By Fred Ortega and Gary Scott Staff Writers
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 resident 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, R-Brea, 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 innocence 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.
And after 12 long years, 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.
"I didn't do any business deals for 12 years, and every year I was worth less money," he said.
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."
The confluence of business and politics is often problematic, said Bruce Cain, director of the University of California Washington Center.
"The general problem is when you come from a business background and enter politics, and your business begins to suffer because you are not paying as much attention to it anymore," said Cain. "They are not making the six-figure salaries they were making before, and that leads them to do things that are on the edge of the law."
With the focus on ethics in Congress nowadays, that attitude quickly becomes problematic, Cain said.
"They think that they are one-eighth of an inch inside the line, but why be one-eighth of an inch when you can be a mile farther away?"
Miller also insisted that his status as a congressman did not cause any conflicts in the matter of the closing of the Rialto airport.
Miller acknowledges that he met with an official from the city of Rialto and members of Lewis Operating Corp. about how to close the Rialto Airport before promoting a transportation bill that eventually shut down the facility.
In 2004, Rialto officials had signed a contract with Lewis giving the developer the first shot at developing the airport land. City officials have said they hired Lewis in part because of its political connections, since previous efforts to close the airport through the Federal Aviation Administration had failed.
Miller insists that the fact he knew Lewis wanted to build on the airport land did not influence his work on the transportation bill.
"I knew others were talking with Rialto \, KB Homes was talking, others were talking," he said, adding his motivation was only to assist the city of Rialto, which had asked him to help in the airport's closure. He said area representatives Joe Baca, D-San Bernardino, and Jerry Lewis, R-Redlands, were also in favor of the city's efforts to shut down the airport.
In the end, it was language inserted in the bill by Lewis that led to the shuttering of the facility.
Despite all the problems his connections with developers have caused him, Miller insists he will leave Congress either on his own terms, or through the will of the voters.
"I plan on running again," he said. "I am not going to be impugned by the press."
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BS Ranch Perspective:
Looks like Miller is taking the high road in all this I would if I were him too. What Even If I was guilty in a similar situation I would stay with the not so guilty road, hoping that they don't find anything, or any wrong doing. Maybe they will find wrong doing and they will vote to work on the spirit of the law and not the Letter of the law, but I imagine in the spot that this guy is in they would have to act on the letter of the law and not the Spirit of the law, being that he was elected by the people with the people's Trust, to do the right thing, Legally and above board, not act above the law, and do what you want to get what you want to fill your pockets!! Even if you have your own employee's to pay, it isn't that you don't have the money to take the loss that you would have had the land gone the full circle that it would have, if you didn't cook up the emergency sale!!
Never the less, Miller had to have someone that he worked with on the other side that he trusted to make the Emergency sale work or he would find himself in this type of situation acting all cool, calm and collected. Be sides it would almost be the proof of the prosecution that the paperwork that Miller will show them regarding the Emergency sale of the property, are faked or not. We can only wonder. if they are real the above scenario certainly fits, and there is an inside man!!
There has not been a follow up to this story, so I wonder what the outcome of the Investigation was, or maybe there was no Follow up story, becuase the Investigation was not finished, and they are still working through Miller's tax refunds and his tax reports to find where he might have placed the payments for the favors that he has done for the Cities of Fontana and Rialto!
Jan. 14, 2008