U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

99–006 

" ! HOUSE OF REPRESENTATIVES 

112TH CONGRESS

1st Session 

REPORT

2011

112–194 

House Calendar No. 68 

IN THE MATTER OF ALLEGATIONS 

RELATING TO GREGORY HILL 

R E P O R T 

OF THE

COMMITTEE ON ETHICS 

AUGUST 5, 2011.—Referred to the House Calendar and ordered to be 

printed 


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(II) 

COMMITTEE ON ETHICS 

JO BONNER, Alabama 

Chairman 

MICHAEL T. MCCAUL, Texas* 

K. MICHAEL CONAWAY, Texas 

CHARLES W. DENT, Pennsylvania 

GREGG HARPER, Mississippi 

LINDA T. SA

 ́

NCHEZ, California 

Ranking Member 

JOHN A. YARMUTH, Kentucky 

DONNA F. EDWARDS, Maryland 

PEDRO R. PIERLUISI, Puerto Rico 

JOE COURTNEY, Connecticut 

REPORT STAFF

DANIEL A. SCHWAGER, Chief Counsel/Staff Director 

DEBORAH SUE MAYER, Director of Investigations 

KELLE A. STRICKLAND, Counsel to the Chairman 

DANIEL J. TAYLOR, Counsel to the Ranking Member 

CLIFFORD C. STODDARD, JR., Senior Counsel 

PATRICK M. MCMULLEN, Counsel 

* Representative Michael McCaul requested that he not participate in the Committee’s proceedings in this matter, as Gregory Hill is Chief of Staff to Representative McCaul. 


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LETTER OF TRANSMITTAL 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ETHICS,÷ 

Washington, DC, August 5, 2011. 

Hon. KAREN L. HAAS, 

Clerk, House of Representatives, 

Washington, DC. 

DEAR MS. HAAS: Pursuant to clauses 3(a)(2) and 3(b) of rule XI 

of the Rules of the House of Representatives, we herewith transmit 

the attached Report, ‘‘In the Matter Regarding Allegations Related 

to Gregory Hill.’’ 

Sincerely, 

JO BONNER, 

Chairman. 

LINDA T. SA

 ́

NCHEZ, 

Ranking Member. 


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C O N T E N T S 

Page 

I. Introduction .......................................................................................................... 1 

II. House Rules, Laws, Regulations, or Other Standards of Conduct ................. 2 

III. Background ........................................................................................................ 3 

IV. Findings and Conclusions ................................................................................. 5 

V. Statement Under Rule 13, Clause 3(c) of the Rules of the House of 

Representatives .................................................................................................... 6 

Appendix A: Report and Findings of the Office of Congressional Ethics Regarding Gregory Hill (Review No. 11–7238) ...................................................... 7 

Appendix B: Gregory Hill’s Response to the Report and Findings of the 

Office of Congressional Ethics ............................................................................. 41 

Appendix C: Tax Documents Provided to the Committee by Campaign Financial Services .......................................................................................................... 53 


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1OCE’s Report and Findings regarding Gregory Hill, Review 11–7238, can be found at Appendix A. 2 Representative Michael McCaul requested that he not participate in the Committee’s proceedings in this matter, as Gregory Hill is Chief of Staff to Representative McCaul. 3Gregory Hill’s response to OCE’s allegations against him in OCE’s Report and Findings can 

be found at Appendix B. 4 House Rule XI, clause 3(b)(8)(A), and Committee Rule 17A(c)(1). 

112TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 112–194 

IN THE MATTER REGARDING ALLEGATIONS RELATING 

TO REPRESENTATIVE GREGORY HILL 

AUGUST 5, 2011 

Mr. BONNER, from the Committee on Ethics, 

submitted the following 

R E P O R T 

I. INTRODUCTION 

On May 18, 2011, the Office of Congressional Ethics (OCE) for- warded to the Committee on Ethics (Committee) a Report and 

Findings related to the receipt of outside income in 2009 by Gregory Hill, in excess of the outside earned income limit applicable to 

senior staff, and Mr. Hill’s failure to properly report the actual 

amount of outside income received on his 2009 Financial Disclosure 

Statement.1 OCE recommended that the Committee further review 

the matter.2

On May 23, 2011, the Committee provided Mr. Hill, through his attorney, a copy of OCE’s Report and Findings and offered him the 

opportunity to respond to OCE’s allegations. Mr. Hill submitted a 

response through his attorney on June 6, 2011.3

The Committee initiated an inquiry into the matter referred by OCE pursuant to Committee Rule 18(a). On July 1, 2011, the 

Chairman and Ranking Member of the Committee issued a statement announcing they had jointly decided to extend the Committee’s consideration of OCE’s transmittal regarding Mr. Hill for an 

additional 45-day period.4

However, the Committee finds that Mr. Hill’s receipt of the 

$32,000 and his failure to report the actual amount on his 2009 Financial Disclosure Statement was not intentional and was more 

likely based on confusing information provided to him by Campaign 

Financial Services (CFS), the entity that manages the account for 


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5 5 U.S.C. app. 4 § 101(d). 

6 5 U.S.C. app. 4 § 102(a). 

7 5 U.S.C. app. 4 § 104. 

the campaign. The Committee concludes that since Mr. Hill repaid 

the excess amount, no further action is necessary. Accordingly, the 

Committee hereby closes its inquiry and the OCE referral in the 

above-captioned matter. 

This Report resolves the matter forwarded by OCE. The Committee has unanimously determined that the evidence presently before the Committee supports a determination that Mr. Hill received 

outside income in 2009 that exceeded the outside earned income 

limit. Thus, the Committee has decided that it will not dismiss the 

OCE referral. Moreover, Mr. Hill repaid the excess amount upon 

learning that the payment in question was not a clerical error and 

that he had, in fact, received income above the outside earned income limit. Since Mr. Hill has already repaid the excess amount, 

making the total received for 2009 below the limit, the Committee 

has determined that no further action is necessary. Additionally, 

while Mr. Hill did not report the actual income he received in 2009 

on his Financial Disclosure Statement for 2009, the Committee 

finds that the information he relied upon to complete his Financial 

Disclosure Statement was incorrect without his knowledge. Since 

he subsequently repaid the excess amount, the outside earned income amount reported on his Financial Disclosure Statement for 

2009 is accurate. Therefore, the Committee finds that no further 

action is necessary regarding Mr. Hill’s Financial Disclosure Statement for 2009. 

II. HOUSE RULES, LAWS, REGULATIONS AND OTHER 

STANDARDS OF CONDUCT 

House Rule 26, clause 2 

‘‘[T]he provisions of title I of the Ethics in Government Act of 

1978 shall be considered Rules of the House as they pertain to 

Members, Delegates, the Resident Commissioner, officers, and employees of the House.’’ 

Ethics in Government Act 

‘‘Any individual who is an officer or employee described in subsection (f) during any calendar year and performs the duties of his 

position or office for a period in excess of sixty days in that calendar year shall file on or before May 15 of the succeeding year a 

report containing the information described in section 102(a).’’ 5

‘‘Each report filed pursuant to section 101 (d) and (e) shall include a full and complete statement with respect to . . . [t]he 

source, type, and amount or value of income (other than income referred to in subparagraph (B)) from any source (other than from 

current employment by the United States Government). . . .’’ 6

‘‘The head of each agency . . . each congressional ethics committee, or the Judicial Conference, as the case may be, shall refer 

to the Attorney General the name of any individual which such official or committee has reasonable cause to believe has willfully 

failed to file a report or has willfully falsified or willfully failed to 

file information required to be reported. . . .’’ 7


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8 5 U.S.C. app. 4 § 501(a)(1). 

9Memorandum from Committee on Standards of Official Conduct for All Members, Officers, 

and Employees, dated February 12, 2009 (emphasis in original). 10See Appendix A at 1. 11 Id. 12 Id. 13 Id. 14 Id. 15The ‘‘senior staff’’ rate for 2009 was $117,787. See House Rule 25, clause 1(a)(1), 5 U.S.C. 

app. 4 § 501(a)(1). 

‘‘[A] Member or an officer or employee who is a noncareer officer 

or employee and who occupies a position . . . for which the rate of 

basic pay is equal to or greater than 120 percent of the minimum 

rate of basic pay payable for GS–15 of the General Schedule, may 

not in any calendar year have outside earned income attributable 

to such calendar year which exceeds 15 percent of the annual rate 

of basic pay for level II of the Executive Schedule under section 

5313 of title 5, United States Code, as of January 1 of such calendar year.’’ 8

‘‘[T]he outside earned income limit for Members and senior staff 

for calendar year 2009 is $26,550.’’ 9

House Rule 25, clause 1(a)(1) 

‘‘Except as provided by paragraph (b), a Member, Delegate, Resident Commissioner, officer, or employee of the House may not— 

(1) have outside earned income attributable to a calendar 

year that exceeds 15 percent of the annual rate of basic 

pay for level II of the Executive Schedule under section 

5313 of title 5, United States Code, as of January 1 of that 

calendar year.’’ 

III. BACKGROUND 

On May 18, 2011, OCE referred to the Committee a matter involving Mr. Gregory Hill, Chief of Staff to Representative Michael 

McCaul. In its referral, OCE determined that there was ‘‘substantial reason to believe that in 2009, Greg Hill received more than 

$26,550 of earned outside income from McCaul for Congress. . . .’’ 10 OCE further determined that Mr. Hill was considered ‘‘senior staff’’ in 2009 and was therefore subject to the outside 

earned income limit of $26,550.11 According to OCE’s Report and 

Findings, Mr. Hill received compensation in 2009 from McCaul for 

Congress, Representative McCaul’s campaign committee, totaling 

$32,000, and thereby exceeded the outside earned income limit by 

$5,450.12 OCE also determined that Mr. Hill reported $26,500 of 

outside earned income on his calendar year 2009 Financial Disclosure Statement.13 OCE reported that Mr. Hill paid back $4,831.45 

to the campaign in February 2011, which equaled the $5,450 less 

the taxes that were withheld by CFS, the entity that manages the 

account for the campaign.14 Those withholdings were separately recouped by CFS from the IRS, and so did not accrue to the benefit 

of Mr. Hill. 

Consistent with OCE’s Findings, Committee staff determined 

that during 2009 Mr. Hill was paid at or above the senior staff 

rate15 and was therefore subject to the $26,500 limit on outside 


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16Memorandum from Committee on Standards of Official Conduct for All Members, Officers, 

and Employees, dated February 12, 2009, which can be found at Appendix A, Exhibit 1. 17See Appendix A. 18See Appendix B. 19See Appendix C. 

earned income.16 Mr. Hill received outside income for his work on 

the McCaul for Congress campaign, which was paid on a monthly 

basis and included a bonus. The total actually received by Mr. Hill 

during 2009 amounted to $35,000 ($3,000 of which was reported as 

paid by the campaign in December 2008). According to OCE’s Findings,17 the response provided by Mr. Hill to the Committee,18 and 

an interview of Mr. Hill by Committee counsel, the Committee has 

determined that while he actually received $35,000 from the campaign during 2009, he was provided with conflicting information 

from the campaign as to the total amount received. This caused 

Mr. Hill to believe that the $32,000 amount reported on the first 

W–2 he received for 2009 was a clerical error and that he actually 

only received $26,500. This conclusion was based upon his receipt 

of an email from CFS, which indicated they were issuing a corrected W–2 for 2009 that showed his income for 2009 was actually 

$26,500 and not $32,000, which had been previously reported. In 

additional communications with CFS, Mr. Hill sought verification 

of the amount paid in 2009. CFS confirmed that Mr. Hill was only 

paid $26,500 in 2009. Furthermore, CFS told Mr. Hill that they 

thought the excess amount had already been debited from Mr. 

Hill’s account. 

CFS provided documentation to the Committee including a letter 

and accompanying IRS forms sent by PayChex, the company that 

handled the payments for Mr. Hill, among others, for the campaign. The letter was a request to the IRS to correct the income 

and withholding paid on behalf of Mr. Hill for 2009. The letter was 

sent on May 4, 2010, which is consistent with the information provided to the Committee by Mr. Hill. The campaign received a refund from the IRS on September 28, 2010, for the excess withholding for income taxes, Social Security and Medicare. Counsel 

from CFS also indicated that CFS believed that Mr. Hill’s account 

was debited for the excess payment around the same time it requested a refund from IRS.19

Mr. Hill told Committee counsel that in 2010 he was not aware 

of the dollar amount of the outside earned income limit for 2009. 

He stated that he had previously instructed the campaign not to 

exceed the outside earned income limit. When he received the W– 

2 indicating he had been paid $32,000 in 2009, he believed that 

was the limit based on his earlier instructions. He filed his tax return for 2009 using the $32,000 amount. 

In the spring of 2010, Mr. Hill received a letter from the IRS indicating there was a conflict between his tax return for 2008 and 

a W–2 the IRS received from the campaign. Mr. Hill contacted CFS 

and learned they had sent a corrected W–2 for 2008 indicating his 

income from the campaign was $25,830 for 2008 and not the 

$22,830 he reported on his return. This caused Mr. Hill to question 

CFS about what he had received in 2009. He also contacted the 

Committee to find out what the outside earned income limit was 

for 2009. He learned that the limit was $26,550 and provided that 

information to CFS. CFS advised him they were sending a corVerDate Mar 15 2010 07:21 Aug 09, 2011 Jkt 099006 PO 00000 Frm 00010 Fmt 6659 Sfmt 6602 E:\HR\OC\HR194.XXX HR194

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20OCE interviewed a financial manager from CFS who had a different recollection than Mr. 

Hill. The financial manager recalled that Mr. Hill asked for the repayment amount in the spring 

of 2010 instead of the winter of 2011. However, the financial manager believed that CFS had 

debited the overpayment from Mr. Hill and therefore issued him a corrected W–2. The effect, 

however, is the same as Mr. Hill’s somewhat contrary recollection; i.e., that Mr. Hill believed, 

based on a corrected W–2, that he had only actually received $26,500 at the time of his financial 

disclosure filing. 21See Appendix A, Exhibit 6. 

rected W–2 indicating the total income from the campaign for 2009 

was $26,500. Mr. Hill believed, based on the corrected W–2, that 

he had only received $26,500 for 2009. Mr. Hill told Committee 

counsel that he had several communications with CFS seeking 

verification that his income for 2009 was only $26,500 and each 

time CFS verified the amount. 

In January 2011, after Mr. Hill was notified by OCE that they were examining his 2009 income from the campaign, he contacted 

CFS to again verify his income. At that time, CFS told him that 

he had actually received $32,000 but CFS believed that the overpayment was debited from his account in 2010, and then realized 

in 2011 that they were also mistaken. Mr. Hill asked CFS to provide him the amount he needed to repay to ensure that his 2009 

income was below the $26,550 limit.20 CFS told Mr. Hill that he 

had to repay $4,831.45, which was the total overpayment minus 

the taxes that were withheld. Mr. Hill sent CFS a cashier’s check 

for the $4,831.45 amount in February 2011.21

IV. FINDINGS AND CONCLUSIONS 

As a result of its review of OCE’s Report and Findings, and addi- tional investigative activity by the Committee, the Committee has 

reached the following findings and conclusions. 1. In 2009, Gregory Hill was paid at or above the ‘‘senior staff’’ rate for his work as Representative McCaul’s Chief of Staff and 

was therefore subject to the outside earned income limit of $26,550. 2. During 2009, Mr. Hill received payments from McCaul for Congress totaling $35,000, $3,000 of which was reported as paid by 

the campaign in December 2008, but not received until 2009. 

3. CFS, the campaign account manager for McCaul for Congress, 

advised Mr. Hill that the W–2 it had issued indicating that Mr. 

Hill’s total income from McCaul for Congress in 2009 was $32,000, 

was in error, and they were issuing a corrected W–2 showing the 

total income as $26,500. 

4. Based on the information provided by CFS and the corrected 

W–2, Mr. Hill reported $26,500 in outside income on his Financial 

Disclosure Statement for 2009. 

5. In February 2011, after learning that he was actually paid 

$32,000, Mr. Hill instructed CFS to determine what amount he 

needed to repay the campaign to ensure his total income did not 

exceed the outside earned income limit. Upon being told the 

amount he needed to repay, Mr. Hill sent the campaign a check. 

Mr. Hill actually received $35,000 in outside earned income from 

McCaul for Congress in 2009 ($3,000 of which was reported as 

2008 income and therefore not considered as income for 2009). 

Upon being given a reason to double-check the limit, he was led to 

believe that the W–2 amount was in error for 2009, as it had been 

for 2008. Mr. Hill did not realize he had exceeded the outside 

earned income limit or actually received an amount over $26,500, 


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22See House Rule XI, clauses 3(a)(2) and 3(b). 

based on assertions made by CFS. Upon learning of the amount actually received, he took steps to repay the excess amount. Based on 

the evidence and testimony, the Committee finds that Mr. Hill’s receipt of the $32,000 and his failure to report the actual amount on 

his 2009 Financial Disclosure Statement was not intentional and 

was more likely based on confusing information provided to him by 

CFS. 

This Report resolves the matter forwarded by OCE. The Committee has unanimously determined that the evidence presently before the Committee supports a determination that Mr. Hill received 

outside earned income in 2009 that exceeded the outside earned income limit. Thus, the Committee has decided that it will not dismiss the OCE referral. However, the Committee concludes that 

since Mr. Hill repaid the excess amount, no further action is necessary. Therefore, the Committee determines that this matter is 

closed. 

The Chair is directed, upon providing the notices required pursu- ant to House Rule XI, clause 3(b)(8)(A), and Committee Rule 

17A(b)(2), to file this Report with the House, together with copies 

of OCE’s Report and Findings in this matter, along with any response filed, all of which are made a part of this Report and appended hereto.22 The filing of this Report, along with its publication on the Committee’s Web site, shall serve as publication of 

OCE’s Report and Findings in this matter, pursuant to House Rule 

XI, clause 3(b)(8)(A), and Committee Rule 17A(b)(3) and 17A(c)(2). 

V. STATEMENT UNDER RULE 13, CLAUSE 3(c) OF THE 

RULES OF THE HOUSE OF REPRESENTATIVES 

The Committee made no special oversight findings in this Report. 

No budget statement is submitted. No funding is authorized by any 

measure in this Report. 


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