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On the morning of October 1, 1985, protestors gathered in Boston to hurl boxes of tea into the city's harbor. Although it clearly called to mind the Boston Tea Party, one of the events that helped kick off the American Revolution, it wasn't a historical reenactment. Rather, it marked the start of a nationwide campaign by a coalition of groups calling for reforms to the Internal Revenue Service.
George Vernon Hansen, a former Republican congressman from Idaho, was part of the effort. He had headed the political consultancy group New Continental Congress since leaving the House of Representatives, and said it planned to run advertisements on IRS abuses in a bid to raise public awareness.
"We came up to kind of kick off the other side of tax reform," said Hansen. "The President has been pushing structural change in the tax system. We're saying you're not going to have real tax reform unless you reform the IRS. They're intimidating and abusing the taxpayer in the process of collecting taxes."
While the protest took place decades before the creation of the Tea Party movement of the early 21st century, it exemplified how Hansen would be a forerunner the vocal conservative movement and what it regarded as government waste or overreach. He would remain a stubborn foe of the IRS for decades, and routinely accuse it and other federal powers of persecuting him for his beliefs.
The protest came as Hansen's political career and influence were waning. He had twice been convicted of skirting financial disclosure and ethics laws, and was fighting jail time related to the most recent charges. He would later say the difficulties he encountered from these run-ins with the law would contribute to his decision to commit another, more serious financial crime.
Early life and early political career
Hansen was born in Tetonia, Idaho, on September 14, 1930. His early life was marked by a tumultuous turnover in educational, career, and military experiences. He managed a grain elevator beginning in 1950, and would return to this work briefly in 1954. He served in the U.S. Air Force between 1951 and 1954; his military experience would also include graduation from the Army Language school and time as an officer in the U.S. Naval Reserve between 1964 and 1970.
Graduating from Ricks College in 1956, Hansen completed graduate work at Idaho State University between 1956 and 1957 as well as 1962 to 1963. He also earned a degree from Grimms Business College in 1958.
Hansen balanced some of this educational work with a stint as a junior high school teacher, undertaking this profession between 1956 and 1958. He worked in the life insurance business from 1958 to 1965.
One of Hansen's children would later recall that his father entered politics for a simple reason: his community of Alameda didn't have sidewalks like the neighboring city of Pocatello. This motivation helped launch a successful campaign for the mayor of Alameda, with Hansen holding the job from 1961 to 1962. When Alameda was consolidated with Pocatello, he became a city commissioner between 1962 and 1965. He also served as the director of the Idaho Municipal League from 1961 to 1963.
Early congressional bids
After an unsuccessful bid for the Senate in 1962, Hansen turned his attention to the House of Representatives in the 1964 race. Although it was a strong year for the Democrats, who won the White House and made gains in Congress, Hansen's grassroots campaign was able to unseat incumbent Ralph Harding with 52 percent of the vote.
Hansen distinguished himself by his strong disdain for the federal government, including opposition to President Lyndon B. Johnson's civil rights and social welfare programs. He took a hawkish stance on the turmoil in Southeast Asia, saying that Johnson's "lackadaisical prosecution" of the Vietnam War was emboldening the Communists. When the spy ship USS Pueblo was captured by North Korea in January 1968, Hansen declared it an "act of war" and called for a swift response to recover the vessel and its crew, though he also said the situation should not be handled in a way that would lead to the United States being involved in two simultaneous conflicts in the region.
While he was re-elected in 1966, he was less successful when he again tried to capture a seat in the Senate two years later. Frank Church, the Democratic incumbent, comfortably kept the position with 60 percent of the vote.
With the Republicans retaking the White House in 1968, Hansen remained in the nation's capital from 1969 to 1971 after he was appointed the deputy administrator for the Agricultural Stabilization and Conservation Service. He would also serve as vice president of the Department of Agriculture's Commodity Credit Corporation.
Returning to Pocatello, Hansen resumed his work in life insurance and opened a printing and copying company, the Pocatello Copycat, with his wife Connie. He again launched a Senate campaign in 1972, but failed to earn the Republican nomination.
In 1974, Hansen mounted another House campaign against the similarly named but unrelated incumbent Orval Hansen. Orval had filled George's seat after his unsuccessful Senate bid, and had distinguished himself as a popular moderate. Yet in an upset result, George retook the Republican nomination and went on to defeat the Democratic candidate, Max Hanson.
"Stupid but not evil"
Hansen took office under a cloud, having become embroiled in a scandal over his financial disclosures. He admitted that he had engaged in a "freewheeling" campaign and hadn't been especially careful in tracking how money was coming in or being spent. Charged with violating a 1971 law regulating campaign financing, he pleaded guilty on February 19, 1975 to two misdemeanor counts of filing late and incomplete reports, failing to disclose $16,150 in contributions.
The charges initially resulted in a sentence of one year in jail with all but two months suspended, which would make Hansen the first congressman to be put behind bars in 19 years. However, he denied that the omissions on his disclosures were intentional. He attributed them to bookkeeping deficiencies made in error by his staff, and apologized for the trouble that had resulted.
This explanation was enough to persuade Judge George L. Hart Jr., who on April 25, 1975, opted to reconsider the punishment. "I assumed when I sentenced him to jail he was evil," said Hart. "Now, I am not so sure. Stupid, surely." He waived the prison sentence, instead imposing a $40,000 fine on the congressman.
The judge's mercy would have a mixed effect. While his statement was a rephrasing of Hansen's lawyer, who argued that the congressman was "stupid, but he wasn't evil," it was a backhanded compliment that provided easy fodder for Hansen's critics. He would later say that some of his subsequent financial woes were attributed to efforts to rehabilitate his reputation as the "stupid but not evil" moniker stuck.
The conviction prompted calls for Hansen to resign from some Democrats and Republicans in the House, but the Idaho Republican State Central Committee offered a vote of confidence. The committee chairman accused the Justice Department and House Government Operations Committee of "selective reprisal," saying that Hansen was the only person charged out of some 7,000 complaints. He also alleged that Orval Hansen had leveraged the issue for political purposes during the primary season by referring the matter to the Justice Department while he served on the committee.
Second stint in Congress
Hansen went on to win re-election four times. He would distinguish himself by his opposition to most major federal agencies and programs, though his ire was concentrated most strongly against the IRS. He asserted that the agency was planning armed raids in Idaho, and in 1985 would accuse it of singling out taxpayers for audit based on their religious or political affiliations.
Part of this consternation likely stemmed from Hansen's own repeated run-ins with the IRS. He was reportedly late filing his taxes in every year between 1962 and 1975, although this tardiness never resulted in any legal action. In 1980, Hansen published a book entitled To Harass Our People: The IRS and Government Abuse of Power and would claim that a million copies had gone into print.
Hansen also accused the Immigration and Naturalization Service of being involved in a conspiracy to shuttle illegal immigrants across the border and then arrest the farmers who hired them. After a constituent refused to let inspectors from the Occupational Safety and Health Administration enter his electrical contracting business, Hansen launched a nationwide campaign to field complaints against the agency.
Admirers saw Hansen as someone willing to take on big government and fight for the common man, giving him the nickname "George the Dragon Slayer." Detractors suggested that Judge Hart's moniker was more appropriate, portraying Hansen as a buffoon who was more interested in grandstanding than passing meaningful legislation.
Hansen became one of the most vocal critics of the Panama Canal treaties. These agreements, signed by President Jimmy Carter and Panamanian leader Omar Torrijos Herrera at the end of 1977, provided that the American-controlled canal would become a neutral passageway open to all vessels, be jointly administered by the U.S. and Panama, and be transferred to Panamanian ownership in the year 2000.
While Congress debated whether to ratify the treaties, Hansen launched a mail campaign to try to convince American citizens in the Panama Canal Zone to oppose the treaties. He also commissioned a stunt where friends in Idaho loaded up a flatbed truck with two-by-fours made to look like bars of gold and drove it to Washington, D.C. as a visual representation of the money he felt was being squandered through the agreements.
As Hansen calculated, the treaties would forfeit property worth $20 billion, incur $4 billion in transfer costs and $2 billion in contingency costs, and result in an annual expense of $200 million to taxpayers after Panama took control of the canal. A report from the House Committee on Foreign Affairs dedicated an appendix to these figures, asserting that Hansen's estimates were "enormously exaggerated."
The "big American cowboy" abroad
Hansen would spend a considerable amount of time traveling in 1978 and 1979, embarking on quixotic one-man diplomatic trips aimed at improving foreign relations. In January 1978, he traveled to Taiwan and assured the Chinese republic that they would receive the equipment they needed to pursue a nuclear program, despite Carter's opposition to such an effort. In July of that year, he visited President Anastasio Somoza in Nicaragua, praised the country as a "peaceful and pastoral private enterprise nation," and assured Somoza that he had American support; Somoza was overthrown by Sandinista rebels two weeks later.
Hansen's most notable mission came in November 1979, after the U.S. embassy in Tehran was taken over by student militants and dozens of American citizens were held hostage. Flying to Iran in an effort to "build some bridges and open some doors," Hansen was permitted to visit some of the captives on November 24 and reported that they were being held "in relatively comfortable circumstances." He was the first American allowed into the embassy since its fall.
Despite the virulent anti-American sentiment that had developed in Tehran, Hansen reported that he had received a surprisingly warm welcome from the militants. One, impressed by the congressman's height and bravado, dubbed him a "big American cowboy."
While many of Hansen's Republican colleagues in Congress said he was courageous for making the trip, few considered it a wise endeavor. Millicent Fenwick, a Republican from New Jersey, denounced it as "dangerous" and "irresponsible." One Democratic lawmaker described Hansen as "the last guy in the world to send on a diplomatic mission."
The trip also incensed the Carter administration, with White House officials saying it could generate confusion, inhibit official negotiations, and prolong the situation. However, at least some of irritation may have stemmed from the fact that Hansen had managed to gain access to the hostages when the presidential envoy had not been allowed such a visit.
Hansen was unrepentant about the mission, and even threatened to introduce an impeachment resolution against Carter over his handling of the crisis. He made another trip to Tehran a month later, but made little progress in resolving the situation. The hostages would be held for 444 days before their release.
Ethics violation
The foreign travel, made at his own expense, did little to improve Hansen's financial standing. His assets had also been dinged by legal battles and campaigns seeking to defend his reputation. He also voiced a complaint commonly uttered by congressmen: maintaining residences in D.C. and in their home district was too challenging on a representative's salary, which amounted to $57,500 in 1977.
In this year, Hansen asked the Federal Election Commission if he could solicit contributions from his supporters to pay down his personal debts. While the FEC said this would be legal, the House Ethics Committee informed him that it would violate the chamber's rules.
In response, Hansen divided his assets with his wife, who also worked as his office manager. Under this arrangement, Connie would be left with the debts and could ask for contributions. She promptly established the Connie Hansen Fund and pleaded for hundreds of thousands of dollars to pay these liabilities and "save my family from financial disaster."
The syndicated newspaper columnist Jack Anderson mocked the effort, nicknaming the congressman's wife Tin Can Connie. Even supporters of the Hansens offered only tepid support. While a 1979 article reported that Connie had raised over $50,000, the couple still owed some $300,000 to nine banks two years later.
This financial shell game ultimately ran afoul of the 1978 Ethics in Government Act, which had been set up after the Watergate scandal. This legislation sought to improve the transparency of official dealings by requiring major government officials to disclose their financial holdings, transactions, and liabilities. Hansen was indicted in 1983 on four charges of violating the law.
The charges stated that Hansen had failed to disclose a total of $333,978 in personal loans and other transactions. One of the largest unreported loans, for $135,000, had come from three men, including one accused of bank fraud. Other undisclosed loans were made to Connie by billionaire Nelson Bunker Hunt, and Hansen had failed to make note of $87,475 in profits his wife had made on silver investments.
Hansen angrily denounced the charges as "selective and bogus prosecution," again saying he was being targeted due to his "opposition to federal intrusion into all our lives." He claimed that he had simply filled out the form incorrectly and that the issue was being blown out of proportion.
The defense took a similar tack when the matter went to trial, focusing on the Hansens' separation of accounts and saying that the congressman's attorneys had advised him that he didn't have to report the transactions due to the arrangement. They also suggested that the $135,000 loan did not need to be reported because it did not go directly to Hansen but rather to an advocacy group he had formed, the Association of Concerned Taxpayers. Prosecutors countered that Hansen had essentially been using Connie's account as a front to conceal transactions.
In April 1984, Hansen was found guilty on all counts. He was the first congressman convicted under the 1978 ethics law and the first congressman since Thomas J. Lane, nearly three decades earlier, to be convicted on a felony charge. On June 15, he was sentenced to serve between five and 15 months in prison and pay a $40,000 fine.
The House of Representatives also addressed the issue on July 31, taking up the question of whether to reprimand Hansen. This was the mildest form of punishment available, falling short of a censure or expulsion. Those in favor of the action said Hansen's actions to conceal his transactions were intentional, and that a reprimand was necessary to demonstrate that the House would hold its members accountable for wrongdoing. Hansen's supporters backed his contention that he was being singled out, arguing that there were numerous examples of government officials making errors on their disclosure forms and needing to rectify them.
Speaking before the chamber, Hansen brought up several examples of current officials who faced controversy over their financial disclosures, including Democratic vice presidential candidate Geraldine Ferraro, Attorney General William French Smith, and Attorney General-designate Edwin Meese III. At one point, Hansen quipped that he should have robbed a bank since it would have yielded more money and a smaller penalty than the ethics violation. He warned that financial disclosure violations were common enough that other members would "become the victims of a similar nightmare" if the voted to punish him. The final vote was 354-52 in favor of a reprimand.
Despite the conviction, Hansen had won the Republican nomination for his office. He confidently declared that he would win re-election despite the conviction, saying his constituents would "vote for me if I were chained in the Bastille." Yet on Election Day, Hansen was bested by Democratic challenger Richard Stallings, though it was by a margin of just 170 votes out of more than 200,000 cast.
Hansen appealed his conviction, saying that his offenses should have subjected him to a civil penalty rather than a criminal one. This argument gained more traction among his colleagues, with 122 House members lending their support. However, his conviction was unanimous upheld by a three-judge appellate panel on Aug. 30, 1985. The panel, which included future Supreme Court justices Antonin Scalia and Ruth Bader Ginsburg, noted how the financial disclosure forms explicitly said that violators could be subject to either a civil or criminal penalty.
After exhausting further appeals, Hansen began his sentence in June 1986. At one point, he launched a hunger strike in protest of prison conditions, while also claiming that he usually ate as little as possible because he believed his food was tainted with urine and nasal mucus. Connie sought the Republican nomination to challenge Stallings in the 1986 election, but came in second in a five-way contest; Stallings would ultimately retain Hansen's former seat until 1992.
Hansen was paroled after six months, and released shortly before Christmas.
Short-lived freedom
After leaving Congress, Hansen had turned his attention to political lobbying. He became the chairman of the New Continental Congress, a D.C. consulting firm assisting people with complaints against the federal government. After he completed his prison term, he returned to this work.
However, Hansen predicted that his new career would likely send him back behind bars. His parole terms included stipulations that he not travel outside of Virginia without permission, complete monthly financial reports, and not associate with other ex-felons. Hansen complained that these terms would prevent him from running the firm, since he traveled frequently and worked with people who had earned criminal convictions from tax protests. He said the financial reporting requirement would also be impossible, since he received money from people who didn't want their names turned over to the federal government.
Hansen resumed his tax protests and gave speeches around the country. These activities quickly resulted in a charge of violating his parole. On April 15, 1987, he was arrested at the Omaha airport while awaiting a flight back home. Agents brought him back to Virginia in shackles aboard a chartered flight.
The conditions of the arrest won Hansen sympathy from conservatives as well as many liberals, as it was seen as an excessive response to a nonviolent offense. Critics also charged that the chartered jet was a waste of money, since Hansen had already purchased a plane ticket and could have easily been detained at his destination.
Hansen served another six months in prison. At one point, he called a press conference where he dubbed himself a political prisoner, railed against prison bureaucracy, vowed to sue the Attorney General, and denounced prison conditions, suggesting that every judge and congressman should spend some time behind bars to see what it was like. He also used the prison's pay phone to coordinate a campaign demanding presidential pardon.
Check kiting scheme
Beginning in the late 1980s, Hansen began soliciting loans from individuals to support his political advocacy efforts. He was joined in the endeavor by John Scoresby, a business associate and former regional chairman of the Idaho Republican Party. The duo used a business named Ideal Consultants to oversee the transactions.
Individuals were typically promised a high return on investment and told their money would support organizations with names like the Congressional Accountability Project and Free America Revolution. A typical promise held that investors would be repaid within 30 days at an interest rate of 10 to 20 percent, and could earn a finder's fee of 5 to 10 percent for referring Hansen and Scoresby to other people willing to invest. The duo sometimes offered $1,000 to exchange checks.
It was all an elaborate check kiting scheme, where the passing of worthless checks between individuals allowed Hansen and Scoresby to build up false bank balances and establish lines of credit. A federal indictment would charge that it had involved more than 300 checks and drawn about $29 million from five Idaho banks.
On Oct. 31, 1990, Hansen filed for bankruptcy for Ideal Consultants as well as the Pocatello Copycat. By this point, the Ideal Consultants account at the Bank of Commerce in Idaho Falls was overdrawn by $2.1 million. Investors who had been duped by the scheme lost $18 million. On March 24, 1992, Hansen and Scoresby were charged with 49 counts of bank fraud.
Not surprisingly, Hansen again argued that the charges were part of a broad vendetta by federal officials. However, his justifications for the fraud were slim. He argued that he had not actually defrauded any of the investors because they had willingly given him money in support of his anti-government efforts. He also contended that he had been motivated by the financial struggles brought on by his previous troubles, and that he would have been able to repay the money if the operation hadn't been discovered and shut down.
Both Hansen and Scoresby were found guilty of 45 of the counts against them on December 12. Surprisingly, Hansen won considerable support among those he had swindled, bolstering his argument that he hadn't truly victimized anyone. About half of the people who had lost money in the scheme filed affidavits with the court urging leniency.
While prosecutors sought a 16-year prison sentence for Hansen, the affidavits persuaded Judge Edward Lodge to impose a much lighter term. At sentencing on March 16, 1993, he ordered Hansen to spend four years behind bars and pay a $12,500 fine. Scoresby was sentenced to 21 months in prison and a $6,000 fine.
During the sentencing, Lodge marveled at how many people still supported Hansen even after they were duped out of considerable sums of money.
"I've never seen people who are owed hundreds of thousands of dollars, who don't know how much they are owed, who are willing to eat those losses," he declared. "I've never seen that kind of blind allegiance. The victims are offended that the court would take them as victims."
Later life
Hansen appealed the conviction, arguing that the banks had knowingly participated in his transactions and thus were not deceived. The argument was rejected by a federal court in 1994.
While serving this latest prison sentence, Hansen received some good news. He had been continuously fighting his 1984 ethics conviction, and an obscure Supreme Court ruling in 1995 delivered a belated victory on this front. In Hubbard v. U.S., the court ruled that the 1978 ethics law applied only to members of the executive branch. This vacated Hansen's conviction, restored his federal pension, and resulted in the return of the $40,000 fine he had paid.
After 40 months, Hansen was paroled. He made some headlines in 1997, renewing his criticism of the IRS and calling for its abolition in favor of states collecting the income tax and passing it on to the federal government. He maintained that the agency had engaged in retaliatory behavior against him, including launching an audit after he fielded complaints from his constituents about their federal reimbursements following the Teton Dam disaster in 1976.
Hansen also headed the Utah-based US. Citizens Human Rights Commission, which sought an investigation into the death of federal prisoner Kenneth Trentadue in 1995. Trentadue's death was officially ruled a suicide, but there were allegations that he had been mistaken for a suspect in the Oklahoma City bombing and beaten during his interrogation, with the assault either causing his death or instigating his suicide.
Hansen was still struggling financially at this point. He discounted the idea that he would return to politics, in part because of Connie's opposition and in part because he considered politics to be "for the rich."
Shortly after his conviction, Hansen was ordered to repay Ann and James Meyers the $299,350 he had taken as part of the check kiting scheme. A default judgement was ordered against him, but Hansen would claim that he did not remember being served in the civil suit and was unaware of the judgement until 2007. He also said he did not have the money to pay this settlement.
The issue persisted until 2009, when the Idaho Supreme Court ruled that he was still obligated to repay the couple. By this point, the interest collecting on the unpaid debt over 16 years had ballooned the sum to $723,927.
Following cardiac problems, Hansen died in Pocatello on Aug. 14, 2014. His obituary sought the last word in establishing his legacy, declaring him a "dedicated champion in fighting for the good people of Idaho and taxpayers all across the country who were subject to abusive federal agencies" whose efforts resulted in him "being on the receiving end of having to defend his good name against the retribution of federal agencies in which he waged the good fight for his constituents."
Sources
Biographical Directory of the United States Congress, "George V. Hansen 1930-2014" at Legacy.com, "Representative Hansen Pleads Guilty to Violation of Election Campaign Act" in the New York Times on Feb. 20 1975, "Judge Saves Hansen From Jail, Terms Representative 'Stupid'" in the New York Times on Apr. 26 1975, "Rep. Hansen Gets Vote of Confidence From Idaho GOP" in the New York Times on Apr. 28 1975, "Hansen's Tehran Trip Fits His Style" in the Washington Post on Nov. 24 1979, "Unorthodox Idaho Congressman" in the New York Times on Nov. 27 1979, "Rep. Hansen Came Here to Battle and Does - Defending Himself" in the Washington Post on Jan. 4 1983, "George Hansen is Found Guilty in Ethics Trial" in the Washington Post on Apr. 3 1984, "Hansen Gets Prison Term for Ethics Act Violation" in the New York Times on Jun. 16 1984, "Hansen Punished by House" in the Washington Post on Aug. 1 1984, "IRS Uses Religion-Politics to Single Out Audit Candidates, Hansen Says" on UPI on Jan. 29 1985, "Ex-Rep. Hansen's Conviction of Ethics Breaches Upheld" in the Washington Post on Aug. 31 1985, "Boston Tea Party Reenacted to Protest IRS" on UPI on Oct. 2 1985, "Ex-Rep. Hansen to Be Paroled" in the South Florida Sun Sentinel on Dec. 20 1986, "Jailed Former Congressman Continues Hunger Strike Over Treatment" in the Associated Press on Apr. 22 1987, "Hanson Parole Revoked" on UPI on May 12 1987, "Hansen Unchained" in the Washington Post on Dec. 13 1987, "Ex-Idaho Congressman Files for Chapter 11" in Deseret News on Nov. 26 1990, "Congressman Who Left in '85 Accused of Fraud" in the Buffalo News on Mar. 25 1992, "Former Congressman is Found Guilty" in the New York Times on Dec. 13 1992, "Hansen to Serve Four Years in Prison for Check-Kiting" in the Deseret News on Mar. 17 1993, "IRS Hasn't Forsaken Ugly Tactics, Former Idaho Congressman Says" in the Deseret News on Nov. 30 1997, "Free and Fired Up, George Hansen Back in a Scrap, Leading Group Probing Inmate's Death" in the Spokesman-Review on Dec. 7 1997, "Former Congressman George Hansen Loses Idaho Supreme Court Appeal" in the Spokesman-Review on Nov. 30 2009, "An Idaho Political Story Extraordinaire" in the Spokesman-Review on Dec. 1 2009, "Former U.S. Rep Hansen Dies" in the Idaho State Journal on Aug. 15 2014, "'George the Dragon Slayer' Dies at 83" in the Lewiston Tribune on Aug. 16 2014, "Idaho Congressman Sentenced to Federal Prison, Dies at 83" in the Washington Post on Aug. 17 2014, "George Hansen, Idaho Congressman and Convicted Swindler, Dies at 83" in the New York Times on Aug. 20 2014, Congressional Record Vol. 114 Part 1, Panama Canal Implementing Legislation, Joint Report of the Task Force to Investigate Certain Allegations Concerning the Holding of American Hostages by Iran in 1980, United States v. George v. Hansen and John F. Scoresby
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