WASHINGTON -- Republican House Speaker Dennis Hastert and two partners turned a profit of more than $3 million on property they accumulated and sold in just over three years near the route of a proposed controversial freeway on the western fringe of suburban Chicago, according to land records and financial disclosure reports released Wednesday.

Hastert spokesman Ron Bonjean rejected the notion that the land, located 5 1/2 miles from the proposed Prairie Parkway route, rose in value because of the highway project. The speaker long has been an aggressive proponent of the highway and helped secure more than $200 million in federal funding through an earmark in federal transportation legislation.

The property near Plano, Ill., was sold three months after the transportation bill was signed into law. It was purchased by a real estate developer who is planning to build more than 1,500 homes on the land.

Kendall County, where the land is located, has one of the fastest-growing housing markets in the nation, and there has been a corollary rapid rise in land values.

Hastert's disclosure came on the day that all members of Congress released required, annual financial disclosure statements.

The disclosures ranged from Sen. Barack Obama's (D-Ill.) earnings of $378,239 in royalties on paperback sales last year of his book, "Dreams From My Father," to Rep. Ray LaHood (R-Ill.) reporting winning a $1,600 travel gift certificate at a drawing held at an Illinois college.

But Hastert's profit was among the more notable in size.

Hastert received five-eighths of the proceeds from the land sale, said Dallas Ingemunson, one of his partners. That indicates a profit of more than $1.5 million for Hastert.

The Sunlight Foundation, a Washington-based ethics advocacy group, assailed Hastert for allegedly profiteering from the proposed highway. The group charged that he had sought to conceal his interest because the sale was made through a land trust that did not publicly identify Hastert as a partner.

Hastert profited `in secrecy'

"Speaker Hastert's trust allowed him to profit--in secrecy--from the very growth that he cites to justify the Prairie Parkway," said Bill Allison, a senior fellow with the foundation, in a statement to reporters.

The property was sold through a land trust, Little Rock Trust No. 225, that identified only one member of the partnership in public records--Ingemunson. He is a long-time supporter and political mentor to Hastert who is chairman of the Kendall County Republican Party.

Such land trusts are a common business arrangement in Illinois. The trusts are not required to disclose all owners.

"When you have multiple owners a land trust is easier to deal with," Ingemunson said. "It wasn't an attempt to hide anything."

Aide: A well-timed investment

Bonjean said the speaker had fully complied with financial disclosure rules for members of Congress and had simply profited from a well-timed real estate investment.

"For 26 years, the speaker has been a proponent of the Prairie Parkway to address the transportation challenges in northeast Illinois," Bonjean said. "None of the properties purchased by the speaker are near enough to the Prairie Parkway to be affected by the proposed highway."

Kendall County land records show the 138-acre parcel was transferred to a real estate developer in a sale valued at $4,989,000 in December 2005, about three months after the highway legislation was signed into law.

The land had been accumulated in phases. The first 69-acre parcel was part of the purchase of a larger 196-acre farm made under the name of the speaker's wife, Jean Hastert, in August 2002. According to land records, she paid $2,125,000 for the property. On a per-acre basis, the original prorated cost to Hastert of the parcel included in the later deal was $868,000.

The remainder sold to the developer was purchased by a land trust in which Hastert shared a quarter-interest in February 2004. The partnership paid $1,033,000 for the parcel, according to land records. In addition to Ingemunson, the other partner was Thomas Klatt, a local trucking company owner who also has been a long-time supporter and campaign contributor to Hastert, Bonjean said.

 Bonjean said he could not immediately determine how the partnership divided the proceeds. He added that the value of the two parcels was enhanced by combining them because the land purchased by the partnership gave the property direct access to a roadway.

The developer who purchased the land said the proposed Prairie Parkway was not a deciding factor in making the deal.

"We would have done the transaction whether it [the parkway] was proposed or not," said Arthur Zwemke, a partner in Robert Arthur Land Co. who also has been a donor over the years to Hastert's campaigns.

More important than the planned freeway are the land's location in the fast-growing western exurban Chicago corridor, a favorable political climate for growth, and the availability of good infrastructure like water and sewer, he said.

Zwemke said he inherited the financial terms for all of the land in contracts acquired from another developer, who decided not to pursue the project.

He acknowledged that he paid a price well above what Hastert and his Little Rock partners paid in assembling the property in less than four years, but said, "We have a fair deal. Everything was market value."

The site is attractive, Zwemke said, because the land for it was assembled in just two transactions, the one with Little Rock and another concluded last August with the owners of an adjacent 589-acre farm.

mdorning@tribune.com

azajac@tribune.com

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