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"The buck stops here," Denny Hastert said the other day. Yes, but we didn't know then exactly what he meant. TNR c/o Raw Story Denny Hastert's dodgy real estate deals. Worse than FoleyGate
by Norman Ornstein & Scott Lilly

Here are the essential facts: In August, 2002, Hastert bought 196 acres of land in rural Kendall County, Illinois for $2,125,000. According to the Chicago Tribune, Hastert bought the plot in two separate transactions. The first deal gave him a house, barn, swimming pool, and 17 acres of land for $1.2 million. In the second deal, he obtained an additional 179 acres on an adjacent property for a little less than $5,200 per acre. The least valuable portions of the second deal were two fields, separated from the rest of the farm by a stream and inaccessible by road.

That was a big deal for a life-long politician and wrestling coach like Hastert, but harmless enough. Eighteen months later, however, Hastert's purchase took a new direction. The speaker entered into a real estate agreement with Dallas Ingemunson, the chair of the Kendall County Republican Party, and a campaign contributor named Tom Klatt. The three men formed a real estate trust and purchased an additional 69 acres of land adjacent to Hastert's two inaccessible fields. The trust paid $1,033,000 for the land, or about $15,000 per acre--more expensive turf than Hastert's plot in part because of its access to a road.

And here's where the deal first begins to acquire a pungent odor: The trust then added Hastert's two fields to the jointly acquired parcel and credited Hastert with 62 percent ownership apparently on the presumption that Hastert's $5,200 land was equal in value to his partners $15,000 land.

These deals coincided with a protracted battle in Congress sparked by the expiration of the 1998 highway bill. Hastert's purchase of his new home and the additional 179 acres of land took place the same month that the House Transportation Committee prepared for its first hearings on a new highway bill--a bill that would be rife with opportunities for members of congress to bring new roads to their districts in the form of earmarks, changes in infrastructure that could have a major effect on real estate values.

Squabbling over the ballooning cost of the bill might have prevented this highway from ever coming to fruition. But Hastert played an unusually active role in shepherding the legislation, a more aggressive role than he played at any other point in his speakership. His dominance of the process was noted by an Illinois highway official, who remarked, "I think it's truly a recognition of the leadership of Speaker Hastert. Speaker Hastert was able to deliver a bill that made it through Congress that the president could sign, rather than a bill that would make it through Congress that the president would veto." Hastert himself explained at one point in the process that the negotiations had become so intense that he was no longer dealing with White House staff and had begun working directly with the president. When the bill finally passed in the summer of 2005, President Bush also recognized Hastert's efforts by traveling to his district for the bill signing ceremony. Bush also mentioned the Prairie Parkway which he said," is crucial for economic development in Kendall and Kane counties."

It was, we now know, crucial to the speaker's own economic development. In December of 2005, four months after the signing of the new Federal Highway Bill containing the $207 million inserted by Hastert for construction of the nearby Prairie Parkway, the 138 acres held by the trust were sold to a developer as part of planned 1600 home housing development. The trust received $4,989,000 or $36,152 an acre for the parcel of which 62.5 percent or $3,118,000 went to Hastert. Klatt and Ingemunson also did well. Their profit equaled 144 percent of their original investment. Hastert, however, received six times what he had paid for his investment, a profit equal to 500 percent of his original investment.

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