The game of "Can you top this?" in the world of phony prosecutions continues with the indictment of former House Speaker Denny Hastert at the behest of prosecutors in the Northern District of Illinois. Here's the indictment. I like the lead line of today's Washington Post story by Janell Ross:
In journalism, there's a time-worn saying: It's not the crime but the coverup that gets them every time.
OK, Janell, but is it a crime to cover up something that is not itself a crime? Can you explain why?
Seems like Hastert was being blackmailed over some alleged misconduct dating from a time 30 or so years ago when he was a high school wrestling coach. He was paying the blackmailer in cash, and withdrew the money in multiple increments from several banks each month, each withdrawal under $10,000.
Now as far as I know, blackmailing someone is a crime, but paying blackmail is not. So what has Hastert been indicted for? There are two charges in the indictment. One is for the crime of "structuring." The other is for lying to the FBI.
You haven't heard of "structuring"? You may have heard that if you deposit or withdraw an amount of $10,000 in a bank they are required to file something called a "currency transaction report" and report you to the government. Of course people caught on to that, and started dividing up their deposits into amounts under $10,000. So in 1986 Congress in its wisdom made a crime out of intentionally dividing up your deposits to avoid reporting to the government. It's 31 U.S.C. Section 5324.
This is all part of the government's crackdown on what it calls "money laundering." I have previously referred to this as "the most insidious area of government regulation." Supposedly the idea is to catch drug dealers and terrorists -- or at least that's how it's sold to the gullible public -- but money laundering regulation is completely useless in dealing with those things. An article by Charles Kenny in Bloomberg News back in February could not identify one single terrorism prosecution that had come out of anti-money laundering regulation. I can't find one either. And if anti-money laundering regulation was of any use against drug kingpins, then why hasn't the drug war been won instead of lost? Kenny cites a recent study by Levi, Reuter and Halliday for the IMF that finds "no demonstration of [the] benefits" of AML regulation. Nada, zip, zilch.
By the way, the administrative bureaucracies at banks to deal with this AML stuff cost tens of billions of dollars per year in the aggregate. And no matter how much they spend, the banks have no practical way of cracking down on money laundering. It's obvious to everyone that literally all drug money finds its way somehow into the banking system, and in a world where almost all deposits and withdrawals involve no human interaction, the possibilities for identifying which ones are "drug money" are just about nil. But the feds endlessly torture banks for supposedly not having sufficient "controls" to stop the money laundering. Just today the Wall Street Journal front page has a story that Citigroup plans to close its Banamex subsidiary because of government allegations that its money laundering "controls" are weak. Believe me, the Mexican drug lords will still figure out a way to move their money.
If you really want to get your blood boiling, troll around a little for some articles on what "anti-money laundering" prosecutions are actually about. The answer is, this is how the predatory government steals money from hard-working small business people under the color of the law. Here's an article from Radley Balko in the Washington Post in 2014 reporting on a few cases that have gotten some notoriety: a young immigrant woman from Russia who wanted to make a down payment on a house and had difficulty getting money wired from her bank account in Russia so she withdrew cash in several increments from ATMs and deposited the money in her U.S. account; one seasonal produce market in Frederick, Maryland, and another one in Maryland on the Eastern Shore; a small grocery store in Fraser, Michigan. Or check out this story about the small Mexican restaurant in Iowa that had its entire bank account seized by the feds. And so forth. In each case the government steals the money first and then puts you through endless and expensive legal process to get it back. Their game plan is to "settle" for keeping most but maybe not quite all of the money for themselves, while you, if you are lucky, just barely survive being put out of business.
In none of these cases was there any allegation by the government that the activity that earned the money was in any way illegal. Could it really be that "structuring" is a crime even if both your source and use of the money are completely legal? Absolutely, or at least that's the government's position.
So sorry, Denny, but the fact that you were using the money for a legal purpose is not going to help you. And in fact, I might even have had some sympathy for you myself, except for one small thing: although you weren't in Congress when the "structuring" thing was initially passed in 1986, you were there for several increments to the criminal money laundering regime, including that you were the Speaker in 2001 when the USA PATRIOT Act hugely expanded the whole thing. Do you mean it never occurred to you that they wouldn't ever catch a single terrorist with this regime and instead would turn their guns on you? Too bad, my friend.
The other "crime" that Hastert is charged with is "lying to the FBI." (18 U.S.C. 1001) Again, does it surprise you that that is a crime? Here they have all these elaborate rituals of making people raise their right hand and administering oaths and calling people before grand juries. You fully understand that lying after you have gone through all of that is a crime, known as perjury. But if they skip all the ritual it's still a crime? Yup. In fact, a perfectly reasonable way of looking at it is that the ritual is all just a trick to con people into thinking it's not a crime to lie when you are not under oath.
UPDATED, June 15, 2015. Previous version incorrectly stated that Hastert was in Congress when the "structuring" law was originally enacted. It was enacted in 1986; he entered Congress in 1987.