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Judge: Harold Hill doesn't have to tell us how he's spending our money

May 24, 2010

A Polk County judge last week ruled that film producers don't have to disclose how they use their taxpayer subsidies from the Iowa film credits. From The Des Moines Register:

The producers filed the lawsuit in the wake of an open-records request by The Des Moines Register last fall to Iowa's Department of Economic Development. Judge Artis Reis decided the producers would suffer "incalculable" financial harm if the state released budget forms completed by filmmakers that it previously indicated could be kept confidential.

"How can the state of Iowa expect to attract new businesses if the businesses cannot rely on the state's word to keep confidential information which, if released, could harm the businesses?" Reis wrote in her ruling. "Public curiosity cannot override the public interest in continuing economic development for the state."

I have no idea whether the judge got the law right, but she definitely botched the economics. She assumes that there is an actual economic benefit to the state from taking money from you and me and giving it to Hollywood. That's absurd.

As a policy matter, there's no justification for subsidizing private businesses, let alone for doing it with no accountability. The film industry sure hasn't earned the benefit of the doubt. Here's just one example of how much we can trust Hollywood, from the film scandal accountants report:

Organizations were contracted by production companies to provide advertising for the films, often referred to as "sponsorships". In return, the sponsoring organization would generally receive advertising from the production company in the film or on merchandise related to the production. In these situations, no cash was exchanged, but the amount was included as an Iowa qualifying expenditure. In certain productions, we identified this situation multiple times, with some amounts exceeding $1,000,000 for each sponsorship.

A specific production had 4 sponsorships at $1,250,000 each, totaling more than 75% of the total qualifying expenditures. We were able to identify a total of 12 sponsorships exceeding $1,000,000 or more for each sponsorship, all of which were listed as qualifying Iowa expenditures totaling $13,400,000.

Millions of taxpayer dollars to buy lines on the credit roll -- that's the "economic development" that Judge Reis is protecting.

Related: Film Credits: putting Hollywood before your kids.

Tags: Des Moines Register.film accountant report.film credits.harold hill.Lee Rood.

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Comments

Joe - You site "the accountant's report" as evidence. However, "the accountant's report" was not an audit and was directed and edited by former DED Director Mike Tramontina. There were no standard auditing procedures followed for this report and the accountants were not given access to the entire body of information. There was nothing credible in this report as it was only used for political purposes. Did you read the first page of the accountant's report? It is full of disclaimers including the fact they were not give full access to information and a different conclusion could be drawn. The accountant's report was directed by and going to be used by Tramontina to cover his rear. It all raveled out of control when he and Culver got into a fight over the program and Tramontina quit. Citing the accountant's report is not an accurate way to determine what actually happened with this program. The Iowa Auditor's office career professionals are doing a full audit of the program. The conclusions drawn in this report will not be biased nor political and a more accurate picture for you to analyze and critique. Finally, the Iowa Department of Revenue directed the tax accounting procedures for every one of these projects. I hope you will bear these items in mind in your commentary going forward.

Posted by: Jimmy Thompson | May 30, 2010 7:18 PM

Jimmy, I haven't heard of anybody denying the items reported by the Clifton report. Based on the other reports that have come out about the program, there's no reason to doubt it. If that hugely embarrassing report was meant to "protect" Tramontina and Culver, I shudder to think what ugliness will come out in an objective report.

Posted by: Joe Kristan | May 31, 2010 12:54 PM

WELL, THE POST BY JIMMY THOMPSON IS THE MOST REALISTIC PEACE OF NEWS THAT I HAVE READ ABOUT THE FILMS CREDIT SCANDAL. SO FAR.

EVERYTHING IN THE CASE NEGLECTS TO SAY THERE IS $57 MILLION AFFECTED/STOLEN? AND ALL THE MONEY SCAM IS HANGING ON A $55,000 INVOICE OF A THIRD PARTY VENDOR - WHO ACCORDING TO THE INVESTIGATIVE REPORT STATES "TOOK NO MONEY AND TOOK NO CREDITS" - BUT IS NOW THE SCAPEGOAT!

TO MAKE THE GOVERNOR FEEL GOOD THAT HE IS DOING SOMETHING ABOUT THE DEPARTMENTS INCLUDING DEPT OF REVENUE OBVIOUSLY INCOMPETENT. SOMEONE MUST GO TO JAIL!. Hey, how convenient that it is the only black man in all (11) film production COMPANIES THAT THE ATTORNEY GENERAL'S OFFICE IS TRYING TO SEND TO PRISON.

IT SEEMS THAT THAT THE INVESTIGATORS, AUDITORS, STATE OFFICIALS, ATTORNEY GENERAL AND PUBLIC CAN NOT TELL THE DIFFERENCE BETWEEN A "QUOTE" (For doing everything)-$2,500,000 ON A JOB FOR 45 DAYS AND

THE DIFFERENCE 0F A "INVOICE" OF $55,000 FOR 33 DAYS (for doing what was agreed to be done)

How about this? The vendor never had a contract with the State of IOWA! NEVER

applied for tax credits and never met with the Film Credit Department until after the film was over and they were trying to change the program in 2009 -

HOW ABOUT THIS? WHY NOT FOLLOW THE MONEY TRAIL.... TO SOMEONE WHO CAN BENEFIT FROM FILM TAX CREDITS.

IT'S NOT THAT ANYONE CAN GET FILM TAX CREDITS FROM WALMART.

THESE ARE STATE TAX CREDITS - NOT FEDERAL TAX CREDITS.

THAT SOMEONE MUST HAVE ACCESS AND ABILITY TO TURN THE CREDITS INTO TO CASH. HOW ABOUT CHARGING THESE FOLKS.

OR IF YOU USE LOUISANA AS A EXAMPLE - HOW ABOUT CHARGING THOSE IN OFFICE THAT GAVE AWAY THE TAX PAYERS MONEY WITHOUT BEING HELD ACCOUNTABLE.

DOES IT MAKE SINCE, THAT A CAMERAMAN AND THIRD PARTY EQUIPMENT VENDOR IS MADE TO LOOK LIKE A MASTER PLANNER PRODUCER, WHEN HE LOST MONEY AND HIS WORK VAN (BECAUSE IT WAS STOLEN) WHICH WAS NOT ONE OF THE LUXURY CARS THAT WAS PURCHASED FROM TAX FILM MONEY..... BUT WHY ARE THOSE INDIVIDUALS NOT CHARGED WITH FELONY.

CONSIDER THIS? LOOK AT THE CHARGING penalty- WHEELER GETS A 'MISDEMEANOR' AND THE BLACK VENDOR GETS 'CHARGED' WITH FELONY. TALK ABOUT DISPARITY!

THE GENERAL PUBLIC IN IOWA ARE AGAIN BEING CHEATED OF THE TRUTH.

THE REAL CULPRITS ARE GETTING AWAY AND WILL
CHEAT THE STATE OF IOWA AGAIN - WHEN GIVEN THE CHANCE BECAUSE THEY ARE STILL THERE.

WHAT IS REALLY GOING ON?

Posted by: Deborah ALEX-SAUNDERS | June 12, 2010 10:50 PM