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FBI Investigating California Rep Miller Over Land Deals January 31, 2007

Posted by notapundit in Congress, US News.
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MONROVIA, Calif. (AP)–The FBI is looking into land deals of Rep. Gary Miller, R-Calif., following reports that he may have improperly used a tax break to avoid paying millions of dollars in taxes on the transactions, according to a report Tuesday.

The inquiry comes after the Los Angeles Times reported last year that Miller sold 165 acres to Monrovia, a suburb about 10 miles east of Los Angeles, in 2002 for a profit of more than $10 million.

Following the sale, he told the Internal Revenue Service and the state he was forced to sell under threat by the city of eminent domain, by which government agencies can force sales in the public interest.

That allowed him to avoid paying capital gains on the sale for two years, during which time he could reinvest the proceeds and avoid taxes altogether.

Miller contended that Monrovia threatened him during the bargaining process with eminent domain, giving him no choice but to sell. City officials disputed that.

The San Gabriel Valley Tribune reported Tuesday that a former Monrovia mayor had been contacted by FBI agents last month about Miller.

“They are just following up on their research based on what they’ve read about the goings-on in Monrovia… about his use of the tax code,” former Mayor Lara Larramendi told the paper.

Monrovia spokesman Dick Singer said federal agents have contacted city officials but wouldn’t comment further. The Tribune reported late Tuesday on its Web site that Monrovia officials had given the FBI a video recording of a 2000 City Council meeting in which Miller asks the city to purchase the 165-acre hillside plot.

In 2004, Miller reinvested the profits from the Monrovia sale, buying lots and a building in Fontana and Rancho Cucamonga. The following year, Miller sold his Fontana land to the city, again claiming the IRS exemption, the Times said.

Ray Bragg, a city redevelopment official, said FBI agents contacted him in recent months to confirm details about Miller’s business dealings with the city reported in the Times.

Miller told the Tribune he was unaware of the probe. He asked the House Ethics Committee last year to review his business transactions amid media reports about them.

“It surprises me,” he said. “I have no idea why they would (be investigating). There has been no impropriety.”

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