June 20, 2001

Dear Representative Hilliard:

By this letter, the Committee on Standards of Official Conduct formally and publicly reproves you for violations of the Code of Official Conduct of the House of Representatives.

Your conduct in violation of the Code of Official Conduct is described in detail in the Statement of Alleged Violation adopted by the Investigative Subcommittee and in the Report of the Investigative Subcommittee. You have admitted to the Statement of Alleged Violation, and to the factual allegations therein, under penalty of perjury.

The conduct for which you are hereby sanctioned is summarized below:

1. During the period April 1993 to March 1994, you engaged in a pattern and practice of conduct whereby, at your authorization and instruction, the Hilliard for Congress Campaign (hereafter "HFCC"), the political committee authorized by you to receive contributions or make expenditures on your behalf, made loans totaling more than $16,000 to three individuals for purposes not attributable to any bona fide campaign or political purpose.
2. During the period July 1992 to August 1996, you engaged in a pattern and practice of conduct whereby, with your knowledge, HFCC made expenditures to three individuals for salary and benefits for performing services for corporations owned or controlled by you and members of your family. In this manner, you converted campaign funds to personal use in excess of reimbursement for legitimate campaign expenditures and expended campaign funds for a purpose not attributable to bona fide campaign or political purposes.
3. During the period 1993 through 1996, you engaged in a pattern and practice of conduct in which HFCC funds were converted to personal use by you in excess of reimbursement for legitimate and verifiable campaign expenditures and expended by you for purposes not attributable to bona fide campaign or political purposes. Your pattern and practice of conduct included (a) causing HFCC to make expenditures totaling $8,000 to pay rent owed pursuant to a lease you guaranteed for a corporation owned in substantial part by you and members of your family; (b) causing HFCC to make expenditures for rent substantially in excess of fair market value to a Section 501(c)(3) corporation operated and controlled by members of your family, which in turn transmitted these funds rent expenditures to a corporation owned and controlled by you and members of your family; (c) causing HFCC to make expenditures for rent substantially in excess of fair market value directly to corporations owned or controlled by you and members of your family; and (d) causing HFCC to make expenditures to pay utility expenses incurred by corporations owned or controlled by you and members of your family.

With respect to each pattern and practice of conduct separately described above, you violated Clause 6 of the Code of Official Conduct, former Rule 43 (current Rule 23) of the House of Representatives, which provided, in pertinent part, that a "Member shall convert no campaign funds to personal use in excess of reimbursement for legitimate and verifiable campaign expenditures and shall expend no funds from the campaign account not attributable to bona fide campaign or political purposes." With respect to each pattern and practice of conduct separately described above, you also violated Clause 1 of the Code of Official Conduct, former Rule 43 (current Rule 23) of the House of Representatives, which provided that "[a] Member, officer or employee of the House of Representatives shall conduct himself at all times in a manner which shall reflect creditably on the House of Representatives."

In knowing violation of the Code of Official Conduct, you expended funds from your campaign account for purposes not attributable to bona fide campaign or political purposes and you converted campaign contributions to personal use. Your improper use and conversion of campaign funds were accomplished through several distinct means and over a period of years. Through this extended conduct, monies contributed to your campaign for your campaign were, instead, put by you to your personal use and benefit and to the use and benefit of members of your family.

You engaged in serious official misconduct that brought discredit to the House of Representatives. The Investigative Subcommittee and the full Committee duly considered that misconduct. The Members of both bodies determined that you should be publicly sanctioned. Your willingness, ultimately, to admit to the misconduct set forth in the Statement of Alleged Violation, summarized above, and to enter into a settlement of this matter was significant in the Committee’s determination to accept the recommendation of the Investigative Subcommittee and sanction you through a Letter or Reproval. We emphasize that a Letter of Reproval is a formal sanction intended to be a rebuke of a Member’s conduct issued by a body of that Member’s peers acting, as the Committee on Standards of Official Conduct, on behalf of the House of Representatives.

Sincerely,

cc: Ralph L. Lotkin, Esq.