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Sunlight Foundation Report on Speaker Hastert's Prairie Parkway Land Deals

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Dennis Hastert's Real Estate Investments
Written by Bill Allison on June 14, 2006 - 2:16pm.

House Speaker J. Dennis Hastert has used an Illinois trust to invest in real estate near the proposed route of the Prairie Parkway, a highway project for which he's secured $207 million in earmarked appropriations. The trust has already transferred 138 acres of land to a real estate development firm that has plans to build a 1,600-home community, located less than six miles from the north-south connector Hastert has championed in the House.

Hastert's 2005 financial disclosure form, released today, makes no mention of the trust. Hastert lists several real estate transactions in the disclosure, all of which were in fact done by the trust. Kendall County public records show no record of Hastert making the real estate sales he made public today; rather, they were all executed by the trust.

The trust, called the Little Rock Trust #225, transferred 138 acres of farmland in which Hastert had an interest to a company called RALC-Plano LLC on Dec. 7, 2005. (See Document 1, attached) Illinois Secretary of State records show that the company is a wholly owned subsidiary of the Robert Arthur Land Company. The company’s Web site lists plans for a Plano development called North County, with lots for 1,635 homes, 33 acres for commercial and retail businesses, and 18 acres set aside for a public school.
The proposed path of the Prairie Parkway is a little more than 5.5 miles to the east of the development; the Kendall County Board has already voted in favor of putting an interchange on Galena Road, giving residents of the new development easy access to the highway.
Hastert has argued that the highway is needed to cope with Kendall County's rapid population growth. In 2002, for example, he said the proposed highway will "address tomorrow's growth-related problems before they occur."

Hastert’s use of the trust obscured his ownership interest in particular parcels of property. For example, Hastert listed, on his 2004 financial disclosure form, that he had acquired a "1/4 share in 69 acres (Plano, Ill.)" on Feb. 17, 2004. However, a search of Kendall County public records for Hastert's name revealed no such purchase. Instead, Little Rock Trust #225 acquired the property, effectively hiding Hastert’s interest in the land. (See Document 2.)

On May 2, 2005, the Hasterts transferred an additional 69 acres of land--part of the property they bought as a primary residence in 2002--to the trust. (see Document 3.)

Those two properties, according to Kendall County’s online real estate records, were sold by the Little Rock Trust to RALC-Plano for more than $4.9 million on Dec. 7, 2005.

The trust was established on February 9, 2004. Under Illinois law, trusts have no obligation to make public the identity of their beneficiaries. The Little Rock Trust #225 documents do show that the trustee is Dallas C. Ingemunson, who wears multiple hats in Illinois and Kendall County politics. He serves as treasurer of Hastert's federal campaign committee, chairman of the Kendall County Republican Party, and is sometimes described as Hastert's political mentor.

The trust continues to acquire property. On his 2005 financial disclosure form, Hastert lists a purchase of "1/3 share of 125.96 acres (Kendall County, IL)" for between $1,000,001 and $5 million. That land--located at 15715 Miller Road in Plano--was actually acquired by the Little Rock Trust. (See Document 4.)

In the interests of public disclosure and transparency in government, the Sunlight Foundation first contacted Hastert's office on May 26 to see if they could clarify the speaker's 2004 financial disclosure form, and whether he had used a partnership or trust to acquire the quarter share of the 69 acres in Plano. We are still waiting for a response.

UPDATE:  Speaker Hastert's attorney responds

Randy Evans, the private attorney of House Speaker Dennis Hastert, sent the following email in response to our post on Hastert's . I am posting it with his permission.

Sent: Wednesday, June 14, 2006 4:10 PM
To: Eric Schmeltzer; Bill Allison
Cc: Passantino, Stefan

Subject: Legal Demand for Immediate Action

Dear Mr. Schmeltzer and Mr. Allison:

The statements in your release below are untrue. Rather than simply disclose participation in a trust (without disclosing what the trust owns), Speaker Hastert disclosed the amount of his interest and the location of the property on the Financial Disclosure for the year in which the closing of the transaction occurred. This is confirmed by the entries on the Financial Disclosure forms themselves confirming the interest (including amount), the property, and the type of transaction (sale, purchase, or exchange). The statements and innuendo in your release are thus false and misleading.

In addition, the property purchased is adjacent to his home and is more than 5.5 miles from the Pairie Parkway Corridor. This would be like complaining about a purchase in Alexandria, Virgina based on rennovations at the Capitol.

Demand is hereby made that the false, libelous and defamatory matter be immediately withdrawn and corrected. The failure to do so will confirm intentional and wilful conduct by you designed to injure the reputation of Speaker Hastert after becoming actually aware that the published statements were false. All available remedies will be pursued for such conduct.

Sincerely,
Randy Evans
Counsel to Speaker J. Dennis Hastert


In response, let me note the following:

1) The Speaker does have a trust, as Mr. Evans confirms.

2) The Speaker did not disclose the trust's existence, as Mr. Evans confirms.

3) I have over a dozen years experience researching public records, and I couldn't find the location of Hastert's real estate from the information he provided on his personal financial disclosure forms. I also called and emailed the Speaker's office multiple times to get more information, and could not get sufficient information to determine where the property in question was.

4) The purpose of financial disclosure is to provide the public with information about a lawmaker's economic interests. The House Ethics manual states, in its chapter on disclosure,
Disclosure of real property should include a description sufficient to permit its identification (e.g., street address or plat and map location).
Does the phrase, "1/4 share of land (Plano, Ill.)" meet that test? (See #3 above).

5) I will take Mr. Evans at his word that the distance between the Prairie Parkway is more than 5.5 miles, and not "a few miles" as I wrote. I apologize for the imprecision--it was very difficult for me using several different maps drawn at different scales to estimate the distance. I am gratified to know that the Speaker's counsel was able to make such a precise calculation so quickly. I have revised the post accordingly.