Judge tosses lawsuit accusing former U.S. House Speaker of improperly using taxpayer-funded office

By Jonathan Bilyk | Sep 25, 2014

Former Speaker of the U.S. House of Representatives J. Dennis Hastert will not need to fight a lawsuit accusing him and his staff of improperly using a taxpayer-funded office, vehicles, phones and other equipment to run and manage his private dealings since he left office.

On Sept. 18, U.S. District Judge Charles P. Kocoras dismissed a suit Burr Ridge businessman J. David John brought against Hastert in 2013 in Chicago's federal court as a relator on behalf of the U.S. government.

In his ruling, Kocoras said the allegations John brought against Hastert -- claims backed by his personal recollections of meetings with Hastert on personal business in the former speaker’s taxpayer-funded office and by a 2012 Chicago Tribune article -- were not specific enough to meet the standards demanded by the federal anti-fraud statute, known as the False Claims Act (FCA).

“John omits specific facts necessary to meet the heightened pleading standard,” Kocoras wrote in his 11-page ruling that grants Hastert's motion to dismiss.

John’s now-dismissed suit centered on allegations Hastert has violated federal law since leaving Congress in 2007.

Federal law allows former Speakers of the House to set up a publicly-funded office in their home district for the “settlement and conclusion of matters pertaining to or arising out of his incumbency in office.”

Hastert, who was first elected to Congress in 1987 and served as Speaker from 1999 to 2007, set up his office in his native Yorkville, Ill., with a staff of three, as well as official vehicles and other taxpayer-funded equipment.

In 2008, Hastert joined a lobbying firm, and was hired by John shortly after to assist with various projects, including the organization of a golf tournament in the Middle East and the development of a Formula One racetrack and technology park in California.

The business relationship between John and Hastert fell apart around 2011, when John became embroiled in a legal action against Wheaton College over the alleged decision by college officials to release portions of his student records to the family of a woman who he was suing to establish paternity of a child he claimed to have fathered with her out of wedlock while a student there.

John has alleged the family used that information to then interfere with the paternity suit and to sour his business relationship with Hastert.

As part of the litigation against Wheaton College, John made public several emails from Hastert’s office staff detailing their involvement with John’s projects and indicating Hastert used his office to work on those ventures, the Tribune reported.

In his complaint, John alleged he personally met with Hastert in his office on at least three separate occasions in 2008 and 2009 to discuss his personal business.

Further, John claimed Hastert’s staff used official phones and email between 2008 and 2010 to make travel arrangements; used taxpayer-funded staff time to prepare presentations and perform other work on behalf of John’s ventures; and used taxpayer-owned vehicles for “personal engagements.”

When Hastert submitted claims to the federal government requesting payment for those hours worked, John contends Hastert violated federal law.

As damages, John asked the court to order Hastert to pay back the federal government the amounts billed from 2008 to 2012 at triple the judgment, as well as $5,000 to $11,000 for each monthly claim submitted.

Kocoras, however, said John’s suit fell short of the legal standard to even establish the basis for a civil liability suit under the FCA.

He said plaintiffs suing under the FCA must “identify … certain particulars that the court, as a reader of John’s ‘first paragraph of a newspaper story’ would expect to find,” including facts demonstrating when the knowingly false statements were submitted, to whom the claims were specifically addressed and what the claims specifically contained.

“For example, as to the private meetings at the office, the court is unaware of when these meetings took place, how long they lasted, what the parties discussed, and why specifically these meetings violated the FCA,” Kocoras wrote.

The judge added, “With respect to the vehicles, nothing is known about how Hastert used his vehicles in an unpermitted manner besides John merely stating they were used for private business purposes.”

John was represented in the action by Chicago attorneys Michael K. Goldberg of Goldberg Law Group LLC and John J. Muldoon III of  Muldoon & Muldoon LLC.

Hastert was represented by Justin A. Chiarodo of Dickstein Shapiro LLP in Washington D.C. and his son Ethan Allen Hastert of Mayer Brown LLP in Chicago.

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