Wednesday, June 14, 2006

Speaker Hastert Threatens Watchdog Group With Libel Suit

Reacting to a watchdog group's release questioning certain real estate investments he made near his home in his Illinois district, Speaker Dennis Hastert, writing through his attorney, threatened to sue the Sunlight Foundation if the statement wasn't "immediately withdrawn and corrected." The group charged in a release today that Speaker Hastert had "used an Illinois trust to invest in real estate near the proposed route of the Prairie Parkway, a highway project for which he's secured $207 million in earmarked appropriations." The real estate in question is actually 5.5 miles from the proposed route of the Prairie Parkway according to Hastert's attorney, although a new exit added to the road will provide direct access from the development which will occur on the real estate and the new highway.

Hastert, who has spent most of his adult career as a public servant, does stand to make plenty of money from the real estate deal according to the foundation's report, which is highly critical of the manner in which Hastert disclosed the real estate deal on his 2005 financial disclosure form. Today's report stated:

Hastert's 2005 financial disclosure form, released today, makes no mention of the trust. Hastert lists several real estate transactions in the disclosure, all of which were in fact done by the trust. Kendall County public records show no record of Hastert making the real estate sales he made public today; rather, they were all executed by the trust.

The trust, called the Little Rock Trust #225, transferred 138 acres of farmland in which Hastert had an interest to a company called RALC-Plano LLC on Dec. 7, 2005. Illinois Secretary of State records show that the company is a wholly owned subsidiary of the Robert Arthur Land Company. The company’s Web site lists plans for a Plano development called North County, with lots for 1,635 homes, 33 acres for commercial and retail businesses, and 18 acres set aside for a public school.

The proposed path of the Prairie Parkway is a little more than 5.5 miles to the east of the development; the Kendall County Board has already voted in favor of putting an interchange on Galena Road, giving residents of the new development easy access to the highway.

Hastert has argued that the highway is needed to cope with Kendall County's rapid population growth. In 2002, for example, he said the proposed highway will "address tomorrow's growth-related problems before they occur."

Hastert’s use of the trust obscured his ownership interest in particular parcels of property. For example, Hastert listed, on his 2004 financial disclosure form, that he had acquired a "1/4 share in 69 acres (Plano, Ill.)" on Feb. 17, 2004. However, a search of Kendall County public records for Hastert's name revealed no such purchase. Instead, Little Rock Trust #225 acquired the property, effectively hiding Hastert’s interest in the land.

On May 2, 2005, the Hasterts transferred an additional 69 acres of land--part of the property they bought as a primary residence in 2002--to the trust.
The Sunlight Foundation reports that the two properties in which Hastert owned an interest were sold by the Little Rock Land Trust to RALC-Plano on December 7, 2005, for $4.9 million. The report uncovers the fact that the trust is run by Kendall County's top Republican leader, Dallas Ingemunson. Describing the trust, the foundation reports:

The trust was established on February 9, 2004. Under Illinois law, trusts have no obligation to make public the identity of their beneficiaries. The Little Rock Trust #225 documents do show that the trustee is Dallas C. Ingemunson, who wears multiple hats in Illinois and Kendall County politics. He serves as treasurer of Hastert's federal campaign committee, chairman of the Kendall County Republican Party, and is sometimes described as Hastert's political mentor.

The trust continues to acquire property. On his 2005 financial disclosure form, Hastert lists a purchase of "1/3 share of 125.96 acres (Kendall County, IL)" for between $1,000,001 and $5 million. That land--located at 15715 Miller Road in Plano--was actually acquired by the Little Rock Trust.
The Sunlight Foundation insists that it sought a response from Speaker Hastert to its questions about the transactions in late May. It did not hear from the Speaker through his private attorney until today though after it published its report. In a sharply worded letter from Randy Evans, the Speaker threatened to sue the group with libel for what he describes as "untrue statements" in the report. Evans writes:

The statements in your release below are untrue. Rather than simply disclose participation in a trust (without disclosing what the trust owns), Speaker Hastert disclosed the amount of his interest and the location of the property on the Financial Disclosure for the year in which the closing of the transaction occurred. This is confirmed by the entries on the Financial Disclosure forms themselves confirming the interest (including amount), the property, and the type of transaction (sale, purchase, or exchange). The statements and innuendo in your release are thus false and misleading.

In addition, the property purchased is adjacent to his home and is more than 5.5 miles from the Pairie Parkway Corridor. This would be like complaining about a purchase in Alexandria, Virgina based on rennovations at the Capitol.

Demand is hereby made that the false, libelous and defamatory matter be immediately withdrawn and corrected. The failure to do so will confirm intentional and wilful conduct by you designed to injure the reputation of Speaker Hastert after becoming actually aware that the published statements were false. All available remedies will be pursued for such conduct.

In response to Evans' letter, the Sunlight Foundation corrected in its report the distance of the real estate to the proposed new highway, which originally read "a few miles" and has now been corrected to read "5.5 miles." However, the foundation is otherwise sticking by its report. In particular, it is critical of Hastert's failure to identify the existence of the land trust and a street address or plat map identifying the location of the report, which it believes is required by the House Ethics manual for member's financial disclosure forms.

The Sunlight Foundation's report does raise some serious concerns about Hastert's candor in disclosing the real estate transactions in question. Any reasonable person reviewing his personal disclosure form would reach the same conclusion. It also raises serious questions about how a man of relatively modest means and consumed by his demanding job as Speaker of the House could have the time and means to engage in multi-million dollar land transactions. Perhaps Speaker Hastert is not the same man I knew him to be in Springfield, Illinois 20 years ago.


Anonymous said...

This is like a walk down memory lane....making money in real estate deals and road construction is a time-honored tradition in American politics, but I hadn't heard of a recent example.

theBhc said...

Actually, it reminds me a lot of the old railroad baron days: own a railroad, buy up a bunch of land somewhere, run your tracks right through it. Real estate sky rockets and you've made a fortune.

Anonymous said...

When you think about if, visions of B&W 1940's movies come to mind....or old westerns (Blazing Saddles, anyone?) It almost conjurs up a sense of nostalgia....until you are hit with the ugliness of it all!