On Thursday afternoon, a stunning bit of political news broke: Former House speaker Dennis Hastert (R-Ill.) was indicted by a federal grand jury on charges that he lied to the FBI and tried to mask cash transactions made from various banks.

The case is fascinating and a bit complicated, so we thought a walk-through based on the indictment was in order. All of what follows are allegations; Hastert has not been found guilty in a court of law.

Hastert was confronted by someone in 2010 and allegedly agreed to pay money to keep something quiet. According to the indictment, an unnamed longtime acquaintance of Hastert (whom the document refers to as Individual A) brought up "past misconduct" by the former speaker during a conversation in 2010. Over the course of ensuing conversations, Hastert agreed to give Individual A a total of $3.5 million to "compensate for and conceal his prior misconduct."

The past misconduct isn't specified, nor is the time frame during which it allegedly occurred.

Hastert allegedly began making $50,000 cash payments to Individual A. Hastert withdrew $1.7 million in cash from various bank accounts through 2014 to give to Individual A. Shortly before he left office, Hastert reported between $3 million and $12 million in assets from real estate holdings; after leaving office, he was a successful lobbyist in Washington.

Hastert's first problem is that federal law mandates cash transactions exceeding $10,000 be reported using a Currency Transaction Report. The reason for this is pretty obvious: It is meant to allow criminal activity to be traced. It is also illegal to break up large transactions into smaller ones to avoid the reporting requirement. That's known as "structuring."

From June 2010 to April 2012, Hastert withdrew $50,000 sums from several banks at which he had accounts and gave the money to Individual A every few weeks. Those transactions weren't reported.

When a bank asked about the transactions, he allegedly reduced the withdrawal amounts to under $10,000 to avoid reporting rules. After a bank asked about the large sums he was withdrawing, Hastert started pulling out money in smaller increments — in other words, allegedly structuring the payments.

The FBI started investigating Hastert's transactions. It's not clear what prompted the investigation, but the implication is that the bureau was given a heads-up by one of Hastert's banks.

Confronted by the FBI, Hastert allegedly lied about the payments. His second legal problem was his response to the FBI inquiry. The FBI was looking for answers to several questions: Was he taking out money in increments of less than $10,000 to avoid reporting requirements? Was he withdrawing the funds as hush money or to cover a crime? Was he being extorted?

Hastert was asked whether he took the money out because he didn't trust the banking system. His reply? "Yeah ... I kept the cash. That's what I'm doing." This was not true, according to the FBI's investigation that uncovered the details above.

The two counts Hastert faces are that he:

  1. "did knowingly and willfully make materially false, fictitious and fraudulent statements and representations in a matter within the jurisdiction of the Federal Bureau of Investigation," and
  2. "did knowingly and for the purpose of evading the reporting requirements of Title 31 ... structure and assist in structuring transactions ... in United States currency in amounts under $10,000 in separate transactions on at least 106 occasions."

There's still a lot we don't know about the case. But as so often happens, it appears to have been the coverup that led to Hastert's downfall.