IE News: Rep. Miller insists his land deals were done legally

Congressman does regret doing business with campaign contributor
By: Fred Ortega and Gary Scott, Staff Writers - Inland Valley Daily Bulletin

Looking back on the land deals now under review by federal authorities, Rep. Gary Miller maintains he did nothing wrong, but admits he would do one thing differently.

The Diamond Bar Republican said he never should have turned to campaign contributor Lewis Operating Corp. when looking for an investment to shelter the proceeds from a 2002 land sale in Monrovia.

"Was it unethical or inappropriate? No," Miller said. "Am I going to buy things from former campaign donors? No. It is not worth being questioned."

A successful real estate developer before being elected to Congress in 1998, Miller expressed outrage at allegations that he abused his power as a congressman or misused tax laws.
Miller said he is the object of a media campaign to smear him for doing what he has every right to do - make a buck.

In the run-up to the Monrovia land deal, now being looked at by the FBI, Miller said he acted as an anxious businessman trying to protect his investment and his right to develop his property - not as a powerful politician seeking to use his position for monetary gain, as he says he has been portrayed.

"I've been bashed in the press as though I've done something wrong," said Miller, 58. "I can go out and make money like any American, as long as it is above board, ethically and honorably."
But political figures are held to different standards, said Dan Schnur, a Republican consultant. In the court of public opinion, he said, there isn't always a presumption of innocent until proven guilty.

"When a private citizen does something that some may find suspicious, there is a legal process that takes place before people come to a decision," Schnur said. "When you are a public figure, they come to that judgment before the process, not after."

Recounting the 2002 land sale, Miller said he sat on 165 acres of pristine hillside property for 12 long years, waiting as Monrovia officials and citizens tried to figure out whether to let him develop the land or buy it for a wilderness preserve. All the while, he said he watched his investment stagnate.

After that, Miller said he had had enough. At a City Council meeting in February 2000, the congressman pushed back.

"I am sitting next to my attorney, with 300 to 400 people in the room, and he tells me: `Offer to sell them your property. They'll never buy it,' " Miller recalled.

Miller was "damn tired of the process" and was prepared to file suit against the city for inverse condemnation, saying long delays and government regulations had so diminished the value of his property that he was legally entitled to compensation.

To his dismay, Miller said Monrovia's mayor at the time, Lara Larramendi, "a registered Democrat," asked him the unthinkable - donate the land to the city.

"If you don't want me to develop in your city, then buy my property," Miller said.

Two years later, in May 2002, the congressman and the city came to an agreement. The city, using a state grant and local funds, bought Miller's land for $11.8 million, earning him about a $10 million profit.

Last August, the government watchdog group Citizens for Responsibility and Ethics in Washington filed a complaint with the Internal Revenue Service accusing Miller of violating tax laws in the sale, as well as in land deals in Fontana and Rancho Cucamonga.

Federal investigators began poking around Monrovia, asking questions about the 2002 sale. In recent weeks, FBI agents asked Monrovia officials to turn over a video recording of that Feb. 29, 2000, council meeting. The FBI has declined to comment.

In October, Miller decided to ask the House ethics committee to review his dealings in hopes of ending a spate of news reports looking at whether he used his position to take advantage of a special tax provision to shelter profits from the deals.

Miller said he purposefully stayed away from business dealings when he first entered politics, but that concerns about providing for his children and grandchildren led him to dive back into investments again.

Miller is ranked as the 12th wealthiest member of the House by the Center for Responsive Politics, with a net worth of $12 million to $51.7 million.

Miller does not believe he receives special treatment; on the contrary, he says his political position has made negotiations more difficult.

"It has always been to my detriment to be a congressman" in putting deals together, Miller said, because of the higher level of scrutiny.

After the 2002 sale to Monrovia, Miller exercised IRS Code Section 1033 to shelter the proceeds from capital gains taxes. The code requires that the money be reinvested in property within two years. Miller needed to find property fast.

He had to look no further than Fontana, where Lewis Operating Corp., a former business partner and campaign contributor, was readying to sell land to the city there.

"I was looking for deals to buy," Miller said, adding that Lewis "said we have units we are going to sell to the city" of Fontana.

Lewis sold the properties to Miller in 2004. Miller turned around and sold the properties to Fontana in 2005 and 2006 for a small profit.

The deal has raised questions about access and influence, since Lewis Operating Corp. had given Miller a combined $18,100 in campaign contributions between 2003 and 2006.

Miller maintains the transactions were above board, but said he learned a lesson from the media fallout.

"Do I have any other projects with Lewis? No," Miller said. "I'm not interested in any joint ventures."