Dennis Hastert: From House Speaker to alleged sex scandal hush money

Former House Speaker Dennis Hastert (R) of Illinois is under federal indictment for illegal bank withdrawals and lying to the FBI. The allegations, tied to a male former student, now involve sexual abuse.

The arc of Dennis Hastert’s political life was both extraordinary and typical.

As a former high school teacher and coach from Illinois, he seemed to bring solid, Midwestern values to Washington when he was elected to the House of Representatives in 1986, handily winning reelection for ten more terms in Congress before he retired.

Along the way, and as Republicans dealt with disruption and scandal in the House, his party colleagues picked him as Speaker – at least partly, as has been said, because “he didn’t have any skeletons in his closet.”

Now, it’s alleged, there was at least one skeleton in Mr. Hastert’s closet, one connected to his profession after holding elected office: remaining in Washington as a highly-paid lobbyist.

Hastert this week was indicted by federal prosecutors for “structuring” his bank withdrawals to avoid a $10,000 limit (above which banks must report) and for lying about the withdrawals to the FBI.

The seven-page indictment also makes reference to an unnamed person (“Individual A”) to whom Hastert since 2010 had been making large cash payments, apparently in return for that person’s silence for past “misconduct.” By the time of the indictment, Hastert had paid “Individual A” $1.7 million – about half the $3.5 million promised as part of the arrangement.

Within a day, multiple news sources were quoting unnamed law enforcement officials saying that “Individual A” is a male who had known Hastert for many years – back to when the former House Speaker was a high school teacher and wrestling coach. More specifically, the man known as “Individual A” has been identified in the New York Times and elsewhere as a former student from Yorkville, Ill. – the town where Hastert taught and coached – who alleges that Hastert sexually abused him.

The indictment says that Hastert agreed to make the payments “in order to compensate for and conceal his prior misconduct against” the former student.

On Friday, the story seemed to widen with this report in the Los Angeles Times: “A top federal law enforcement official, who would not be identified speaking about the ongoing federal case, said investigators also spoke with a second man who raised similar allegations that corroborated what the former student said. The second person was not being paid by Hastert, the official said.”

At least two potentially important aspects of the story are yet to be revealed: Whether the alleged incidents of sexual abuse can be prosecuted. (Probably not without corroborating evidence.) And whether extortion was involved, in which case “Individual A” may be in legal trouble as well.

What’s clear is that Hastert – like many former lawmakers, he didn’t go back home but stayed in Washington to become a lobbyist – has become a wealthy man in his post-congressional life – enough (according to his indictment) so that he thought he could pay out $3.5 million in $10,000 and $50,000 cash sums without it being noticed.

Although most of his wealth was tied to real estate holdings, he had a steady flow of cash from his lobbying enterprises as well, Politico reports:

“In addition to establishing his own consultancy, Hastert & Associates, Hastert began lobbying on behalf of various major clients for Washington-based lobbying firm Dickstein Shapiro in 2009. His biggest client – tobacco giant Lorillard – alone paid Dickstein Shapiro a total of nearly $8 million from 2011 until the third quarter of 2014, when it terminated its contract…. Hastert’s other major clients were Peabody Energy, Covanta Energy Corp., FirstLine Transportation Security, Inc. and The ServiceMaster Company. He also signed Fuels America earlier this year.”

Before that, the Washington Post reports, Hastert “made a small fortune through real estate investments before leaving Congress.”

“In one controversial trans­action conducted through a trust, Hastert reaped millions of dollars by selling farmland near the site of a proposed highway that was to be financed in part with funds that the then-speaker had earmarked,” the Post reported.

What’s next for Hastert, the longest-serving Republican Speaker?

He quickly resigned from the lobbying businesses with which he was associated as well as his board position at the Chicago Mercantile Exchange. A federal magistrate set preliminary bail at $4,500. He is likely to face formal arraignment next week.