FORT WAYNE, Ind. (AP) — The state Democratic Party is accusing Republican U.S. Rep. Mark Souder of inappropriately seeking a $1 million federal grant for a project involving a company in which he owned stock, a charge the congressman denies.

Indiana Democratic Party spokeswoman Lauren Smith pointed out that Souder, who bought stock in Warsaw-based medical device maker Biomet in 2003, announced that he had secured the grant that Biomet and two other orthopedic companies would share with three Indiana universities and then sold the stock last year.

Smith said in a statement that such activity was later made illegal. Smith told The Journal Gazette it was a "blatant abuse of earmarks" because "his stocks stood to increase if this company is doing better."

In a statement issued Wednesday night, Souder said the claims were false and based upon a "false premise."

"The Democrats have peddled an erroneous story that suggests that, because I once owned $2,000 dollars of Biomet stock, this earmark request, although legal, was of special gain to me," Souder said in the statement.

Souder said the request connected with a program to help injured soldiers recover after surgery was made not for a specific company, but for "the cluster of orthopedic employers."

A Souder news release from Sept. 26, 2006 touting the $1 million grant archived on the congressman's Web site said the money was for "a partnership consisting of three Warsaw-based orthopedic companies — Zimmer, Biomet and DePuy — as well as for the Walter Reed Army Medical Center and three Indiana universities."

The same release said Souder had secured $1.3 million the previous year for the same partnership. In his new statement, Souder said the funding is important to the orthopedic companies and to developing a research relationship with state universities.

Souder said the University of Notre Dame, which initiated the request, ended up choosing to work with Zimmer Holdings Inc.

Notre Dame spokesman Dennis Brown said he was unable to comment Wednesday night because the principals involved in the project were unavailable.

Souder told The Journal Gazette he bought Biomet shares because he wanted to put some money in local businesses.

Souder spokeswoman Mindi Wood said Souder paid $36.99 for 54 shares of Biomet in 2003. That would bring the total value at that time to just under $2,000. Biomet was bought by a private-equity consortium a year ago, and shareholders were paid $46 a share. The sale would have yielded Souder $2,484.

Souder told The Journal Gazette that if he had not been forced to sell the stock because of the acquisition, he would have held on to it.