WASHINGTON — Dennis Hastert, the longest-serving Republican speaker in the history of the U.S. House, was indicted Thursday by a federal grand jury on charges that he violated banking laws in a bid to pay $3.5 million to an unnamed individual to cover up “past misconduct.”
Hastert, who has been a high-paid lobbyist in Washington since his 2007 retirement from Congress, schemed to mask more than $950,000 in withdrawals from various accounts in violation of federal banking laws that require the disclosure of large cash transactions, according to a seven-page indictment delivered by a grand jury in Chicago.
The indictment did not spell out the exact nature of the “prior misconduct” by Hastert. It noted that before entering state and federal politics in 1981, Hastert served for more than a decade as a teacher and wrestling coach at Yorkville High School in Illinois.
In 2010, confronted about the “prior misconduct,” the former speaker agreed to pay $3.5 million to the individual “to compensate for and conceal his prior misconduct against Individual A,” prosecutors alleged.
Over the next five years, Hastert withdrew about $1.7 million in cash from his various bank accounts — at one point in 2014 delivering $100,000 a month to the individual, the indictment alleged.
The individual, whose identity was shielded by prosecutors, has known Hastert most of his or her life, growing up in Yorkville, Ill., which is the town next to Hastert’s hometown of Plano, in the exurbs west of Chicago. Prosecutors said the actions “occurred years earlier” than the 2010 meeting that sparked the payments.
The investigation began in 2013, by the FBI and Internal Revenue Service, which cited “possible structuring of currency transactions to avoid the reporting requirements.”
Neither Hastert nor his legal team responded to requests for comment on the charges.
A spokesman for the lobbying and law firm Dickstein Shapiro, where Hastert worked, said late Thursday that Hastert had resigned.
In addition to the banking charges, Hastert faces a count for making “false, fictitious and fraudulent statements” to federal investigators during an interview in December in which he was questioned about the many cash withdrawals for less than $10,000, just less than the amounts that would have triggered disclosure requirements.
According to the indictment, investigators asked Hastert — a 20-year veteran of Congress whose lobbying clients include major energy and tobacco firms — whether his withdrawals were prompted “because he did not feel safe with the banking system.”
“Yeah … I kept the cash,” the former speaker told the agents, according to the indictment. “That’s what I’m doing.”
Prosecutors alleged that he knew he was withdrawing the money “to compensate Individual A to remain secret so as to cover up his past misconduct.”
Kim Nerheim, spokeswoman for the U.S. attorney’s office for the Northern District of Illinois, which brought the charges, would not comment on whether there was a criminal investigation or charges against the individual who prompted Hastert’s allegedly illegal transactions.
The withdrawals in question began in June 2010, including 15 of $50,000 each, until the spring of 2012, according to the indictment. Officials at the bank asked Hastert about those cash transactions because federal law requires reporting of transactions of $10,000 or more as part of efforts to track money laundering and other criminal behavior. Shortly thereafter, Hastert began making regular withdrawals of less than $10,000, the indictment alleged.
Hastert will be arraigned at a U.S. district court at an unspecified later date, Nerheim said.
