charged in the U.S. District Court for the Northern District of Illinois. Prosecutors said Hastert made false statements about withdrawing $1.7 million in alleged hush money.

Hastert has resigned from Dickstein Shapiro, a spokesman for the firm said Thursday evening. Scott Thomas will continue to lead the public policy and political law practice. The firm removed Hastert’s biography page.

According to the indictment, Hastert made payments to “Individual A,” a person who lives in Yorkville, Illinois, whom Hastert had known for “most of Individual A’s life.” Hastert was a high school teacher in Yorkville before he was elected to Congress. Hastert allegedly agreed to pay $3.5 million to Individual A “to compensate for and conceal [Hastert’s] prior misconduct against Individual A.” The “prior misconduct” took place “years earlier,” according to the indictment. The charging documents do not include details on the misconduct.

Between 2010 and 2014, Hastert paid out $1.7 million to Individual A, according to the indictment. When banks raised questions about his cash withdrawals, Hastert allegedly began taking out smaller increments of cash to avoid suspicion. U.S. banks must report currency transactions that exceed $10,000. In 2013, the FBI and the IRS began investigating whether Hastert was structuring his withdrawals to avoid that requirement.

In an interview with FBI agents in December, Hastert, according to the indictment, stated: “Yeah … I kept the cash. That’s what I’m doing.” That, prosecutors allege, was a lie.

Hastert is charged with one count of structuring the withdrawals of $952,000 to avoid federal currency reporting requirements and one count of lying to the FBI. Each count carries a maximum sentence of five years in prison and a fine of $250,000.

Assistant U.S. attorneys Steven Block and Carrie Hamilton are leading the case, according to the U.S. attorney’s office in Chicago. Hamilton was part of the team that prosecuted former Illinois Gov. Rod Blagojevich, now serving a 14-year prison sentence for corruption.

An arraignment date for Hastert has not been scheduled yet.

In recent years, Hastert has headlined the lobbying group at Dickstein Shapiro as a senior adviser and practice co-leader. He recruited to the firm last month Porter Goss, the former CIA director and congressman.

Hastert was among the highest-profile names remaining at Dickstein, a firm that shrunk faster than any other large law firm last year. But even the former speaker had appeared to be winding down his work.

Dickstein, now with 175 lawyers, saw two large groups of lobbyists depart for other firms in recent months. They were a congressional lobbying practice that moved to Greenberg Traurig last year, and a state attorneys general practice that moved to Cozen O’Connor this month.

Hastert’s lobbying group reported only $130,000 in business so far this year, according to congressional disclosures. In foreign lobbying disclosures, the group represented the American Palm Oil Council for $21,000 and the Turkish government for $241,500 in the second half of last year.

“We’re fully committed to that practice,” firm chairman James Kelly said of the lobbying group in an interview earlier on Thursday, before news of Hastert’s indictment broke. “The quality of those people speaks for itself. They’re currently a small part of our business but they’re an integral part of our business.”

“There’s nothing about Hastert that I don’t honest-to-God love and respect,” said a lawyer and former colleague of Hastert’s who was not authorized by his employer to speak on the record. “It’s like when a friend dies.”

For more on this story go to: http://www.nationallawjournal.com/id=1202727752170/Feds-Former-House-Speaker-Hastert-Lied-to-the-FBI#ixzz3bXvkJOjH