State Senator Subpoenaed In Federal Probe Over Tax Break For Aviation Company

Nov. 13, 2012
Change to state law exempted firm from aircraft sales and use tax

Nov. 13--RICHMOND -- It appears a federal inquiry linked to a law that gave a tax break to a Newport News aviation company that later hired a state senator isn't over.

In September, the state Division of Legislative Services was ordered to turn over documents to federal agents investigating the law change granting tax exemptions to the firm.

The demand for documents, sought under a grand jury subpoena and obtained from an open records request, doesn't specifically mention state Sen. John Miller, but every legislative measure it sought records on -- it lists 37 bills filed between 2008 and this year -- was sponsored by Miller.

In February, The Virginian-Pilot revealed the Federal Bureau of Investigation has been asking questions about a 2011 state law change that exempted Orion, a firm also known as Tempus Jets, from the aircraft sales and use state tax.

The company later hired Miller, a Newport News Democrat.

Federal subpoenas had already been served on the clerks of the Virginia Senate and House of Delegates in connection to that investigation.

Miller co-sponsored one of the bills creating the exemption, but he maintains that had nothing to do with his being hired by Orion. A review by The Pilot of correspondence from Miller's Senate email account revealed no discussion of the Orion job.

Miller did not return a message seeking comment Monday. Orion chief executive Scott Terry declined to comment.

Terry previously had said "there is no connection whatsoever between John Miller's employment at our company and the tax legislation."

Terry also noted that he and Miller "never met or had a conversation prior to the early summer of 2011."

The legislation co-sponsored by Miller last year gave an exemption from the aircraft sales and use tax for qualified companies. Eligible firms are defined as those that made at least a $4 million capital investment in Virginia, created at least 50 high-paying jobs in the state, and signed an agreement with the Virginia Economic Development Partnership.

Orion fit that description.

Nearly a year before the aircraft tax bills took effect on July 1, 2011, Orion, then based in Yorktown, said it would invest $4 million to consolidate its operations in Newport News, develop a hangar and office space at the Newport News-Williamsburg International Airport, and create 51 new jobs within 12 months.

Miller joined Orion's staff not long after the new law was on the books.

The bills' prime sponsors were two Republicans: former Del. Glenn Oder of Newport News and Sen. Tommy Norment of James City County.

They, along with Miller, each received relatively modest campaign contributions from Orion in recent years, according to the Virginia Public Access Project.

At present, the scope of the federal investigation remains unclear, though records obtained and interviews conducted keep coming back to Miller.

The latest subpoena doesn't appear to focus on Orion or the tax legislation.

Instead, it seeks legislative records, lobbyist disclosure forms as well as email and other correspondence between lobbyists, lawmakers and state legislative staff regarding the 37 Miller bills listed in the subpoena.

Those bills cover everything from school physical education rules, standardized testing, transportation revenue, even a tax bill for Poquoson, among others.

Contacted Monday, Phil Mann, an FBI spokesman in Norfolk, declined to comment. Likewise, a spokesman for the U.S. Attorney's Office that's involved in the inquiry said that as a policy, the agency does not confirm or deny investigations.

Pilot writer Bill Sizemore contributed to this report.

Julian Walker, 804-697-1564, [email protected]

Copyright 2012 - The Virginian-Pilot