Rep. Gary G. Miller (R-CA)

Rep. Gary Miller (R-CA) is a fifth-term member of Congress, representing the 42nd district of California.  His ethics issues stem from his relationship with Lewis Operating Company and the sale of property.  Rep. Miller was included in CREW’s 2006 and 2007 reports on congressional corruption.

Tax Evasion
           
Rep. Miller has invoked Internal Revenue Code (IRC) ' 1033, claiming eminent domain, on three separate real estate sales to the cities of Monrovia, California and Fontana, California since 2002.  In 2002, Rep. Miller sold 165 acres to the city of Monrovia, making a profit of approximately $10 million.  In 2004, Rep. Miller reinvested the proceeds of the sale in land and building purchases in Fontana, California, and Rancho Cucamonga, California.  Rep. Miller again claimed IRC ' 1033 exemption when he sold some of his Fontana land and building acquisitions in April and June of 2005.  He used proceeds from this sale to purchase additional land in Fontana, which he subsequently sold to the city in 2006 for $50,000 more than his original purchase price.   The FBI has opened an investigation into these land deals.  As part of that probe, investigators have obtained a video recording of the February 29, 2000, Monrovia City Council meeting during which Rep. Miller asked the city to purchase his property. 

It appears that Rep. Miller has engaged in three counts of tax evasion by improperly claiming exemptions on capital gains from the sale of real estate that was not due to involuntary conversion through eminent domain proceedings.  The IRS is investigating to determine whether Rep. Miller’s 2002 and 2005 real estate transactions qualified for non-recognition of capital gains. 

Relationship with Lewis Operating

Before he entered Congress, Rep. Miller had a lucrative career as a developer of planned communities.  Rep. Miller has had a long relationship with Lewis Operating Co.  Members of the Lewis family and employees of the company have been Rep. Miller’s top campaign donors, while at the same time, Rep. Miller has been involved in a number of land transactions with Lewis Operating.  In 2005 alone, Rep. Miller made between $1.1 and $6 million off of land deals with Lewis Operating.
                                   
In addition, in 2004, Rep. Miller took out three separate promissory notes from the Lewis Operating group of companies totaling $7.46 million.  Using money obtained through these loans, Rep. Miller bought land from Lewis Investment in “seller-financed” deals, which often result in better deals for the person buying the land.

Rep. Miller has earmarked $1.28 million for street improvements near a planned residential community he co-owns with Lewis Operating and he subverted the FAA’s process by closing the Rialto airport, allowing Lewis Operating to win a contract from Rialto to redevelop the airport property as a planned community.

Rep. Miller appears to have abused his position to financially benefit himself and Lewis Operating in violation of House rules.    

Misuse of Staff Resources

Former aides of Rep. Miller have accused him of other abuses of power, such as requesting his staff to perform personal errands for him, his family and friends, and having them help his children with their schoolwork.  He also enlisted staff assistance in connection with the sale of his property in 2002 to Monrovia, having staffers write letters and help prepare documentation for Rep. Miller’s meetings with city officials regarding the land sale. 

By using congressional staff to engage in campaign activity on official time and with the use of official resources, Rep. Miller may have violated the prohibition on soliciting political contributions from employees, the prohibition on using appropriated funds for campaign activity, House ethics rules and the regulations of the Committee on House Administration.

O.C. Tollway Road

In 2005, Rep. Miller earmarked $8 million for a controversial highway improvement plan that would extend the Foothill South toll road. Since 2000, Rep. Miller has held $20,000 in bonds with the Foothill/Eastern Transportation Corridor Agency, which oversees the tollway expansion. Currently, costs are exceeding income on the tollway.  If this continues, the tollway might default on the bonds, curtailing interest payments and making the bonds like Rep. Miller’s hard to sell.

Members of the House are prohibited from “taking any official actions for the prospect of personal gain for themselves or anyone else.” By using his position to earmark funds for a toll road in which he has purchased bonds, Rep. Miller may have violated this rule.

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