OK, I admit I haven’t been following this case very closely.
I read a column about the case in this morning’s Chicago Tribune. According to this article, Hastert paid $3.5 million to hush up the scandal. First, he made fifteen withdrawals of $50,000 each. So, a total of $750,000. He was questioned about these withdrawals in April, 2012.
Apparently he then switched to withdrawals of under $10,000 each (note to non-USAns – cash withdrawals of $10,000 or more must be reported by the bank). (The under $10k wihdrawals are illegal “structuring” as I understand it and – along with his lies to the FBI about the money – a big part of the case against him.) The total of those withdrawals (again according to the Trib) is $952,000.
$750,000 plus $952,000 is $1,702,000. What happened with the rest of the $3.5 million? Did he just promise $3.5 million but only give $1.7 before he was caught? If so, how do they know it was supposed to total $3.5 million?
I’m more interested in how an ex-speaker of the house ends up with $3.5M in disposable cash. He got up to speed on his second career pretty quickly. Or maybe he saved it as a teacher before getting into politics, since they seem to be overpaid according to politicians. I hope wasn’t working as a lawyer, he should have known better if he was.
My guess is he wasn’t finished paying it off, and the other guy was willing to accept a payment plan. (I’d take $10,000 a week as an installment.)
Note, too, no word on the other end - it was difficult to get millions in cash out of the system, even if you have it in the bank. It would be equally hard to put it back into the system, the more traditional money-laundering issue. So it’s also my guess the other guy set off the alarm bells trying to use the cash.
(One of the funny scenes in Breaking Bad is trying to feed millions into the system through their front business, one $40 transaction at a time.)
Allegedly the Treasury has a program that tracks every big bill by serial number, so they can track the strategic use of bills. I bet once they started watching Hasert, they found where his money was being spent and tracked it down.
Not very good at it if he couldn’t make one guy do what he wanted with $3.5M of persuasion. Pretty dumb - why didn’t his firm - or he himself - just hire the guy as a consultant?
Oh well. I suppose the question too, is was it structuring in furtherance of a crime if there is no crime left to charge? Is paying blackmail a crime nowadays? In response to overly aggressive seizures and the resulting bad publicity, the AG said IIRC that they would not be pursuing structuring unless there was criminal activity behind it.
He got the guy to keep quiet with the $3.5M. Until the feds showed up.
Besides for the fact that I don’t think he owned the firm, and even assuming the guy would have been interested in that arrangement, I would think that would kind of defeat the purpose. If some completely unqualified guy shows up for a job paying huge bucks it would get people to wondering why.
In this case, the crime would be the original molestation.
Corruption. He bought land while he was Speaker of the House, then arranged an earmark for a freeway that would have gone close enough to the land to substantially increase its value.
Lobbying, consulting, speaking engagements, and serving on boards of directors in the eight years since he has left office.
"During the 2010 meetings and subsequent discussions,
defendant JOHN DENNIS HASTERT agreed to provide Individual A $3.5
million in order to compensate for and conceal his prior misconduct against
Individual A.
e.
Shortly thereafter, defendant began providing Individual A
cash payments.
f.
From approximately 2010 to 2014, defendant JOHN
DENNIS HASTERT withdrew a total of approximately $1.7 million in cash
from various bank accounts he controlled and provided it to Individual A."
If statute of limitations is expired, and the feds themselves label it “compensation” for misdeeds, I have trouble seeing how this would be a crime on Hasert’s part. It still seems like blackmail to me… and Hasert would be the victim.
Not that I have any sympathy for him, but still…
How could a guy who helped pass the laws not know that $50,000 cash - several times - would ring every alarm bell in the system? Let alone not know about structuring?
I assume in blackmail it depends who made the initial demand/offer?
Most politicians don’t write the laws or even read them. Their 20 something year-old staffers write all the laws. The politicians are just faces for the office and to their constituents. The politicians actually spend most of their time trying to get re-elected.
Alternatively, it could be called “payment of damages for personal injury” caused by Hastert’s molestation of him while a minor.
That’s a perfectly normal transaction; people & companies pay damages every day, most settled privately like this, some awarded in a court lawsuit. It’s quite common (just ask your local Catholic Bishop).
Though the fact that the victim accepted the payments in cash, and probably didn’t report the income or pay income taxes on it makes it less normal.
I wondered that, too. Seems it would be simple enough to set him up as giving decorating advice or a “life coach” or something. Dummy up a contract and pay the guy by check.
Downside for the recipient is that money received that way would be taxable. Seems that could be worked out by increasing the amount paid and the time over which it was to be paid.
The Trib column included this:
"Here the legal background is murky. If you’ve harmed me by committing a tort, we don’t have to hire lawyers to work it out. I can pay you what I owe you in damages, and that’s perfectly legal. What’s more, we can lawfully sign a nondisclosure agreement — something that happens in tort suits all the time.
"So if Hastert really had committed a wrong, the civil part of such an exchange of money for compensation and silence could in principle have been lawful. It need not have been blackmail, legally speaking. On the other hand, if the allegations were false, or if the accuser threatened to go to the police unless he or she was paid, then the whole transaction would’ve been illegal blackmail. From the indictment, we have no way of knowing."
Pedantry: technically only withdrawals (or deposits) of cash (or other items defined as cash) greater than $10,000 require reporting. Transactions of exactly $10,000 do not require the submission of the relevant IRS form. A bank or such can report suspicious activity with $10,000 and under amounts at their discrection. BTW, personal checks are not considered cash. Also, it is the “customer” who must file notice with the IRS although banks have certain reporting requirements as well.
I find that very hard to believe - with over 8 billion $100 bills in circulation you’d need a monstrously huge system to track them all. I doubt whether banks even scan all the serial numbers when cash comes in or goes out. The few times I’ve ever made a big cash withdrawal the cash was just counted out from the drawer by the teller, there seemed to be no way they could record which physical bills I’d received. Or is there some other step in the US?
Currency counting machines can scan serial numbers. It’s possible that the Fed would know the origin/destination banks of every bill that reenters their system. Who knows whether they think it’s worth the bother. If you’re a conspiracy guy, maybe the companies that service the banks’ currency counters extract that info too at a more local level. It’s a pain in the ass, but it’s possible that there’s a database and black money to fund it.
True. But if I were to walk into the bank and withdraw ten, they’d be absolutely wringing their hands about it unless I had a convincing story. Something about “I hired a guy to do my siding and he doesn’t trust checks cause he doesn’t know me that well” might do the trick. If you’re not a business that routinely does cash in big, round numbers AND has a history of doing those transactions over $10 thousand, there’s a very good chance they’ll report it out of the fear of God–ie, the fear of auditors.
What if Hastert had just told the FBI that he was paying hush money to somebody? The original acts were past the statute of limitations, so they couldn’t have busted him for that, and as far as I know it’s not illegal to take out as much cash as you want provided you can explain why you want it. Could the FBI have leaked about his nefarious actions? I mean, I guess if he told them why he really wanted the money then they’d probably keep digging, but they did that anyhow and this is the best they came up with.