The Legal Logic of the Case Against Hastert
BY JEFFREY TOOBIN
CREDIT PHOTOGRAPH BY CHIP SOMODEVILLA/GETTY
When I was an Assistant United States Attorney in Brooklyn, in the nineteen-nineties, I prosecuted a case involving twenty-six canisters that were supposed to be filled with bull semen. They were seized at Kennedy Airport, and they were filled not with animal fluid but, rather, $6.4 million in cash. (There were more than twenty thousand twenty-dollar bills alone.) They were picked up shortly before they were to be loaded on a flight to Bogota.
There was no mystery why the cash was hidden in such an ingenious manner. It is lawful to bring cash out of the United States, but if the amount is over a certain threshold—now ten thousand dollars—you must declare it and your identity to United States Customs. The people bringing large amounts of cash to Colombia in 1990 were very often drug dealers and their confederates, who did not want to identify themselves to the authorities. So they resorted to bizarre subterfuges like the bull-semen containers. (That case ended in a guilty plea by the man who brought the containers to the airport.)
The concept behind the outbound-currency law is the same as the law governing cash bank transactions—the one that tripped up Dennis Hastert, the former Speaker of the House of Representatives. Individuals who deposit or withdraw more than ten thousand dollars in cash must disclose their identity to the bank so that the bank can file Currency Transactions Reports (C.T.R.s). And these individuals cannot simply break down large deposits or withdrawals in order to avoid the C.T.R. requirement; that’s called “structuring,” and it’s the core charge against Hastert.
People dealing in large amounts of cash tend to fall, roughly, into two categories. First, there are the operators of legitimate businesses, like fast-food restaurants, who generally have no problem disclosing their identities to the authorities. Second, there are people who are up to no good—dealers in drugs or other illicit goods, money launderers, or tax evaders, for the most part. There’s little controversy that people involved in unlawful activities should be prosecuted if they structure their transactions to avoid the filing of C.T.R.s. The twist in the Hastert case is that he appears to have removed large amounts of cash for a legal, if distasteful, purpose—to pay off a person upon whom, according to the indictment, he had inflicted some unspecified misconduct many years earlier. The indictment identifies the person only as Individual A; according to subsequent press reports, which cite unnamed officials, Individual A is a man and the allegation is that Hastert sexually abused him when he was a high-school student and Hastert was a teacher and wrestling coach. Hastert held that job, in Yorkville, Illinois, from 1965 to 1981, and so it seems likely that the statute of limitations has run out on any crime Hastert committed in his underlying relationship with Individual A. (Many details about the case are unclear at this point; Hastert has not yet responded.) According to the indictment, Hastert agreed to pay Individual A three and a half million dollars, and had already paid him about $1.7 million in installments. To make the payments, Hastert first took out fifty thousand dollars at a time and then, when his bank questioned him, began making many cash withdrawals, from multiple accounts, just under the ten-thousand-dollar mark. To put it another way, if Hastert had paid any or all of the $3.5 million to Individual A by check, instead of cash, there would be no crime.
Why should Hastert be prosecuted just because he paid Individual A in cash? The answer lies in the proper exercise of prosecutorial discretion. Some people are genuinely unaware of the C.T.R. requirement, and their cases might be ripe for an exercise of leniency. But Hastert was not ignorant of the law, as he proved when he allegedly began structuring his withdrawals to get around the requirement. And while the payments to Individual A are probably legal, no prosecutor in the world is going to give the benefit of the doubt to someone who is making a payoff based on an apparent gross abuse of trust by a teacher against a student. It is exactly this kind of underlying fact that would—and should—motivate a prosecutor to proceed in a close case.
And if there were any doubt about the prosecutor’s decision, Hastert’s alleged lies to the F.B.I. would certainly seal the case against him. When confronted with his structured transactions, he told F.B.I. agents two preposterous lies, according to the indictment. First, he said that he was withdrawing the money to keep for his own use, even though he was passing it to Individual A. And second, Hastert said that he removed the cash from the bank because he did not feel safe with the American banking system—which is just absurd, especially for a former Speaker of the House. When questioned, Hastert could have instead explained accurately what he was doing, or he could have declined to talk, or he could have summoned a lawyer. Instead, he did something that often guarantees a criminal charge: lying to agents’ faces.
In short, the prosecution of Hastert shows that the fundamental purposes of the C.T.R. requirement are being served. Law-abiding individuals who work with large amounts of cash accommodate the requirement without any problems. Others who are using cash for suspicious, if not exactly illegal, purposes are legitimate targets for inquiry and, if they’ve deliberately tried to avoid the law’s requirements, for prosecution—especially if they then lie to the FBI about it. The precise contours of Hastert’s relationship with Individual A remain mysterious, but his legal ordeal is easily understood and, it seems, richly deserved.
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Posted but NOT written by Louis Sheehan