It was a very good week for former House speaker Dennis Hastert. And it was a very bad week.
On Tuesday, federal regulators finally approved a $25bn tobacco merger that Hastert’s lobbying firm had been working on for months.
On Thursday, federal prosecutors unsealed an indictment against Hastert charging that he had paid out $1.7m over four years to cover up “past misconduct” against an unnamed figure from his past. The indictment alludes to Hastert’s background as “a high school teacher and coach”, without specifying why.
The tobacco deal gave Reynolds American (Camel, Pall Mall) ownership of Lorillard Tobacco (Newport, True) and a 34% market share.
The federal banking charges, and a related charge of making false statements to the FBI, could send Hastert to prison.
Hastert’s personal finances have been a subject of controversy since he ended his run as the longest-serving Republican speaker of the House of Representatives in 2007. He was seen as breezing with exceptional speed through the revolving door between Capitol Hill and K Street, snagging a senior adviser job at the lobbying firm Dickstein Shapiro LLP just six months after leaving Congress.
Though he was employed as a lobbyist, the federal government paid Hastert $40,000 a month for years after he left Congress to maintain his offices, as part of a standard package for former House speakers.
In addition to his work as a lobbyist, Hastert accepted speaking and consultancy fees, and took a seat on the board of CME Group Inc, the Chicago-based financial giant whose holdings include the Chicago Board of Trade.
During Hastert’s time at Dickstein Shapiro, the firm’s major clients included the government of Turkey, energy interests, real estate interests and spa services, according to the Center for Responsive Politics.
A top client was Lorillard Tobacco, which paid the lobbyist $2.6m in 2011, $2.35m in 2012 and $2.77m in 2013, according to the center. The money was paid by Lorillard to the Dickstein Shapiro firm, not specifically to Hastert, who was one of multiple lobbyists working on the account.
The federal indictment contends that Hastert withdrew and caused the withdrawal of “$952,000 in United States currency in amounts under $10,000 in separate transactions on at least 106 occasions”. The indictment says that at one point, Hastert was handing the unnamed figure from his past $100,000 in cash every three months “at pre-arranged meeting places and times”.
Reports that Reynolds was in talks to buy Lorillard emerged one year ago, but the deal, which will create a $55bn company, came under intense scrutiny from regulators. To preserve competition in the tobacco industry, regulators are requiring the new company to spin off its Kool, Salem, Winston, Maverick and Blu e-cigarette brands.
