Tomorrow morning, former Speaker of the House and Yorkville Illinois homeboy Denny Hastert will be arraigned in Federal Court. Despite the predictable newsdrool over his alleged sexual misdeeds, Hastert will be indicted on two different counts: Smurfing and Liar-Liar-Pants-on-Firing. ‘Smurfing’ is cute banker’s slang for ‘structuring’ — trying to avoid reporting requirements about cash transactions of $10,000 or more. Lying in this case is, well, lying to the Feds about why you’re being sneaky with your own money.
A bit of personal background: my mother’s family was a fixture in the then-tiny town of Yorkville; she and her sisters grew up there; my grandfather was a prosecutor who once worked mob cases in Chicago Federal Courts; I lived in Yorkville for a while and attended Yorkville elementary school just a few years before another Yorkville resident, Denny Hastert, was employed as a coach and teacher at Yorkville High.
Denny was a very successful wrestling coach (Yorkville High: 1965-1981) and a less successful football coach. He also ‘taught’ homeroom.
If rumors of sexual abuse are true, Denny may have been messing with my friends’ brothers or the sons of people we knew. You’d have to know how stereotypically small-townish Yorkville was back then (re-read Sinclair Lewis’s Main Street or imagine Mayberry with corn instead of tobacco) to grasp how residents would have reacted to this betrayal of trust and exhibition of moral turpitude, if they had been able to even entertain the possibility that molestation occurred. Disbelief and denial come immediately to mind. Which is probably why no student reported it (presuming something unsavory or criminal happened). And which may have something to do with Hastert’s conduct in the first place (again, if the rumors are accurate). Yorkville was a town that demanded deep closets; today it would be easier, albeit not necessarily easy, for someone like Hastert to explore healthy adult-adult relationships and perhaps leave his students alone.
Smurfs are cute and winning coaches are revered, particularly in small towns.
But not always.
What I’d like to examine here, though, is not the ‘underlying crime’ that is no longer a crime (because the statute of limitations has run out) that triggered the cash withdrawals that triggered the Federal investigation that triggered the lie. Nor the possible reasons why this isn’t a case of extortion, with the indicted person being Hastert’s accuser rather than Hastert himself, as shame and desire to protect one’s reputation may have been sufficient motivation to participate willingly (and not illegally) in a 'compensatory' pay-off arrangement. Instead, let’s look at the actual charges.
Regulations about banks’ reporting large cash transactions were instituted over 40 years ago, with the purpose of tracking money laundering in order to uncover illegal activities (drugs, smuggling, bribery, gambling etc.) that could lead to prosecuting real criminals. (In 1970, $10,000 — the ‘must report’ threshold — was a large bunch of money; it equates to over $62,000 today, which suggests the need now to tweak the law, but that’s another issue.) Because real criminals are not always stupid, some evaded reporting requirements by dealing in repeated smaller-money transactions (either by themselves, in a series of banks, or with proxies [aka ‘smurfs’]). Consequently, attempting to evade reporting requirements also became a felony.
Fun urban-legendary fact: the term ‘money laundering’ comes from Mafia efforts to skim gas taxes; they collected cash from proprietors of individual gas stations, and the bills literally stank of gas, oil, and grease. Thus the dirty money needed to be laundered. A competing urban legend has to do with protection money from laundromats.
But but but . . . what if the cash one is depositing or withdrawing is not tainted? Where is the crime? We can all think of non-criminal reasons we might not want the Federal Government prying into the way we conduct our personal business. Should it be illegal to circumvent reporting requirements . . . legally? It’s not illegal to withdraw one’s own money, no matter what the amount.
Recently, I talked about this conundrum with a person whose judgment and logic I trust. She gave the example of running a red light at a deserted intersection at 2:00a.m. Although the original purpose of the law is to curtail dangerous driving, you can still be stopped and ticketed even if you were putting no one, including yourself, in danger. So in Hastert’s case, he knew the law (or he should have, or even if he didn’t, ignorance of the law is no defense), and he broke it, whether or not his individual action had no unfortunate consequences. Ergo, the indictment on smurfing is justified.
The following is not a perfect analogy, but it may capture the Catch-22 nature of the smurfing charges against Denny Hastert.
For the sake of argument, let’s say that all stoplighted intersections are equipped with traffic cameras. And that there’s an additional law that says choosing a route that evades these intersections is . . . against the law. And that these regulations were enacted in good faith to provide a tool against car thieves who don’t want their stolen cars to be photographed (plus to gain revenue and to inflate traffic-violation gotcha stats). And let’s say that you’re on the road transacting some legal but potentially embarrassing personal business that you don’t want other people to know about. Thus you take a non-traffic-camera route . . . and are detected, and hauled in for questioning.
“Why were you driving in a way to duck traffic cameras?”
“Um, uh, I was looking at houses for sale. Most of them are not on main roads.”
“At 2 in the morning?”
“Well, hmmm, it’s a good time to assess properties because, like . . . “
‘We have information that you met a person who is not your spouse at Motel 6.”
“Uh, I guess . . . it was a business meeting about flipping houses . . . “
“You’re under arrest.”
Which brings us to the second charge against Denny Hastert: lying to the Feds. Yes, this is a crime, a crime every semi-comatose U.S. citizen knows about thanks to Bill Clinton, Gary Condit, Larry Craig, and many other high-profile political Pinocchios. Let’s be real: it is absolute rock-solid human nature to lie initially about accusations of sexual misconduct. It's not surprising that Hastert lied about why he was (legally) withdrawing cash, given that it was to keep prior sexual misconduct from becoming public. Is it necessary to make, well, a Federal Case out of such an almost genetically programmed lizard-brain response?
Did you have sex with that woman? Who, us?
The charges against Denny Hastert are disturbing from a civil liberty, right-to-privacy, common sense standpoint. But in another way, they may be fulfilling the intent of the laws in question even if they don’t seem to do so at first glance. I suspect that, once banks (one being the bank my great-grandfather founded in Yorkville) alerted the Feds to Hastert’s odd cash habits (at first big whopping withdrawals, then a smurfing series of smaller, under-the-reporting limit withdrawals), mandatory investigation ensued . . . and was continued because (1) Hastert’s post-Congress lobbying career spanned the globe from Singapore to Dubai, and thus it was not unreasonable to look into potentially shady payments or disbursements; or (2) the Feds had prior information about the sexual abuse allegations and were probing extortion charges — or that, knowing those decades-past alleged crimes could not be prosecuted, they wanted to get Denny on something. Kind of like how Al Capone (and other mobsters whom my grandfather prosecuted back in the 1930s) were caught on tax evasion.
I will not regret whatever happens to Denny Hastert. His hypocrisy (anti-LBGT initiatives, impeachment of President Clinton, the Tom Foley episode) makes him wildly unsympathetic, as does the ignominy he’s brought to Yorkville, a little town that means a whole lot to me. And there’s the underlying unprosecutable and unforgivable (alleged) crime of teacher-student abuse. Most or least of all is the sheer dumbassedness of Hastert’s actions: there are so many ways to pay someone hush, or guilt money, the easiest being a simple check, that wouldn’t have set off Federal banking alarms. Perhaps the Kafkaesque smurfing laws are defensible after all, as they may provide some sort of roundabout justice for idiotic sleazeballs who are otherwise untouchable.
Just so you know: maximum penalties for the two charges (as far as I can tell) are, for each, a $250,000 fine and, much more devastatingly for a man in his seventies, five years in jail.
References
Balko, Radley. “The federal ‘structuring’ laws are smurfin’ ridiculous.” The Washington Post Online 24 March 2014. http://www.washingtonpost.com/news/the-watch/wp/2014/03/24/the-federal-structuring-laws-are-smurfin-ridiculous/
Gutierrez, Gabe. “Dennis Hastert Indictment: Big Questions Still Unanswered as Court Date Looms.” NBC News Online 2 June 2015. http://www.nbcnews.com/news/us-news/dennis-hastert-indictment-big-questions-still-unanswered-court-date-looms-n368381
Friedersdorf, Conor. “Why Is It a Crime to Evade Government Scrutiny?” The Atlantic Online 2 June 2015. http://www.theatlantic.com/politics/archive/2015/06/when-evading-government-spying-is-a-crime/394640/
Kaplan, Rebecca. “Former House Seaker Dennis Hastert facing federal charges.” CBS News Online 28 May 2015. http://www.cbsnews.com/news/former-house-speaker-dennis-hastert-facing-federal-charges/
Keneally, Meghan. “What We Know About the Dennis Hastert Scandal.” ABC News Online 1 June 2015. http://abcnews.go.com/Politics/dennis-hastert-scandal/story?id=31443570
Legum, Judd. “Fox News And The Victimization of Dennis Hastert.” Think Progress 1 June 2015. http://thinkprogress.org/justice/2015/06/01/3664545/victimization-dennis-hastert/
Lipton, Eric. “Dennis Hastert Rushed to Make Money as Payouts Grew.” New York Times Online 6 June 2015. http://www.nytimes.com/2015/06/07/us/politics/dennis-hastert-rushed-to-make-money-as-payouts-grew.html?_r=0
Meisner, Jason. “Ex-Speaker Hastert’s arraignment on federal charges postponed.“ Chicago Tribune Online 2 June 2015. http://www.chicagotribune.com/news/local/breaking/ct-arraignment-for-hastert-delayed-until-june-9-20150602-story.html
Mencimer, Stephanie. “Dennis Hastert May Have Chosen the Absolute Worst Way to Buy Someone’s Silence.” Mother Jones 8 June 2015. http://www.motherjones.com/politics/2015/06/dennis-hastert-indictment-payoffs
Raab, Selwyn. "Mafia-Aided Scheme Evades Millions in Gas Taxes." New York Times Online 6 February 1989. http://www.nytimes.com/1989/02/06/nyregion/mafia-aided-scheme-evades-millions-in-gas-taxes.html
Raab, Selwyn. "Mafia-Aided Scheme Evades Millions in Gas Taxes." New York Times Online 6 February 1989. http://www.nytimes.com/1989/02/06/nyregion/mafia-aided-scheme-evades-millions-in-gas-taxes.html
Saletan, William. “Hastert’s Hypocrisy.” Slate 1 June 2015. http://www.slate.com/articles/news_and_politics/politics/2015/06/dennis_hastert_should_be_prosecuted_the_former_house_speaker_impeached_president.html
Smerconish, Michael. “The Pulse: The case against the Hastert Case.” Philly.Com 7 June 2015. http://www.philly.com/philly/columnists/20150607_The_Pulse__The_case_against_the_Hastert_case.html
Stein, Sam. “Congressman Who Knew Of Dennis Hastert Abuse Rumors Urged Restraint During ’06 Scandal.” Huffington Post 3 June 2015. http://www.huffingtonpost.com/2015/06/03/dennis-hastert-abuse_n_7504464.html
Terkel, Amanda, and Sam Stein. “Dennis Hastert Hid His Skeletons as He Helped Push GOP’s Anti-Gay Agenda. Huffington Post 6 June 2015. http://www.huffingtonpost.com/2015/06/06/dennis-hastert-anti-gay-_n_7521394.html
Toobin, Jeffrey. “The Legal Logic of the Case Against Hastert.” The New Yorker Online 2 June 2015. http://www.newyorker.com/news/daily-comment/the-legal-logic-of-the-case-against-hastert
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