U.S. Accuses Ex-House Speaker J. Dennis Hastert of Paying to Hide ‘Misconduct’
By MONICA DAVEY
CHICAGO — J. Dennis Hastert, the former speaker of the House of Representatives, has been charged with lying to the F.B.I. and making cash withdrawals from banks in a way that was designed to hide that he was paying $3.5 million to someone for his “misconduct” from years ago, a federal indictment released on Thursday said.
Mr. Hastert, 73, the longest-serving Republican speaker, had worked as a lobbyist since leaving office. The indictment, announced by the United States attorney for the Northern District of Illinois, said Mr. Hastert, who was once a high school teacher and wrestling coach in Yorkville, Ill., had so far paid $1.7 million to the person, who had lived in Yorkville and had known Mr. Hastert for most of his or her life. Mr. Hastert worked in Yorkville from 1965 to 1981.
In 2010, during meetings between Mr. Hastert and the unnamed individual, the two discussed “past misconduct” by Mr. Hastert against the person, according to the indictment.
In those meetings and in later discussions, Mr. Hastert agreed to provide money to the person “in order to compensate for and conceal his prior misconduct,” the indictment said. It said he was structuring the cash withdrawals in increments designed to avoid bank reporting requirements. The indictment does not provide details of the misconduct.
Mr. Hastert could not be reached for comment at his office in Washington.
Each of the two charges carries a penalty of as much as five years in prison and a $250,000 fine, the prosecutor’s office said. Mr. Hastert is to appear at an arraignment at a future date, the prosecutors said.
Kimberly Nerheim, a spokeswoman for the United States attorney’s office, declined to identify the person being paid — who was referred to as Individual A in the indictment — or to comment on whether that individual would face any charges.
Mr. Hastert, first elected to Congress from Illinois in 1986, was suddenly catapulted to speaker in 1999 during a moment of crisis for his party. Newt Gingrich had just stepped down after a contentious election marked by wounds the House Republicans inflicted on themselves during impeachment proceedings against President Bill Clinton.
The Republicans’ first choice to succeed Mr. Gingrich, Robert L. Livingston of Louisiana, gave up the position before he ever assumed it, acknowledging that he had carried on adulterous affairs in the past.
Mr. Hastert, who became a popular and unifying leader, was promoted for the job by Representative Tom DeLay of Texas, then a powerful Republican force in the House, largely because of Mr. Hastert’s reputation as a conciliator. Mr. DeLay recognized that he himself was too polarizing for the job.
In office, Mr. Hastert, who was known as “the coach” for his former occupation and his leadership style, pressed a series of health care initiatives and played a leading role in shaping the congressional response to the Sept. 11 attacks.
In 2006, he faced criticism that he and top aides failed to respond to warnings about the behavior of Representative Mark Foley of Florida, whose sexually explicit electronic messages to former Congressional pages sparked a scandal that contributed to the Republicans’ losing their House majority. Mr. Hastert chose not to seek re-election in 2008.
According to the federal indictment made public on Thursday, Mr. Hastert gave money to the unnamed person for four years, starting in 2010.
At first, Mr. Hastert provided $50,000 in cash from several bank accounts to the person every six weeks, for a total of 15 such exchanges, the indictment said.
Banks are required to report cash withdrawals of more than $10,000, and in April 2012, bank officials questioned Mr. Hastert about sizable withdrawals from his accounts.
That July, Mr. Hastert began making smaller withdrawals, of less than $10,000, and he continued providing them to the person at prearranged meeting places and times, the indictment said.
Later, the arrangements changed so that Mr. Hastert was providing $100,000 every three months, the indictment said.
By 2013, the Federal Bureau of Investigation and the Internal Revenue Service began investigating the withdrawals, focusing, federal authorities said, on whether cash was being taking out in a way that was intended to evade bank reporting requirements.
Last Dec. 8, Mr. Hastert was interviewed by federal agents. He told the agents that he was not paying anyone with the money, but was keeping the withdrawals for himself because he felt unsafe with the banking system.
“Yeah,” Mr. Hastert told the agents, according to the indictment. “I kept the cash. That’s what I’m doing.”
This is not the first time a political figure has attracted attention through banking practices. Eliot Spitzer, then the governor of New York, came to the attention of federal investigators after bank officials noticed that he was moving around thousands of dollars in a manner they thought was intended to conceal the purpose and source of the money. As it turned out, Mr. Spitzer was using the money to pay for prostitutes. He resigned when the payments became public; he was not charged with a crime.
Since leaving office, Mr. Hastert has been a prominent lobbyist in Washington. He is co-leader of the Public Policy & Political Law Practice at the Washington law firm of Dickstein Shapiro, according to the firm’s website.
By Thursday night, Mr. Hastert had resigned from Dickstein Shapiro, an official with the firm said, and his biography had been removed from its website. Mr. Hastert also resigned from the board of the CME Group, the Chicago-based operator of one of the world’s largest futures and derivatives exchanges, a spokeswoman said.
The reaction in Washington was primarily one of astonishment as Republicans tried to absorb the news that Mr. Hastert, elevated in some respects for his upright image, was in such trouble. Allies and former advisers said that they were surprised by the case and that they had no knowledge of the acts described in the indictment. “It has come completely out of left field and is pretty shocking,” said John Feehery, a spokesman for Mr. Hastert in his days as speaker.
In his home state, Republicans seemed stunned by the announcement. Some described Mr. Hastert as a well-liked man whose life story — from small town coach to House speaker — had always been part of his low-key, regular-guy appeal and approachable nature.
“We’re all shocked,” said Pat Brady, the former chairman of the Illinois Republican Party. “It’s been a total shock in the Land of Lincoln. No one had been hearing anything about this. Not a word.”
