Tax Update Blog: Permalink

« Previous · Tax Update Blog Home · Next »

Film credit fraud tipped off by several weeks? More like a year

February 23, 2010

In the weeks leading up to the blow-up of Iowa's film tax credit program last fall, officials were scrambling to deal with "in-kind" expenses -- pretend expenses -- that were being used to qualify for tax credits that could be sold for cash. The Des Moines Register over the weekend teased this out of e-mails that were flying around the Deparment of Economic Development last summer and fall.

But if the Attorney General's documents accompanying the indictment of former Film Office head Tom Wheeler are correct, this issue was placed squarely before the Department of Revenue 10 months before the scandal blew up -- and someone at the Department had apparently blessed the practice. Mark Schuling, Department Director, says that the issue never reached him:

Department of Revenue chief Mark Schuling said this week that he had no idea Runge had sought credits for free or deferred expenses. He said he would not have approved them if he had known.

"The statute is pretty clear," he said. "Unless there's been an expenditure, it wouldn't qualify for the tax credit."

The attorney general's complaint doesn't say which IDOR official green-lighted tax credits for pretend expenditures. Mr. Wheeler's trial may give an interesting glimpse at Iowa's tax policy machinery.

Meanwhile, three more state officials have left their jobs in the wake of this weekend's Des Moines Register report, reports Charlotte Eby:

Those employees are Jeff Rossate, division administrator for business development, Amy Johnson, division coordinator for business development and the department’s general counsel, Melanie Johnson. Amy Johnson had been named interim manager of the beleaguered Iowa Film Office in September.

While a state flack won't say whether they were fired, it's pretty likely that they didn't suddenly all decide to quit and open a sushi bar together. Considering that these e-mails had to have been available to the Governor's office before the Register got them, it's very odd that they only got let go once the e-mails got out. It looks as though the Governor's office is still flailing in dealing with the film office scandal -- reacting to news stories rather than investigating and getting in front of events.

Film Fiasco: where was the Department of Revenue?

If this is a crime, they won't be able to build enough jails

Details, schmetials. We're here to give money away!