Monday, June 01, 2015

How "Public Servant" Hastert Got His Riches

In addition to the surprise over the indictment of former House Speaker that raised the issue of Hastert's past sexual abuse of a male student, many have been surprised at how a former school teacher and coach was in a position to be paying millions in hush money.  The answer, of course, is Washington's revolving door which allows former elected officials to reap millions after retirement to work for lobbying firms and other organizations.  Hastert in more ways than one represents what's wrong with Washington today. A piece in The Daily Beast looks at how Hastert became wealthy as have far too many politicians.  Here are excerpts:
It’s clear that the indictment of Dennis Hastert has raised more questions than it’s provided answers. But I suspect a lot of people are asking the wrong ones. Hastert’s “misconduct” may turn out to be of sexually predatory nature, in which case talk of how much his reputation is worth is picayune compared the nature of crime. But there are questions about what he did that are applicable to the entire industry he represents.

The most obvious question, that’s also the least relevant for most Americans: What is the “misconduct” that Hastert is alleged to have been trying to cover up?

If the conduct was sexual abuse, as sources are saying, then the statute of limitations has run out. It follows that Hastert wasn’t paying hush money to stay out of jail, he was protecting his reputation.

A better question, and one that many Washington watchdogs leapt on quickly: How did Hastert happen to have enough money lying around that paying out $3.5 million was even within the realm of possibility?

Hastert’s ability to participate in the blackmail is, after all, itself a general indictment of D.C.’s “revolving door” money culture, in which former lawmakers move easily from government into lobbying. In Hastert’s case, the ability to profit off of one’s legislative position is especially galling: While in office, Hastert used the earmarking process to turn his investment in some Illinois farmland into a profit of 140 percent when a federal highway project just happened to make its way through those very fields. Indeed, it was this instance of a completely legal form of insider trading that helped prompt Congress to end earmarks.

And, of course, Hastert made even more money once he was out of office. One study found that, on average—and when the information is publicly available—former lawmakers get a 1,425 percent raise when they make the jump from Capitol Hill to K Street. Hastert, who was worth between $4 million and $17 million when he left Congress, was making $175,000 as a representative. His K Street bump would be to almost $2.5 million a year.

And, it’s important to remember, what Hastert was covering up with that hush money was not a “reputation” as an average citizen might conceive of it: something akin to honor or trustworthiness or fidelity. A lobbyist’s reputation, after all, actually hinges on his or her established lack of principles. A lobbying client for someone who is a former member of Congress is paying a premium for that person’s willingness to engage in barely-legal favor-trading. A lobbyist’s prices go up the more corrupt he is. Who wants to hire an honest one?

1 comment:

EdA said...

Yes, and Virginia Republiscum Cong. Eric Cantor was not being simply altruistic when he left Congress a few months early. He spent a noticeable chunk of what proved to be his last term ensuring that he would be able to pass confidential information on to his wife legally, for example. And while he may have lost out on potentially becoming Speaker of the House of Represenatives, he didn't do so poorly financially as the result of his loss.

Moelis will pay Cantor $400,000 in base salary this year [2014] and next, with a bonus of $400,000 in 2014 plus $1,000,000 in restricted stock units.