The FBI is investigating Rep. Gary Miller (R-Diamond Bar) for a series of land transactions in which he avoided paying capital gains taxes after saying he had been forced to sell under eminent domain in Monrovia and Fontana.
The federal investigation was initiated after The Times reported in August that officials in both cities denied that they had acquired Miller's property using eminent domain, which enables governments to buy land for certain purposes even if owners do not want to sell.
After a land sale in Monrovia in 2002 and two subsequent sales in Fontana in 2005 and 2006, Miller claimed an exemption under Internal Revenue Code Section 1033, which grants those forced to sell property through eminent domain at least two years to reinvest the profits without paying capital gains taxes.
Miller's repeated use of the forced-sale exemption has enabled deferment of capital gains taxes through at least 2009.
Dick Singer, a spokesman for Monrovia, said federal agents had interviewed city officials and requested a videotape from a City Council meeting in 2000 cited by The Times in which Miller asked city officials four times to buy his land.
Glen Owens, a Monrovia planning commissioner quoted by The Times, said he was interviewed by two FBI agents in person. "They were asking mostly about the Monrovia deal and what kind of person he was," Owens said.
Since that time, the FBI has interviewed several other current and former city officials from Monrovia and Fontana, officials said.
The FBI declined to comment Tuesday.
Miller's spokesman said he had not been contacted by the FBI. "Congressman Miller is tired of all the rumor and innuendo that has been in the press regarding his past real estate transactions," spokesman Scott Toussaint said in an e-mail to The Times.
The investigation was first reported in Tuesday's San Gabriel Valley Tribune.
Citizens for Ethics and Responsibility in Washington, a nonpartisan government watchdog group, filed a complaint in August after The Times' story was published. The complaint asked the IRS to investigate and alleged that Miller had violated federal law by invoking the eminent domain provision to avoid paying taxes.
"It looks like this is not casual; it seems like quite a concerted effort," said Melanie Sloan, the group's executive director. "Miller has clearly acted illegally. The idea of running into eminent domain three times is absolutely ludicrous."
