Former U.S. House Speaker Dennis Hastert agreed to pay $3.5 million in hush money to keep an unidentified person 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 down on Thursday in Chicago.
The indictment, which does not describe the misconduct Hastert was allegedly trying to conceal, charges the 73-year-old with one count of evading bank regulations as he withdrew tens of thousands of dollars at a time to make the payments. He is also charged with one count of lying to the FBI about the reason for the unusual bank withdrawals.
Each count of the indictment carries a maximum penalty of 5 years in prison and a $250,000 fine.
Hastert, who had worked as a lobbyist in Washington, D.C., since shortly after he left Congress in 2007, resigned from the law firm of Dickstein Shapiro LLC, a spokesman for the lobbying group said Thursday.
The firm's website had described Hastert as a “featured attorney” as late as Thursday afternoon, but his contact details appeared to have been removed from the website hours later. Firm spokesman Jason Huntsman did not have further details.
The seven-page indictment alleges that Hastert withdrew a total of around $1.7 million in cash from various bank accounts from 2010 to 2014, and then provided it to the 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 his 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 Individual A $3.5 million “in order to compensate for and conceal his prior misconduct against Individual A,” the indictment says.
The indictment says that between 2010 and 2012 Hastert made fifteen $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 large 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.
Investigators questioned Hastert on Dec. 8, 2014 and he lied about why he had been withdrawing so much money at a time. He told investigators he did it because he didn't trust the banking system, the indictment alleges.
“Yeah … I kept the cash. That's what I am doing,” it quotes Hastert as saying.
Hastert, who also maintains a home in Plano, Illinois, was a little known lawmaker from suburban Chicago when chosen to succeed conservative Newt Gingrich as speaker. Hastert was picked after favored Louisiana Congressman 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. left an Alabama prison for a half-way house in March after serving 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 sweeping corruption charges. Ryan served more than five years in prison and Blagojevich is still serving a 14-year sentence.
In the Hastert case, it is not clear if the money was paid in relation to his former position in government . Hastert started making the payments to the person in about 2010 after he retired from Congress, according to the indictment.
Reached by telephone after the announcement, former governor 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.