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Ex-Speaker Hastert conducted business in government office to tune of $1.8 million in taxpayer cost, paper finds

Published: Wednesday, Nov. 14, 2012 9:30 a.m. CDT • Updated: Wednesday, Nov. 14, 2012 9:31 a.m. CDT

(Continued from Page 2)

(MCT) — CHICAGO—Former U.S. House Speaker Dennis Hastert has conducted private business ventures through a little-known government office that has cost taxpayers about $1.8 million, a Chicago Tribune investigation has found.

Federal law allows former House speakers to maintain a government-financed office for up to five years to wind down matters relating to their tenure. They are not permitted to use the office for financial gain.

But the Tribune found that a secretary in the ex-speaker’s government office used e-mail to coordinate some of his private business meetings and travel, and conducted research on one proposed venture. A suburban Chicago businessman who was involved in the business ventures with Hastert said he met with Hastert at least three times in the government office to discuss the projects.

A government watchdog group, told of the Tribune’s findings, called for an ethics investigation into Hastert’s use of the Office of the Former Speaker in west suburban Yorkville.

Hastert, an Illinois Republican, said he did not misuse the office. “I didn’t work on any private business out of there,” he said.

Hastert, 70, spent nearly 21 years in Congress, leading the House for eight years until January 2007 and leaving later that year. He now works as a lobbyist for Dickstein Shapiro in Washington and has a consulting business, Hastert & Associates, in Illinois. Meantime, he collects three government pensions totaling about $106,000 a year.

Court records, interviews and dozens of e-mails link the Office of the Former Speaker to J. David John, a Burr Ridge businessman who made six of the e-mails public in a lawsuit in DuPage County against Wheaton College, a small, evangelical Protestant institution.

John, 48, and Hastert are both graduates of Wheaton. John said in court papers that he met Hastert about 16 years ago, and both men wrestled at Wheaton and remain fans of the sport.

John graduated from Wheaton in 1985 and later earned a master’s degree from Columbia University and an MBA from the University of Chicago. He is the managing U.S. partner for Interstate, a London-based company that specializes in product and brand identity and has worked with Formula One auto racing.

By 2008, Hastert teamed up with John on several ventures, including proposals for a Formula One-quality racetrack in Southern California and sporting events in the Middle East, John said in court records.

Hastert was to receive 7 to 10 percent of the managing partners’ proceeds from each project, John said in court papers. Hastert, though, said he did not have a contract to do business with John and was helping a friend.

Lisa Post, a secretary in the Office of the Former Speaker who handles Hastert’s schedule, was in contact with John on the projects. Post used the e-mail address lisapost(at)formerspeaker.org to communicate with John regarding his and Hastert’s business travels and meetings from 2008 through 2010.

In an email about the racetrack, Post asked John to call her at the Office of the Former Speaker and gave him an office cellular telephone number. “I talked with the Speaker about this project/trip and I wanted to pass on a few things to you,” she wrote in the Oct. 16, 2008, email.

Weeks later, on Dec. 8, Post sent John an e-mail saying she had conducted research related to the racetrack project and shared with Hastert “what my research turned up.”

Hastert told the Tribune he was unaware of Post conducting research and saw no problem with Post’s use of office e-mail to communicate with John. He said Post, who is paid $116,365 a year as a federal employee, handles his schedule “24/7.”

“What she had to do was make people on the government side and the nongovernment side know the time I was available,” Hastert said.

Post, speaking to a reporter during a September visit to the office, said her job in the Office of the Former Speaker was, “The same as it’s always been, which would be to manage the speaker’s schedule.” She would not elaborate and declined to answer follow-up questions relating to the emails between her and John.

The amount spent so far by the ex-speaker’s office—about $1.8 million—does not include spending since June, and Post declined to provide up-to-date figures.

While Hastert insisted he did no private business through the office, a letter written by the ex-speaker indicates that the California racetrack project was indeed a personal business venture for him.

Hastert, using a letterhead from Hastert & Associates, on Nov. 10, 2008, wrote to a local government official in California and praised the project. In the letter, which John filed in court, Hastert wrote that he looked forward to meeting with the official.

“David John has invited me to serve as a director for a project in your district of Riverside County,” Hastert wrote. “… In my conversations with David he told me that you have already been very supportive of this idea. I believe that (Rep.) Mary Bono Mack will also be very eager to see this project come to fruition.”

Hastert told the Tribune he wrote the letter as a “courtesy” to John.

In December 2008, Hastert and John traveled to Southern California for a series of meetings with potential racetrack investors and Riverside County authorities, according to interviews and e-mails. Tom Jarman, then a staffer in the Office of the former Speaker, also was on the trip.

Jarman, who lives in North Manchester, Ind., is one of Hastert’s closest friends, dating to their childhoods. He was paid $116,365 a year from December 2007 until he left the former speaker’s office in June 2010.

Hastert said he and Jarman traveled to California to raise money for the J. Dennis Hastert Center for Economics, Government and Public Policy at Wheaton College. Hastert said John invited himself on the trip, saying, “He kind of tagged along.”

Hastert acknowledged that John paid for his and Jarman’s travel, but he said John did so because he has an interest in the college.

But Jarman said Hastert and John met with numerous people in California to discuss the proposed racetrack. “The trip had to do with business. It was not for fundraising,” Jarman said. “That trip was independent from the speaker’s office.”

John said he invited Jarman to attend meetings and to serve as a consultant.

Frank Cullen Jr., the chief of staff to Mack, R-Calif., said he knew Hastert was a “car buff” and had an interest in the project. But Cullen said he could find no record of Mack meeting with John.

John and his partners planned a racetrack and research center on 610 acres of government land in Mack’s district. News accounts of the project in April 2009 said John left the group because of a “difference of philosophy” in the project’s direction. A potential investor in John’s deal later acquired nearby private land and is building a motor sports club and racetrack.

A year and a half after the California trip, Hastert and John traveled to Montreal to watch a Formula One race. The trip fit in with John’s plans to someday stage a street race in Chicago.

Post e-mailed John about travel arrangements. “Thanks for the flight info,” Post wrote in a June 2, 2010, e-mail. “I don’t see the Speaker’s (frequent flier number) on here and I apologize if I didn’t get it to you. I will call United and get it added to the record.”

Hastert said John paid for that trip as well. He said they flew to Montreal to check out a Formula One race and to gather information, with hopes of bringing the international event to Chicago’s lakefront.

Hastert said he was especially intrigued since Chicago in 2009 lost its bid to host the 2016 Summer Olympics. “I thought a Formula One race would be good for the city,” he said.

In other e-mails, Post discussed an upcoming February 2009 meeting involving John, Hastert and the United Arab Emirates ambassador in Washington. John had plans for staging sporting events such as golf and basketball in Middle Eastern countries.

Hastert and John, according to e-mails, met with the ambassador and his staff Feb. 9. The next day, John wrote to the ambassador’s chief of staff and thanked them for “taking the time to meet with Speaker Hastert and me.”

John said he met at least three times with Hastert in 2008 and 2009 inside the Office of the Former Speaker.

E-mails from Post show two of the meetings likely occurred Oct. 29, 2008, and Nov. 7, 2008.

“Tom said he spoke to you yesterday but I wanted to confirm … you will meet he and the Speaker at the office at 11 AM tomorrow, right?” Post wrote in an Oct. 28, 2008, email. She then gave directions to the government office in Yorkville.

Hastert said John came to the office once and they left for lunch. He said there were no discussions regarding private business in the office. Jarman said he attended at least one meeting in the office with Hastert and John but could not recall the topic.

Bob Edgar, president of the government watchdog group Common Cause, said federal dollars should not be used for private business ventures.

Hastert “can’t take the money and do with it what he wants,” said Edgar, a former Democratic congressman. “It’s your money and my money and all of us who pay taxes, so he has to comply with the law.”

Edgar said the Office of Congressional Ethics should investigate whether federal funds were misused by Hastert, who in retirement does not draw a government salary. If Hastert is found to have violated the law, he should repay any money spent improperly, Edgar said.

The ethics office is a nonpartisan agency that reviews allegations of misconduct against U.S. representatives and their staffs.

The Tribune first wrote about Hastert’s government office in 2010. Brad Hahn, a paid consultant to the office and former Hastert press secretary, said then that staffers were combing through documents and mementos from Hastert’s House tenure, handling speech requests and working with the Hastert Center at Wheaton College.

Hahn’s old company, Burnham Strategies Group, received $70,000 from the Office of the Former Speaker. The company last was paid in January 2011, the same month Hahn joined the staff of Illinois’ Republican comptroller, Judy Baar Topinka.

While serving as spokesman for the ex-speaker’s office in 2010, Hahn told the Tribune that Hastert kept his business ventures separate from the operation of the government office. Contacted recently, Hahn declined to comment.

Public records detail spending only through last June, and a Tribune analysis found that the office stands to spend almost $1.875 million before closing. That total does not include federal benefits such as health care for which the three employees were eligible.

Nearly $1.4 million has gone to pay the salaries of Post, Jarman and a third staffer, Bryan Harbin. Harbin, an administrative assistant, was paid $138,551 a year. He went part time last year and now makes half that, records show.

Harbin, like Post, is a former Hastert congressional and campaign aide. His relationship with Hastert goes back to Yorkville High School, where Hastert was his wrestling coach.

Harbin said his many duties in the office included archiving Hastert’s papers and gifts, setting up and attending education programs and forums for schools and colleges, and helping “coordinate the (former) speaker’s appearances and attend events such as groundbreakings and ribbon-cuttings.”

Rent for the office totaling $239,900 was paid to a company partly owned by three sons of lawyer-lobbyist Dallas Ingemunson, a former Kendall County Republican chairman and former campaign treasurer for Hastert. The monthly rent had been $6,300 but dropped to $400 a month in February 2011.

About $21,364 went to lease a sport utility vehicle from Gjovik Auto in Sandwich, a dealership owned by Olaf Gjovik, a political supporter and Hastert friend. Hastert gave up the vehicle in March 2010, Hahn has said.

The office is scheduled to close Nov. 30, Post said.

E-mails between John and Post that link the Office of the Former Speaker to Hastert’s business dealings first surfaced during a court battle John is waging against Wheaton College. John alleges in a lawsuit that college officials and others ruined his business relationship with Hastert, who is not a defendant in the suit.

John filed his suit last year and has amended it twice. His most recent filing on Oct. 3 provided fresh details about the breadth of his business dealings with Hastert and included a half-dozen e-mails between him and Post. The Tribune separately obtained nearly three dozen more emails between John and Post.

In his suit, John said his business relationship with Hastert ended in January 2011. He claimed a former Wheaton College trustee asked Hastert to end any dealings with John. Hastert declined to discuss specific allegations in the suit.

Wheaton College has moved to dismiss the suit and has filed a counterclaim against John, alleging he has defamed the school and its leaders.

“Wheaton College does not believe Mr. John’s allegations have merit and has been vigorously defending itself against his claims,” said LaTonya Taylor, a Wheaton spokeswoman.

John traces the breakup with Hastert to his child custody case in Arkansas, where his former girlfriend, who is the mother of the child, lives, according to court records. John alleges his ex-girlfriend’s father asked a longtime friend who had been a Wheaton trustee to dig up information on John. The trustee is not the same one who allegedly called Hastert.

John claims Wheaton College officials provided to his ex-girlfriend’s family private, false information from his 1980s student records to potentially be used against him in the custody case.

Last summer, John served seven days in the Benton County Jail in Arkansas after the judge found him in criminal and civil contempt for failing to pay court-ordered fees, including covering his ex-girlfriend’s legal bills totaling nearly $46,000, money he eventually paid. John was jailed while he was appealing the judge’s decision to award fees.

John said the various projects he was spearheading died after Hastert pulled out.

“When he’s involved, things get done,” John said in a statement to the Tribune. “When he left the deals, people thought something was wrong.”

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