House Speaker J. Dennis Hastert (R-Ill.) last year made about $2 million in real estate deals on parcels near his Plano home in booming Kendall County and could profit from additional land sales in the future.
But Hastert did not take the extra steps called for in the House Ethics Manual and volunteer that he held land in a secret land trust called “Little Rock Trust #225.”
He disclosed the transactions on the annual personal financial statements members of Congress are required to file. The statements were made public June 14. (View the documents for all members of Congress at www.tray.com)
Two central questions were raised by a new watchdog group, the Sunlight Foundation (www.sun lightfoundation.com), which is digging into the Hastert transactions:
1. Did Hastert’s $207 million federal money “earmark” for construction of the proposed Prairie Parkway last year bolster the values of his land?
The explosive growth of the area, and the role the Prairie Parkway may play, is a major local issue. It — including Hastert’s land sales — is the subject of an in-depth series that just ran in the Beacon News, a member of the Sun-Times News Group (www.suburbanchicagonews.com).
One of Hastert’s two partners in the Little Rock Trust #225 is Dallas Ingemunson, the Kendall County GOP chairman who is Hastert’s political godfather. He said they are investors cashing in on an already skyrocketing market.
Ingemunson, who discussed the transactions with my Sun-Times colleague Eric Herman for our news story last week, said the trust is named after Little Rock Road in Plano, which borders the land. We figured out that Hastert could make some $2 million based on information from Ingemunson and land records dug up by Sunlight investigator Bill Allison, a professional researcher and former staffer at the Center for Public Integrity.
The Hastert land in question was purchased — in December 2005 — by Art Zwemke, the principle of the Robert Arthur Land Co. He plans to transform it into a 1,700-unit residential mixed-used development called “North Country.” President Bush signed the transportation bill with the parkway funding in August 2005 — with Hastert by his side at a Kendall County ceremony.
But the terms, Zwemke told me, were set in a 2004 contract picked up by Zwemke when the original developer quit the project. “We would have bought the property whether there was a Prairie Parkway or not,” Zwemke said.
2. Should Hastert have revealed on his annual disclosure that some of his real estate was owned in a secret land trust named “Little Rock Trust #225?”
Holding back that information — and I am not making any conclusion or inference about motive here, it may have been an oversight rather than a calculated decision — has the practical impact of making it much more difficult for anyone but professional researchers or amateur sleuths to make sense of the disclosure statement.
“We’ve been extremely transparent,” Hastert spokesman Ron Bonjean told me. Bonjean stressed that holding land in secret land trusts is common in Illinois; I agree, it is.
Each year members of Congress are required to fill out a financial disclosure statement. The form is seriously flawed, designed to give a complicated wide-angle view of earned income, assets, liabilities and holdings rather than a simple specific snapshot.
The disclosure exercise, according to the House Ethics Manual (www.house.gov/ethics/ethic schap4.html) is “intended to provide the information necessary to allow Members’ constituencies to judge their official conduct in light of possible financial conflicts with private holdings. Review of a Member’s financial conduct occurs in the context of the political process.” Furthermore, disclosures are supposed to “inform the public about the financial interests of government officials in order to increase public confidence in the integrity of government and to deter potential conflicts of interest.”
Here are some examples of how Hastert described on his statement his sale of 69 acres adjacent to his home: “Home/Property (less 69 acres sold) with a value of the asset between $1 million and $5 million.”
The purchase of 125.96 acres in another part of Kendall County (an acquisition of like farmland, which allows a break on capital gain taxes) is described only as “1/3 share of 125.96 acres in Kendall County” valued between $1 million and $5 million.
These type of descriptions ignore instructions for specificity in the House Ethics Manual: “The identity of the property, in addition to its category of value, must be specified. Disclosure of real property should include a description sufficient to permit its identification (e.g., street address or plat and map location).”
I have nothing against putting property into secret land trusts. I just think the public should be let in on the secret.
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