Few Have the Ability

Former House of Representatives Speaker Dennis Hastert has pleaded guilty to “structuring” cash withdrawals from his bank account to avoid reporting requirements. He is also charged with lying to the FBI when interviewed about those activities. It appears that as part of a plea bargain, the government will dismiss the latter charge.

Some have opined that this is a “political” prosecution. I put that aside, though on some level, nearly all federal prosecutions beyond those based on common law crimes are political. Many are interested in the underlying reasons that got Hastert in trouble. Those focus on the possibility that he was trying to cover-up long ago misconduct that can no longer be prosecuted because limitations have run. Maybe, but that is not my current point.

Congress enacted the currency reporting laws ostensibly to make money laundering of the cash proceeds of organized crime, particularly those concerning illegal drug transactions, more difficult. After 9/11 the purpose was expanded to keep track of cash transfers that might be financing terrorist activities. Banks, casinos, and other financial institutions are required to report the identity of persons making certain cash deposits or withdrawals. Ten thousand dollars is the amount that triggers the report requirement. The law further criminalizes the “structuring” of transactions; that is, the breaking down of cash amounts into less than $10,000 in order to avoid the reporting requirement. Hastert was accused of structuring cash withdrawal from a number of his bank accounts in violation of the law. The penalty can be up to five years in prison. Per the reported plea bargain, he will probably receive a relatively light sentence, possibly only probation. He will still be a convicted felon, with the disabilities that status entails.

Those with a libertarian inclination might question why such a law should exist. What business is it of the government what one does with his own money? There was no accusation that Hastert obtained the funds illegally. Since leaving Congress in 2007, he has worked as a lobbyist. Some may find former politicians becoming lobbyists distasteful influence peddling for special interests. But it is not illegal. Hundreds of millions, if not billions, are spent lobbying Congress every year. A former Speaker of the House of Representatives is doubtless a valuable commodity as a lobbyist. Who better knows what buttons to push among members of Congress? Anyway, Hastert was not accused of wrongdoing in this regard, nor was there any hint that his money was ill-gotten.

The background allegations in the indictment were that Hastert was paying “hush money” to an individual to prevent him from disclosing past misconduct or embarrassing personal information. Unless he was paying to cover up a crime for which he could be prosecuted, that also probably was not illegal. If it were, surely it would have been charged in the indictment. Maybe more information will come out when he is sentenced.

The point here is that Hastert acted stupidly when was questioned by the bank as to why he was making large cash withdrawals. He then began structuring by withdrawing amounts smaller than $10,000 to avoid further reports. He could have just as easily continued to make the large withdrawals, and, when questioned by the bank, government agents, or anyone else, simply told them it was none of their business what he was doing with the money. Perhaps he feared offending his questioners.

Hastert further compounded his folly by lying to the FBI agents who questioned him about the transactions. He allegedly told the agents that he kept the money when he was actually paying off the unnamed “Individual A” as stated in the indictment. Under 18 United States Code section 1001, it is a felony to lie to a federal agent who is acting in their official capacity. The breadth of that statute is breathtaking. It is an extraordinary bludgeon for federal prosecutors to get convictions—even if the poor wretch they target has done nothing else wrong. Martha Stewart is the prime example in this regard. Hastert should have known about the statute, and told the agents seeking to interview him that he would not talk to them without first discussing it with his lawyer. And then not at all. No federal agent is entitled any information from any citizen other than, under very limited circumstances, one’s name and address. The only correct response to an agent’s inquiry, is always “you’ll have to talk to my lawyer.” (It would also be OK to tell them to have a nice day.)

It is, of course, necessary to respond to a subpoena to testify before a grand jury. If one receives such a subpoena in a criminal investigation, then a lawyer is probably necessary. What if you’ve not done anything wrong? In the present climate, that is exceptionally difficult to know. Harvey Silverglate, a lawyer who practices mainly in the Northeast, wrote a book in which he estimates that the average citizen unknowingly commits three felonies a day. In view of the myriad of regulatory crimes Congress has created, Silverglate may well be right.

Will Hastert’s plight teach any lessons? One thing it will probably not do, any more than Martha Stewart’s prosecution for making misstatements to the FBI, is teaching folks to keep their mouths shut when federal agents ask questions. That also goes for anyone else who doesn’t need to know your business. If anything can be learned it is this: Everyone has the right to remain silent; few have the ability.

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