May 29, 2015 1:03 p.m. ET
CHICAGO—A federal magistrate set preliminary bail at $4,500 for former House Speaker Dennis Hastert, who was indicted Thursday by a federal grand jury on charges related to bank withdrawals he allegedly used to pay someone to stay quiet about “prior misconduct.”
The bail amount, included in court documents made public Friday, will allow Mr. Hastert to stay out of custody until he is scheduled to appear in court for an arraignment. An arraignment hasn’t yet been scheduled, but will probably take place in the coming days.
Mr. Hastert hasn’t appeared in public or commented on the charges. The case was assigned to U.S. Judge Thomas Durkin.
Mr. Hastert was charged with intentionally withdrawing hundreds of thousands of dollars in cash in increments of less than $10,000 to avoid federal reporting requirements designed to prevent money laundering. The Republican also is charged with lying to the Federal Bureau of Investigation about the withdrawals, telling agents he was taking the money out because he didn’t feel safe using the banking system.
The indictment alleges the money was going to someone identified only as “Individual A,” who had known Mr. Hastert for most of the person’s life. In 2010, Mr. Hastert agreed to pay this person $3.5 million “to compensate for and conceal his prior misconduct against Individual A,” the indictment said.
The seven-page indictment notes that Mr. Hastert was a high-school teacher and coach in Yorkville, Ill., from about 1965 to 1981 before running for public office. The individual he was trying to pay off also was a Yorkville resident and apparently met Mr. Hastert as a child, according to the indictment. Each of the two counts of the indictment carries a maximum penalty of five years in prison and a $250,000 fine.
Mr. Hastert, 73 years old, couldn’t be reached for comment. Messages sent to him, his personal assistant and the law firm where he worked, Dickstein Shapiro LLP, weren’t returned. The firm removed his biography from its website Thursday.
Mr. Hastert was first elected to Congress in 1987 to represent an Illinois district west of Chicago. He became House speaker in January 1999 after the resignation of Newt Gingrich, who stepped down as speaker amid GOP infighting after the party’s unexpected losses at the polls in the previous election following House proceedings to impeach former President Bill Clinton.
He was dubbed the “accidental speaker” when he ascended from chief deputy whip to the chamber’s top role after Mr. Gingrich’s fall. He held the post for eight years, the longest tenure as speaker by a House Republican, and helped pass legislation creating the Homeland Security Department in the wake of the Sept. 11, 2001, terrorist attacks.
Mr. Hastert lost the position after Democrats won control of the House in 2006. He later stepped down as GOP leader and resigned his seat in November 2007.
After Mr. Hastert left office, he became a lobbyist at Dickstein Shapiro. Two years later, he began meeting with the individual listed in the indictment. At some point, they started discussing the “prior misconduct,” according to the indictment, and Mr. Hastert agreed to the payments.
Between 2010 and 2014, Mr. Hastert paid $1.7 million in cash to the individual. For nearly two years, he withdrew money in $50,000 increments and paid it to the person about every six weeks, according to the indictment.
In April 2012, the withdrawals apparently drew the attention of bank officials, who were under increasing pressure to flag suspicious transactions that could be funding illegal activity. Mr. Hastert was questioned, according to the indictment. Three months later, Mr. Hastert began taking money out in increments of less than $10,000. Banks are required to report transactions over that threshold, and it is illegal to structure transactions to avoid crossing it.
Mr. Hastert kept paying the individual, according to the indictment. In 2013, the FBI and Internal Revenue Service noticed the transactions, and agents flagged them as possible structuring.
During an interview with the FBI last December, agents asked Mr. Hastert if he was withdrawing the money because he didn’t feel safe keeping it in a bank. He allegedly said: “Yeah…I kept the cash. That’s what I’m doing.”
As late as December 2014, the FBI was investigating possible reasons for the withdrawals, according to the indictment, including whether Mr. Hastert was a victim of extortion related to his time in government or was using the cash for a “criminal purpose.”
There also was the possibility that he was using the money to cover up past misconduct.
The news came as a surprise on Capitol Hill in Washington, where congressional leaders declined to comment on the allegations.
In Illinois, at the Yorkville Bowl sports center Thursday night, Steve Rissman recalled his days at Yorkville High School. He said he practiced with the wrestling team and remembers that Mr. Hastert would help students with sports and in class.
“He was always very upfront and honorable and honest,” said Mr. Rissman, who graduated in 1976, the same year Mr. Hastert coached the Yorkville Foxes to the state wrestling championship.
Mr. Rissman said he was shocked by the news of Mr. Hastert’s indictment.
“He made Yorkville famous for wrestling,” Mr. Rissman said. “They named a tournament after him.”
Mr. Hastert resigned Thursday from the board of directors of Chicago-based futures exchange operator CME Group Inc.,<span class="article-chiclet hide down" data-channel="/quotes/zigman/107063/composite"> CME -0.19 % effective immediately, said CME spokeswomen, who declined to comment further. Mr. Hastert had served on the board since 2008.
Write to Andrew Grossman at andrew.grossman@wsj.com and Ben Kesling at benjamin.kesling@wsj.com
CHICAGO—A federal magistrate set preliminary bail at $4,500 for former House Speaker Dennis Hastert, who was indicted Thursday by a federal grand jury on charges related to bank withdrawals he allegedly used to pay someone to stay quiet about “prior misconduct.”
The bail amount, included in court documents made public Friday, will allow Mr. Hastert to stay out of custody until he is scheduled to appear in court for an arraignment. An arraignment hasn’t yet been scheduled, but will probably take place in the coming days.
Mr. Hastert hasn’t appeared in public or commented on the charges. The case was assigned to U.S. Judge Thomas Durkin.
Mr. Hastert was charged with intentionally withdrawing hundreds of thousands of dollars in cash in increments of less than $10,000 to avoid federal reporting requirements designed to prevent money laundering. The Republican also is charged with lying to the Federal Bureau of Investigation about the withdrawals, telling agents he was taking the money out because he didn’t feel safe using the banking system.
The indictment alleges the money was going to someone identified only as “Individual A,” who had known Mr. Hastert for most of the person’s life. In 2010, Mr. Hastert agreed to pay this person $3.5 million “to compensate for and conceal his prior misconduct against Individual A,” the indictment said.
The seven-page indictment notes that Mr. Hastert was a high-school teacher and coach in Yorkville, Ill., from about 1965 to 1981 before running for public office. The individual he was trying to pay off also was a Yorkville resident and apparently met Mr. Hastert as a child, according to the indictment. Each of the two counts of the indictment carries a maximum penalty of five years in prison and a $250,000 fine.
Mr. Hastert, 73 years old, couldn’t be reached for comment. Messages sent to him, his personal assistant and the law firm where he worked, Dickstein Shapiro LLP, weren’t returned. The firm removed his biography from its website Thursday.
Mr. Hastert was first elected to Congress in 1987 to represent an Illinois district west of Chicago. He became House speaker in January 1999 after the resignation of Newt Gingrich, who stepped down as speaker amid GOP infighting after the party’s unexpected losses at the polls in the previous election following House proceedings to impeach former President Bill Clinton.
He was dubbed the “accidental speaker” when he ascended from chief deputy whip to the chamber’s top role after Mr. Gingrich’s fall. He held the post for eight years, the longest tenure as speaker by a House Republican, and helped pass legislation creating the Homeland Security Department in the wake of the Sept. 11, 2001, terrorist attacks.
Mr. Hastert lost the position after Democrats won control of the House in 2006. He later stepped down as GOP leader and resigned his seat in November 2007.
After Mr. Hastert left office, he became a lobbyist at Dickstein Shapiro. Two years later, he began meeting with the individual listed in the indictment. At some point, they started discussing the “prior misconduct,” according to the indictment, and Mr. Hastert agreed to the payments.
Between 2010 and 2014, Mr. Hastert paid $1.7 million in cash to the individual. For nearly two years, he withdrew money in $50,000 increments and paid it to the person about every six weeks, according to the indictment.
In April 2012, the withdrawals apparently drew the attention of bank officials, who were under increasing pressure to flag suspicious transactions that could be funding illegal activity. Mr. Hastert was questioned, according to the indictment. Three months later, Mr. Hastert began taking money out in increments of less than $10,000. Banks are required to report transactions over that threshold, and it is illegal to structure transactions to avoid crossing it.
Mr. Hastert kept paying the individual, according to the indictment. In 2013, the FBI and Internal Revenue Service noticed the transactions, and agents flagged them as possible structuring.
During an interview with the FBI last December, agents asked Mr. Hastert if he was withdrawing the money because he didn’t feel safe keeping it in a bank. He allegedly said: “Yeah…I kept the cash. That’s what I’m doing.”
As late as December 2014, the FBI was investigating possible reasons for the withdrawals, according to the indictment, including whether Mr. Hastert was a victim of extortion related to his time in government or was using the cash for a “criminal purpose.”
There also was the possibility that he was using the money to cover up past misconduct.
The news came as a surprise on Capitol Hill in Washington, where congressional leaders declined to comment on the allegations.
In Illinois, at the Yorkville Bowl sports center Thursday night, Steve Rissman recalled his days at Yorkville High School. He said he practiced with the wrestling team and remembers that Mr. Hastert would help students with sports and in class.
“He was always very upfront and honorable and honest,” said Mr. Rissman, who graduated in 1976, the same year Mr. Hastert coached the Yorkville Foxes to the state wrestling championship.
Mr. Rissman said he was shocked by the news of Mr. Hastert’s indictment.
“He made Yorkville famous for wrestling,” Mr. Rissman said. “They named a tournament after him.”
Mr. Hastert resigned Thursday from the board of directors of Chicago-based futures exchange operator CME Group Inc.,<span class="article-chiclet hide down" data-channel="/quotes/zigman/107063/composite"> CME -0.19 % effective immediately, said CME spokeswomen, who declined to comment further. Mr. Hastert had served on the board since 2008.
Write to Andrew Grossman at andrew.grossman@wsj.com and Ben Kesling at benjamin.kesling@wsj.com
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