Patriot Act That Dennis Hastert Passed Led To His Indictment




The Department of Justice on Thursday announced Hastert's indictment for agreeing to pay $3.5 million in hush money to keep someone quiet about his “prior misconduct.” The indictment accuses Hastert of structuring bank withdrawals to avoid bank reporting requirements, and lying to the FBI about the nature of the withdrawals. It does not reveal the “misconduct” that Hastert was trying to conceal. The recipient of the money was a resident of Yorkville, Illinois, where Hastert taught high school and coached wrestling from 1965 to 1981.

The indictment suggests that law enforcement officials relied on the Patriot Act’s expansion of bank reporting requirements to snare Hastert. As the IRS notes, “the USA PATRIOT Act of 2001 increased the scope” of cash reporting laws “to help trace funds used for terrorism.” The Bank Secrecy Act of 1970, which was amended by the Patriot Act, had already required banks to report suspicious transactions.

The banks that Hastert frequented, the indictment states, were required to “prepare and file with the Financial Crimes Enforcement Network a Currency Transaction Report (Form 104) for any transaction or series of transactions involving currency of more than $10,000.” From 2010 to 2012, Hastert made 15 withdrawals of $50,000 from multiple bank accounts in order to make the hush money payments, according to the indictment. One or more of the banks flagged the transactions as suspicious. In April 2012, “pursuant to bank policy and federal regulations,” bank representatives questioned Hastert about the transactions, according to the indictment.

After that, according to the indictment, Hastert began withdrawing cash in increments smaller than $10,000 to avoid detection. When the FBI questioned Hastert about the purpose of the withdrawals, the indictment alleges, Hastert lied and told them he was keeping the cash for himself.

Peter Djinis, a former senior enforcement attorney in the Department of the Treasury, told The Huffington Post that the Patriot Act may have enabled Hastert's banks to communicate their suspicions with one another.

The Patriot Act immunizes banks from legal liability for sharing information about unusual customer transactions, Djinis noted. Prior to the law, those kinds of communications might have put the banks in legal danger for violating customers' privacy rights.

Now, if a bank sees "something suspicious, they can contact another financial institution and discuss what they saw to get a fuller picture," Djinis said. Since Hastert was using multiple bank accounts, he said, "there may well have been such discussions in Hastert’s case."

If the Patriot Act is ultimately Hastert's undoing, it will not be the first time the law has been used to prosecute a politician’s criminal activity. In 2008, Newsweek reported that the Patriot Act’s expanded banking disclosure requirements put the FBI on the trail of former New York Gov. Elliot Spitzer (D). Investigators identified payments made in connection with Spitzer’s solicitation of prostitutes.

This article has been updated to include Peter Djinis' comments.



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