I saw this story earlier this week, and it’s been nagging at the back of mind ever since. Dennis Hastert allegedly engaged in serious sexual misconduct and then paid the victim millions to remain silent; that’s not really defensible on a moral level, and the crimes with which he’s been charged are not related to the sexual misconduct.
Instead, he’s “been indicted for two alleged felonies: 1) withdrawing cash from his bank accounts in amounts and patterns designed to hide the payments; and 2) lying to the FBI about the purpose of those withdrawals once they detected them and then inquired with him.”
As Conor Friedersdorf explains:
It isn’t illegal to withdraw money from the bank, nor to compensate someone in recognition of past harms, nor to be the victim of a blackmail scheme. So why should it be a crime to hide those actions from the U.S. government? The alarming aspect of this case is the fact that an American is ultimately being prosecuted for the crime of evading federal government surveillance.That has implications for all of us.By way of background, financial institutions are required to report all transactions of $10,000 or more to the federal government. This is meant to make it harder to commit racketeering, tax fraud, drug crimes, and other serious offenses. Hastert began paying off the person he allegedly wronged years before by withdrawing large amounts of cash. But once he realized that this was generating activity reports, he allegedly started making more withdrawals, each one less than $10,000, to avoid drawing attention to the fact that he was paying someone for his silence.Again, the payments weren’t illegal. But as it turns out, structuring financial transactions “to evade currency transaction reporting requirements” is a violation of federal law.
Although initially designed to identify criminal behavior such as drug cartel transactions, racketeering, and terrorist’s money trails, the law is willfully abused by the IRS to confiscate the bank accounts of small business owners without any evidence of a crime. The small business owner has the responsibility (and with now empty bank accounts) to prove that they are not engaged in any criminal activity. According to Hot Air, “the IRS used this tactic 639 in 2012 alone, with only 20% of those cases ever being prosecuted.”
Watch Judge Napolitano discuss the increase in these problematic IRS seizures:
This is such a wide-spread problem that Senator Chuck Grassley (R-IA) has sponsored legislation to curb such federal asset seizures. Until it is curbed, however, it is a crime for small business owners to try to protect themselves by being careful about how they deposit money from their business so as not to raise a red flag at the IRS and have their assets seized with no charges filed or pending.
What about another hypothetical instance such as that posited by Friedersdorf:
Imagine that a documentary filmmaker like Laura Poitras, whose films are critical of government surveillance, is buying a used video camera for $12,000. Vaguely knowing that a report to the federal government is generated for withdrawals of $10,000 or more, she thinks to herself, “What with my films criticizing NSA surveillance, I don’t want to invite any extra scrutiny—out of an abundance of caution, or maybe even paranoia, I’m gonna take out $9,000 today and $3,000 tomorrow. The last thing I need is to give someone a pretext to hassle me.”*That would be illegal, even though in this hypothetical she has committed no crime and is motivated, like many people, by a simple aversion to being monitored.
It is not a crime to buy a $12,000 video camera, nor to withdraw money from your own bank account, but doing so in such a way so as to avoid government scrutiny is—in and of itself—a felony?
Friedersdorf further explicates the potential implications for us all: “What if the government installed surveillance cameras on various streets in a municipality and then made it a crime to walk along a route that skirted those cameras?”
Not only is it likely that you are breaking some obscure law right now, but as Friedersdorf concludes, “if the state can decide that specific, legal behavior will trigger scrutiny by federal law enforcement and that any attempt to avoid that scrutiny is illegal, even if no other crime is proved, everyone’s privacy and freedom from unjust arrest is undermined.”
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