You’re (Probably) a Federal Criminal

Crony Hung in Own Noose – But No Reason to Celebrate

Imagine our delight! “Crony Hung in Own Noose” is the headline we would have put on the story. The New York Times has the report:

“J. Dennis Hastert, who served for eight years as speaker of the House of Representatives, was paying a former student hundreds of thousands of dollars to not say publicly that Mr. Hastert had sexually abused him decades ago, according to two people briefed on the evidence uncovered in an F.B.I. investigation.

Federal prosecutors on Thursday [May 28] announced the indictment of Mr. Hastert, 73, on allegations that he made cash withdrawals, totaling $1.7 million, to evade detection by banks. The federal authorities also charged him with lying to them about the purpose of the withdrawals.”

Dennis Hastert in better days, armed with his speaker’s gavel

Photo credit: US House of Representatives

John Fund of National Review continues:

But his fall from grace should prompt other questions about how a former high-school teacher who held elective office from 1981 to 2007 could leave Congress with a fortune estimated at $4 million to $17 million. When he entered Congress in 1987, he was worth at most $275,000. Hastert was the beneficiary of very lucky land deals while in Congress; and since leaving office, he has earned more than $2 million a year as a lobbyist.

Denny Hastert used to visit the Wall Street Journal where I worked when he was speaker. He was a bland, utterly conventional supporter of the status quo; his idea of reform was to squelch anyone who disturbed Congress’s usual way of doing business.”

Although everyone else is down on the apparent child molester/crony enabler/and hack politician… today, taking a line from the French and the “Affair Charlie Hebdo”: We Are Dennis Hastert.

The Usual Corrupt Way of Doing Business

The usual way of doing business in Washington is, of course, corrupt. It is intended to protect the status quo because it is the quo that has the status… and the money.

That’s how people such as Hastert, Newt Gingrich, and the Clintons have pocketed so much money – by helping the cronies and the politicians get together… working together, hand in sleazy hand, trying to prevent the future from happening.

Gingrich made a fortune pushing drugs (i.e., lobbying for the trade group Pharmaceutical Research and Manufacturers of America). Hastert made much of his money pushing candy-flavored tobacco. The Clintons help foreign governments get what they want from Washington… and get paid millions for their speeches.

An assortment of Washington cronies

Nancy Pelosi and her husband made millions as “special customers” in an IPO of Visa stock, while Pelosi strangled legislation that would have lowered the company’s profits. But what is at least mildly satisfying is that Hastert stuck his head into his own stupid noose.

While in Congress, Hastert approved and promoted laws that made it harder and harder to conduct one’s financial affairs freely and privately. He was charged neither with molesting a minor nor with bribery or fraud. Instead, the feds tagged him for “structuring” banking transactions so as to avoid federal reporting requirements.

The trouble is the noose is tightening on us all.

The noose is tightening – image from the graphic novel Maus.

The Banks Won’t Bank

A friend in Paris reports:

“When I landed in the U.K. last week, my U.S. bank “helpfully” froze my ATM card, because they figured I couldn’t possibly be the one using it. Had I not had a small amount of cash in pocket before getting to a WiFi zone, so I could Skype-call them (my SIM card wouldn’t work in the U.K. either), I would have been out of luck.

And this, not a week after getting a letter from our French bank, saying they could no longer carry our checking account, because they aren’t “registered with the SEC.”

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In Argentina, too, the long reach of the U.S. cronies is causing trouble. When you travel to a place such as Argentina, you take cash. Because it’s an economy that functions on cash, not credit. But taking cash out of a U.S. bank sets off alarms.

An 82-year-old American, living in Buenos Aires, was ratted out by his bank when he took out $10,000 to take with him back home. Then the bank closed his account. It didn’t matter that he had been a customer for 40 years.

And then, in Switzerland, our bank – with which we have done business for years – has just turned us out, too.

“This is not a tax issue. We know you’re paying your taxes. [How did they know?] It’s just that we’re not prepared to deal with U.S. clients any longer. The regulatory costs are too high.”

No big deal. We can change banks. But wait. Maybe that’s against the law, too. The system is so rigged up that the feds can go after anyone – even one of the riggers himself.

There are so many pettifogging papers to file, so many jackass regulations to watch out for, so many rules you probably don’t think apply to you – you’re bound to spend most of your life in breach of some criminal statute.

Between the time the average commoner gets up and the time he slurps his first sip of coffee, he has probably broken a minimum of three laws …

Image via paloaltofreepress.com

Asset protection specialist at the Sovereign Society Ted Bauman:

“…what matters is over-criminalization: converting trivial, harmless acts into major felonies. For example, the postal worker who flew a gyrocopter on to the U.S. Capitol lawn to protest the corrupt role of money in U.S. politics faces up to nine years in prison on multiple felony charges. Three U.S. restaurateurs were sentenced to eight years in federal prison for “importing lobster tails that were the wrong size and that were packaged in clear plastic bags rather than in cardboard boxes,” which violated a Honduran law that they didn’t even know existed and the Lacey Act. People have served time in federal prison for faking sick days and getting lost in federal parks.

Federal appellate judge Alex Kozinski wrote an essay titled “You’re (Probably) a Federal Criminal.” In it he gives numerous examples of federal felony statues that are so absurd — such as inadvertently misfiling a tax return — that no one with a sense of justice would ever use them. Indeed, if all these laws were enforced as written, “Any attempt to go after all criminals would sweep up millions of people.”

But selectivity is precisely the point of many of these laws. As crusading lawyer-journalist Glenn Greenwald points out, “When everything — even trivial transgressions — can become a serious felony, it empowers law enforcement to punish whomever they want.”

For reasons we don’t know… they have chosen Hastert this week. Who’s next?

The ruling classes have always used legislation to keep the serfs in check. Here is 23 month old Francois Bertillon, arrested in France in 1893 for the crime of gluttony …

Image via livejournal.com

The above article originally appeared at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.