After Hill’s resignation, what happens to her leftover campaign funds?

Katie Hill answers questions from the crowd at the Bridgeport Clubhouse in Valencia. Cory Rubin/The Signal
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The re-election campaign of former 25th Congressional District Rep. Katie Hill was well underway before she resigned from Congress on Nov. 1, after the House Ethics Committee opened an investigation into allegations of an inappropriate relationship with a staffer. 

Her unexpected departure from the race prompted a big financial question for the thousands of supporters who donated more than $1.9 million to her campaign: Where is all that money going now? 

Hill has not yet publicly shared definitive plans on what she’s going to do with her sizable account, but there are options under Federal Election Commission rules. 

On Wednesday, she expressed interest in “supporting young women, LGBTQ people, (and ensuring that) regular people” have a seat in the political system, adding, “One of the things I am exploring is starting a (political action committee) to help these very people run for office and win.” 

Even with several options on how to spend residual funds, a candidate committee can continue to run indefinitely and hold on to contributions for an unlimited time as long as disclosure paperwork is filed correctly, since the Federal Election Campaign Act does not detail how long money can be held. 

“There is a prohibition on using campaign funds for personal expenses,” FEC spokesman Christian Hilland said, adding that unused dollars can only go toward political or charitable purposes.

Most funds tend to return to their original donors, according to FEC officials, but they also can be used to pay for winding-down costs or be saved in case the candidate decides to run in the future. A campaign committee also can contribute up to $2,000 per election on other candidates’ committees, political parties or political action committees.

Hill has repeatedly expressed support for Assemblywoman Christy Smith, D-Santa Clarita, following Smith’s congressional candidacy announcement on Oct. 28, a day after Hill said she would step down. 

Neither has responded to requests for comment on the matter. 

With a boost of more than $600,000 raised in the third quarter, the latest campaign finance figures showed that Hill remained the lead fundraiser, generating more than $1.95 million, according to the Oct. 15 FEC report. Her campaign committee reported $1.54 million in cash on hand with no debt. 

Efforts to create a legally binding time frame for the return of such funds are underway, with the introduction of the “Let it Go Act,” or House Resolution 1308, by Rep. Mark Takano, D-Riverside, earlier this year.

“The Let It Go Act will help uphold that intention by ensuring that the hard-earned dollars Americans donate to campaigns every cycle are not being wasted by a candidate long after their campaign is over,” he said in a statement. “And it will help restore trust that these funds are being used responsibly and not for personal gain.”  

A 2018 report by OpenSecrets.org noted 42 former members of Congress, who resigned or retired before the 2018 midterm elections, had a combined balance of $50 million in campaign funds. 

H.R. 1308 would amend the FECA of 1971, which was amended in 1979 to include rules on leftover money spending, and require candidates to distribute funds after six years from the end of a campaign or tenure in office. 

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