Today, The Hill reports that Rep. Gary Miller (R-CA) has gone beyond the real estate schemes of his peers. That tired old scheme of buying a property and then earmarking funds for a nearby highway? Miller’s moved beyond it. Not that Miller himself hasn’t done that – it’s just that his real estate prowess extends beyond such simple deals.
Try this on for size:
Rep. Gary Miller (R-Calif.) took out nearly $7.5 million in promissory notes in 2004 from his top campaign contributor and business partner, Lewis Operating Corp., which he used to purchase real estate from the company….
Shaun Martin, a law professor at the University of San Diego who specializes in professional ethics, said Millerâs business arrangement with Lewis âscreams outâ as an abuse and is particularly troubling because the land deals were seller-financed.
âOftentimes, those are particularly ethically troubling and particularly dangerous because oftentimes those loans are non-recourse loans. â¦ The only thing [the lender] can go after is the property itself.â
If the land turns out to be vacant land that for some reason cannot be developed, Martin said, its fair market value could end up being less than the amount of the mortgage.
âIf the property goes south, the elected official doesnât lose money. In essence, he gets to gamble with someone elseâs money â harkening back to the days in which investment banks used to let elected politicians buy stock, and if they lost money the brokerage would make it up for them.â