Cases that inspired the book

This really happened: Dennis Hastert, the Speaker of the House of Representatives from 1999 to 2007, and a Representative since 1987, retired from a distinguished and respected career in government. But after retirement, instead of settling into an easy life as an elder statesman, he started working as a lobbyist, putting in grueling hours doing the very thing he and his fellow Tea Party representatives had long derided as corrupt. Why? Surely he didn’t need the money, and wasn’t lobbying a little beneath the dignity of a former Speaker?

Hastert’s indictment and plea agreement in Case No. 15-cr-0315-TMD (N.D. Ill.), available here, https://apps.washingtonpost.com/g/documents/politics/indictment-of-former-house-speaker-dennis-hastert/1565/, and here, https://www.justice.gov/usao-ndil/file/788561/download, tell the story. Turns out Hastert was alleged to have sexually abused multiple boys when he was a high school wrestling coach before he began his political career. One of those boys, now grown up, and identified in the case as Individual A, had contacted Hastert after his retirement and confronted him about the abuse decades earlier. The two of them had worked out a deal: Hastert would pay Individual A $3,500,000, and Individual A wouldn’t go public with the accusations. 

Hastert didn’t have that kind of money, but he really wanted Individual A’s silence, so he started grinding out lobbying hours to raise the cash. Between 2010 and 2014, he paid Individual A $1,700,000. He paid it out in periodic cash installments of $50,000. For the first year or so, he withdrew the full $50,000 from his bank account each time. That was ill-advised. Hastert was a former Speaker of the House; he had to have known that banks have to flag and report to the DOJ all cash transactions of $10,000 or more. It’s not a crime to withdraw $50,000 in cash, but it absolutely guarantees regulatory and law enforcement inquiry into what you’re doing. Maybe he just didn’t think anyone would say anything because he was Dennis Hastert. But his bank did worry, and in April 2012, the bank contacted Hastert about the withdrawals. Hastert said hey, no worries, I just like holding cash, you know. But what he did next was epically, classically dumb—the white-collar criminal’s classic blunder. Immediately after that conversation with his bank about the $50,000 withdrawals, he stopped making $50,000 withdrawals. Instead, he started making withdrawals of just under$10,000—just under the federal reporting trigger. 

You’d be surprised that people still try that, but they do. All the time. Why anyone would think that no one will notice you making a series of $9900 transactions is beyond me. But you see that kind of pattern a lot. And it’s actually worse to do it that way—because making a series of $9,900 withdrawals (especially after having just been flagged for $50,000 withdrawals) will not only guarantee you even more regulatory scrutiny, it’s also a crime, called “structuring.” Structuring means what it sounds like: structuring your transactions so as to avoid the reporting requirement. In other words, while making a $50,000 withdrawal will get you flagged but is not a crime, making five $9900 withdrawals to avoid getting flagged is a crime. And so when Hastert changed his withdrawal patterns and started making lots and lots of withdrawals of just under $10,000 (he did it 106 times from from 2012 to 2014), he earned himself a visit from federal agents, who visited him in December 2014 asked him what was up. According to the indictment, the agents were worried that he was being blackmailed or extorted. So Hastert now found himself facing a second potential crime: lying to federal agents. He didn’t have to talk with them, of course, but like a thousand other perps before him, he appears to have thought he could talk his way out of trouble. No worries, he said, I just like holding cash; I don’t trust the banking system. You’re not giving anyone this money? No, no, I’m keeping it as cash, “in a safe place.” That’s what he actually said. The former Speaker of the House. Come on, man.

No one believed that, and Hastert was charged with “structuring” and false statements. He pled to the structuring count and did 15 months in federal prison. He was never charged with child abuse, though several men spoke at his sentencing about prior abuse, and he admitted prior wrongdoing in general terms. He got out in 2017, but the story wasn’t over: Individual A sued him for breach of contract, demanding the rest of the $3.5 million. As I write this, that case is still pending. It was supposed to go to trial this year, but like every other civil trial in the country, it was put on hold indefinitely by the coronavirus.   

-Indictment: https://apps.washingtonpost.com/g/documents/politics/indictment-of-former-house-speaker-dennis-hastert/1565/

-Plea Agreement: https://www.justice.gov/usao-ndil/file/788561/download

-My written commentary at the time: https://brownwhitelaw.com/the-downfall-of-dennis-hastert-lesson-in-false-statements-and-bank-withdrawal-structuring-not-the-house-freedom-caucus/

-My television commentary at the time: https://www.youtube.com/watch?v=BsIHj-I5FJg

-AP article on the civil case: https://apnews.com/article/902f13a0f799476b96609a86b45b1f18