Late Thursday evening, BuzzFeed broke the shocking news that federal prosecutors had indicted former Republican Speaker of the House Denny Hastert
on charges that he had attempted to conceal almost $1 million in cash withdrawals from the IRS, then lied about it to the FBI.
What exactly is Hastert accused of, and how did he get caught?
• According to the indictment
, back in 2010, Hastert had agreed to pay $3.5 million to an unnamed "Individual A," in order to "compensate for and conceal" Hastert's unspecified "prior misconduct" against Individual A. In total, Hastert wound up giving $1.7 million to Individual A before the feds nabbed him.
• So how was Hastert nabbed? Originally, he started withdrawing $50,000 in cash at a time from his various bank accounts. Remarkably, despite having held one of the highest political offices in the land, Hastert seemed unaware that banks are obligated to file reports for any cash transactions over $10,000 with a Treasury Department agency called the Financial Crimes Enforcement Network. Hastert's banks did so, and they also questioned him about his withdrawals, which seems to have tipped him off to the reporting requirement.
• Hastert then tried One Weird Trick that has tripped up countless clueless drug dealers and money launderers before him: He started taking out cash in increments under $10,000. While it may be hard for a conservative like Hastert to believe, government investigators are actually a little bit more clever than this, and they're quite capable of detecting a pattern of withdrawals that appear designed to evade reporting requirements. They even have a term for it: structuring. Per the indictment, Hastert withdrew $952,000 in at least 106 separate transactions of under $10,000 each. That's structuring all right, and it's illegal.
• When the FBI came to talk to Hastert, Hastert apparently claimed (in the words of the indictment) that he'd taken out all that money "to store cash because he did not feel safe with the banking system." It's not clear whether federal agents then asked to look under Hastert's mattress at this point, but they wouldn't have found more than a dust ruffle since, per the indictment, he'd given all that money to Individual A. So this is where the "lying to federal investigators" charge comes in.
But what did Hastert allegedly do to Individual A?
So what exactly transpired between Hastert and Individual A that inspired Hastert to fork over all this money? We don't know, but there are some dark hints:
• The very first full paragraph of the indictment mentions that Hastert "was a high school teach and coach in Yorkville, Illinois" from 1965 to 1981. (According to Wikipedia
, he taught history and coached wrestling.)
• The second paragraph specifies that Individual A was a resident of Yorkville and had known Hastert "most of Individual A's life."
As one former federal prosecutor, Jeff Cramer, observed to the AP, "Feds don't put in language like that unless it's relevant." And the indictment alleges that when Hastert and Individual A met in 2010, they discussed "past misconduct" by Hastert against Individual A "that had occurred years earlier."
Another former federal prosecutor, Phil Turner, explained that in most extortion cases, as this one appears to be, prosecutors would typically view the target of the blackmail as the victim. However, he added, "prosecutors have enormous discretion and, in some instance, may see the person doing the extortion as a greater victim." So it's notable that Hastert, the person being extorted, is also the person getting charged here.
What else do we know?
According to unnamed sources cited by BuzzFeed, U.S. Attorney Zachary Fardon had been planning to file a "a much more explicit" charging document, but he withheld further details from the indictment, partly at the request of Hastert's attorneys. It is probably safe to say that most defendants are not accorded such treatment.
There's also the matter of a very bizarre call made to a C-SPAN show last November, when Hastert appeared to discuss the 2014 midterm elections. A caller identifying himself only as Bruce asked, "Remember me from Yorkville?" to which Hastert responded, "Yeah, go ahead." Bruce then laughed and hung up the phone.
What happens next?
A federal judge has set Hastert's bail at $4,500 and released him on his own recognizance. (Presumably he's not regarded as a flight risk.) Unnamed Justice Department officials tell Politico that Hastert, who has remained out of sight, will appear in court next week for his formal arraignment.
Each of the two counts Hastert faces—structuring and lying to the FBI—carries a maximum five-year sentence. If he were convicted and sentenced to a full 10 years, that could very well mean that Hastert, 73, might spend his last years in prison. If he were to accept a plea deal, which is almost certainly his best option at this point, Hastert could receive a reduced sentence.
Finally, and unsurprisingly, Hastert has resigned from the lobbying firm of Dickstein Shapiro, where he'd been taking on new clients as recently as last month. He also quit the board of the Chicago Mercantile Exchange. There is no word yet on what Wheaton College, a small Christian school in suburban Chicago that Hastert graduated from in 1964, plans to do with its J. Dennis Hastert Center for Economics, Government and Public Policy.