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In terms of known facts (and some normative judgment I share–on the banking rules and Hastert’s finances), this a pretty good summary (via The Federalist): The 4 Worst Things About Dennis Hastert’s Indictment.
The conclusion is pretty succinct:
Something $3.5-million-worth of bad happened in Hastert’s past, someone was paid money to keep quiet, federal criminalization of banking is out of control, and Hastert’s bank account is suspiciously large.
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From the article:
It must have been something pretty terrible for him to agree to $3.5 million and lie to the Feds. I haven’t done anything that’s worth paying $3.5 million. Maybe, like, $50,000 worth of bad. Tops.
Either people are having much more exciting lives than me, or I have a lot less shame. Probably a little of both. I think $5,000 is probably the limit for me, and I can certainly afford to be blackmailed for more.
@M. Bouffant: That’s a fair point (and agree in general sense).
I think it is more accurate to state that the rules that monitor citizens’ behavior are out of control. The law that caught Hastert was designed to trap drug traffickers and their money laundering.
@Gustopher: I had a similar thought.
@Steven L. Taylor: I have a deal less than zero sympathy for Hastert. And when these laws put Hastert’s actions in front of investigators, are they to simply ignore it? But these laws are largely a product of the War on Drugs, which has become a huge malignancy in our society and has to be ended.
I like Wellington’s motto “Publish and be damned!”
But then, I don’t belong to a political party that aspires to legal control of everyone’s nether parts and who attempted to impeach a President over something to do with his nether parts.
@gVOR08:
“Whosoever diggeth a pit shall fall in it” is the Biblical allusion that comes to mind. Bet when Hastert voted for this provision he never thought it would ever apply to him.
The law that caught Hastert was designed to trap drug traffickers and their money laundering.
And instead it caught a different kind of criminal money-laundering.
Is that bad?
Objecting to transparency in large banking transactions strikes me as the same sort of category error as thinking that spending is a form of speech. If there’s anything society has a real stake in, it’s knowing how the big bucks are flowing.
@DrDaveT: If the law was, in general, simply to provide transparency in financial transactions as a general principle, I might see the point.
However, the logic that you are deploying here is the same general logic that many use to defend the Patriot Act as well as a number of question (IMHO) war on drugs actions: if you aren’t doing anything wrong, don’t worry about (or, at least, creeping application of the law to whatever the authorities can think of is acceptable).
It is the kind of logic, I think, that leads to think like recent NSA behavior. If we want the government to monitor X, then we should transparently give that power. I object to them being given power X and then finding ways to use it for Z, Q, and M.
@DrDaveT:
And instead it caught a different kind of criminal money-laundering.
BTW, unless I am missing something, there was no money laundering involved.
I think that’s a good run down, but $3.5 million does not tell us how bad the behavior was. It tells us how much Hastert stood to lose if the information was disclosed. IOW, if he thought he stood to make $35 million over the rest of his lobbying career, a ten percent surcharge may not be bad. The revolving door has been good to him, but he’s not an indispensable man with unreplicable skills once his character and reputation are blown up.
@DrDaveT: This Radley Balko article is pretty eye opening on how abusive these laws are. My first order complaint is with essentially deputizing banks to monitor suspicious activities of its customers.
@PD Shaw: I agree: that article is worth a read.
I would note this part that that Balko quotes is worth noting:
Historically, the anti-structuring statute has been used by prosecutors as an ancillary charge with other accusations of nefarious behavior, such as drug dealing or terrorism. And it still is. But over the last few years, prosecutors have started to use it more regularly as a standalone charge—an observation noted by defense attorneys that Maryland U.S. Attorney Rod Rosenstein confirms.
I am not a fan of this kind of thing all the way around.
@michael reynolds: Also one of the benefits of being self- employed, and living a fairly conventional life.
Would I be fired from my job if it was revealed that I was a furry? Or had major depressive episodes? Or anxiety disorders? Or was bisexual? Probably not — but only because I live in a liberal city with low unemployment and work in a field that has a lot of problems hiring qualified people.
@Gustopher: I am not actually a furry.
Also, Hastert is likely far, far worse than a furry — furries are consenting adults who know how to sew.
BTW, unless I am missing something, there was no money laundering involved
well….maybe, maybe not…..depends on what individual A did with the money. Did it go under a mattress or was it laundered out? I’m going to go out on a limb here and speculate that it wasn’t reported on one or more tax returns by individual A thus setting up an interesting chat with the IRS…..ill-gotten money is still taxable……
@Peterh: That’s tax evasion, not money laundering.
@Peterh: It’s likely that Individual A would describe the money as payment of compensatory damages for personal injury or mental suffering, which is not taxable, nor reportable. A number of people seem to be assuming this would be treated as income for services rendered, which I think is somewhat disturbing if you think about it.
@Rob Prather: Hastert doesn’t want a record of the transaction that Individual A can later use to extort more. The worst case scenario for Hastert is he pays a huge bribe to avoid having to deny what is probably a deniable claim, and then years later be extorted for more money with his ability to plausibly deny the claim compromised by huge cancelled checks.
@PD Shaw:
This Radley Balko article is pretty eye opening on how abusive these laws are.
Not really. It’s eye-opening on how abusive (and abused) the laws about confiscation of assets are, which is an entirely separate topic. Balko also makes good arguments for varying the punishment according to both the intent of the person making the transactions and the nature of what they are trying to cover up.
The reporting requirement per se is not the problem, and is invaluable to law enforcement in detecting and tracing real crime. The question of what the appropriate penalty should be for evading the reporting requirement is orthogonal to the question of whether reporting should be mandatory. Some of Balko’s hypothetical cases are just silly; there is no danger of a bartender periodically depositing his tips being convicted of structuring.
As best I can tell, the only objection Balko cites to the reporting requirement itself is a weak and ill-formed privacy argument (“There also may be some people who quite understandably don’t want to draw attention to themselves or their businesses.”). If he (or someone else) would like to try to flesh out that argument to something convincing, I’m all ears.
@PD Shaw:
payment of compensatory damages for personal injury or mental suffering, which is not taxable, nor reportable
Are you sure that’s true for private transactions that are neither court-ordered nor government administered? If I sue you and win, the damages are not taxable — but if I threaten to sue you and you just give me some money, I don’t think the tax code can distinguish that from any other gift.
@DrDaveT: I don’t have a problem with a regulation that requires a regulated entity to report an objective fact; I have a serious problem with ordering private entities to conduct investigations of suspicious activities for the government. For one thing, outsourcing investigations to banks strips citizens of Constitutional rights and remedies they would have if the government conducted the investigations.
@DrDaveT: Meant to answer this question earlier.
Are you sure that’s true for private transactions that are neither court-ordered nor government administered?
Money for damages is simply not income:
gross income does not include— . . . (2) the amount of any damages (other than punitive damages) received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal physical injuries or physical sickness;
The reason it’s not income is that the damages are intended to make the individual whole from a prior loss. He/she didn’t earn something through their efforts, they suffered a loss and the money is intended to make them whole.
There could be interesting tax issues depending on all of the facts, but most of these point the finger at Individual A who either received or didn’t receive income. If he received income he was supposed to report it and pay taxes on it. My impression here is that the government does not want to go after Individual A.
@PD Shaw:
The reason it’s not income is that the damages are intended to make the individual whole from a prior loss. He/she didn’t earn something through their efforts, they suffered a loss and the money is intended to make them whole.
I get that; my real question was whether ad hoc compensation of one individual by another, unrelated to any criminal or civil action, would be viewed as “damages received” by the IRS or the courts. The language of 26 USC (“…whether by suit or agreement…”) sounds to me like it’s meant to include both court awards and settlements out of court — but not necessarily transfers in the absence of any litigation whatever.
Otherwise, wouldn’t this give an easy way around the caps on how much money you can give as a gift before it becomes taxable? All you would have to do is claim that your gift isn’t a gift; it’s compensatory damages for mental suffering…
@Rob Prather: It worked for Jerry Springer, after all.
