Monday, September 21, 2009

Lights, Camera, Corruption

Regular readers know how much I loath corporate welfare of every stripe -- and Hollywood welfare especially. So they'll understand how delighted I am to pass along news of a mini-scandal hitting Iowa's film "incentives" program.

An 11th-hour orgy of tax credit claims, timed to beat a rules change that capped the handouts at (a mere) $50 million annually, drove program costs well above the $300 million mark last year, according to media reports -- even while an ongoing audit indicates the program is being abused. It appears that some tax credits were used to purchase at least two luxury vehicles, a Mercedes and Land Rover, unrelated to film projects. This led to last Friday's resignation of the state's economic development director, and paid leave for the man who hands out the checks to fat cat filmmakers.

Reports the DesMoines Register:

"On Friday, questions about the state's film program led state economic development leader Mike Tramontina to resign. The state's film manager, Tom Wheeler, has been placed on paid administrative leave.

A memo, written by Tramontina, said an independent auditor found lax oversight of film producers' spending in Iowa. The state gives producers back half of what they spend in Iowa in tax credits. Among the complaints: Film producers claimed tax credits for luxury vehicles they bought for themselves."

It's extremely concerning," said [State Sen. Joe] Bolkcom. "We have this program that grew extremely fast, on top of what seems to be an appalling level of oversight."

Gov. Chet Culver suspended the tax-credit program Friday, saying in a statement that he was troubled by the findings. Culver spokesman Troy Price said Saturday that the audit is ongoing and could not be released."

Here's a link to the memo that prompted Culver to suspend the program.

Given the way Iowa and other star-struck states have been throwing money at moviemakers, trying to land more location shoots, it was only a matter of time before such abuses began to surface. Maybe this will help take some of the shine off the latest craze in corporate welfare.

See earlier posts for more on this topic: here, here,

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