Thursday, June 15, 2006

Sun-Times On Hastert's $2 Million Land Deal

The Chicago Sun-Times' D.C. correspondent, Lynn Sweet, picks up today on the real estate deal in House Speaker Dennis Hastert's home district, we first told you about yesterday, which is making Hastert a very rich man. Sweet writes:

House Speaker J. Dennis Hastert pocketed almost $2 million from real estate deals adjacent to his Plano home in booming Kendall County, one of the fastest growing areas in the nation.

The transactions prompted questions Wednesday from the Sunlight Foundation, a new watchdog group, about whether Hastert, who earmarked $207 million in federal dollars for the proposed Prairie Parkway, had his profits swollen because of the highway.

Hastert attorney Randy Evans threatened legal action against Sunlight for the story it posted on its Web site about the deals.

Sweet's report makes it clear that what's not in dispute was how quickly Hastert turned his $2 million profit on the real estate deal. Explaining just how he turned that quick profit, Sweet writes:

*Hastert and his wife bought a 195-acre farm in Plano in 2002, of which 69.5 acres had no access to roads.

*In 2004, Hastert formed a partnership with two friends, GOP power broker Dallas Ingemunson and Tom Klatt. The partners purchased 68.9 acres, with Hastert owning one quarter of the parcel, which fronts a road. This land is adjacent to the other Hastert property.

*In December 2005, the 68.9-acre parcel and the 69.5-acre parcel were sold to a developer, which wants to build at least 1,700 residential units plus commercial space there.

*Hastert's share of the profits from the sale is close to $2 million.

Annual congressional disclosure statements were released Wednesday, and specific information detailing the transactions was reflected in Hastert's filing only to a limited degree, which is about all that is required.

"The speaker has been a long-time supporter of building a north-south highway to address the transportation challenges in northeastern Illinois,'' said Hastert's spokesman Ron Bonjean. "None of the properties purchased by the speaker are near enough to be affected by the proposed parkway,'' he said. Bonjean maintains Hastert's home is 5.5 miles from the Prairie Parkway; the Beacon News puts the development's edge about three miles away.

Ingemunson told the Sun-Times that the three bought the 68.9-acre parcel from a farmer who wanted "to have cash immediately." Klatt, Ingemunson and Hastert formed a trust, which bought the land in 2004 for $15,000 an acre -- a total price of slightly more than $1 million. Hastert bought his 195 acres for about $11,000 an acre, according to Sunlight.

A question that needs to be explained is what motivated Klatt and Ingemunson to cut Hastert in on the deal. As we reported previously, Hastert is a man of relatively modest means. Where did he find the money to pay $11,000 an acre for 195 acres, or $1.1 million for this land-locked property, and then soon thereafter purchase a 1/4 interest in the second $1 million land purchase adjacent to his land-locked property with Klatt and Ingemunson?

Ingemunson, by all accounts, is an independently wealthy man. He surely could have financed the deal all on his own. For a sure thing, why cut Hastert or anyone else in on the deal unless the person brought something to the table or was being rewarded for past services? Note that Hastert's original 195-acre purchase (less 69 acres transferred to the trust) is still intact, but with the development of the frontage property he made $2 million from in a New York minute, the value of his land will no doubt skyrocket. For Hastert, this issue isn't likely to just fade away any time soon.

No comments: