Another Monday at the Tom Wheeler Trial or "Tom Goes to Wonderland"

I used my day off again to attend the Tom Wheeler trial. This time I went for the whole day. In the morning I went with Jay Villwock and for the afternoon portion I went by myself.

A lot of what was revealed in today's session was very capably reported by KCCI-TV on their website in this story:

Film Office Director Talks Experience, Budgets, More
http://www.kcci.com/news/28961656/detail.html

There is a very good video clip included that give a good sense of the sort of support that Tom was receiving from the head of the Iowa Department of Economic Development, Mike Tramontina. (Gene Hamilton posted the text of it in the previous post below.)

I will attempt to fill in things I saw that didn't get reported.

When I arrived the first witness for the defense was just finishing up. She was part of Dennis Brouse's Changing Horses Productions from what I could gather but I didn't catch any of her testimony.

The next witness on the stand was Kristina Swanson who had worked for producer Bruce Elgin primarily as a Unit Production Manager. I saw her many times when I worked on the film "Splatter". The prosecution asked about the use of "deal memos" and she said that the use of those is pretty standard. He asked her about her salaries for "The Offering" and "Splatter" and again didn't unearth anything out of the ordinary. I suppose he was hoping that the salaries would be uncommonly high for what the fair market rate would be. She said, if anything, they were on the low side. He confronted her with the fact that the state credited the amount of $77,000 while her actual pay was $28,000. She responded that she was surprised and saddened by this. All in all it was great testimony - for Bruce Elgin's trial. However, since it was instead Tom Wheeler's trial it was a "dollar short and a day late". (When is the prosecution going to realize whose trial it is?)

Then it was James Watson, the Council Bluffs CPA who worked for Wendy Runge during the production of "The Scientist". All I got from the testimony (I was pretty tired so I may have missed something) was that there had been no direct communication with Tom Wheeler. All of the communication had been via email to Tom and to Jim McNulty about how the Film Credits worked.

Finally Tom Wheeler took the stand. Defense attorney, Angela Campbell began by making it clear to Tom that he wasn't required to take the stand and by doing so he could be cross-examined by the prosecution. Wheeler made it clear that he was aware of that and that he didn't have anything to hide.

Questioning began with questions about his background. I found out (there's more detail in that KCCI news story linked to above, by the way) that he grew up in Norwalk, and started off when he went to college trying to learn Engineering but found he wasn't up to that so switched to a liberal arts education finally having a double major in Sociology and Religion. He took a graduate level creative writing class and participated in a fellow student's independent film as an actor. Upon graduating he moved to the southwest and was able to get a Production Assistant job at Fox Animation, 20th Century Fox's feature animation unit. He was able to move up some and ended up in the Editorial Department as a Departmental Assistant reading soundtracks and doing a few other miscellaneous duties. He lost that job when the division was closed. He moved to San Francisco with many of the other people who had worked there and tried to get work with some of the other studios such as Pixar and Warner Brothers but was unable to break in. He was able to get some work from an event company but ultimately couldn't afford to live in the expensive bay area. He ended up packing up and moving back to Iowa. After a few small jobs (motorcycle shop, landscaping, photo department at Walgreens) he found out about the job at the Iowa Film Office being available and got it. It was a substantial increase in pay.

What got established then was what the job was when he started and how it changed once the film incentive bill was passed. The job described to him was a marketing and customer service job which he was able to do. There was no orientation given to him. The closest to training he was given was the employee handbook. In it he found about the prohibition of state employees receiving gifts and he abided by it, even if it did create some awkward moments. The only other information he got was from previous Film Office manager, Steve Schott and what his immediate supervisor could provide. He was basically on his own for most of learning what the job entailed.

His responsibilities involved maintaining the Production Guide, answering questions via phone and email from film people and the general public, putting productions in contact with relevant Iowa people, and working on a location database. When he started major feature productions came to Iowa about once every two years.

The Film Office had a membership in the IMPA (Iowa Motion Picture Association) and the fee was paid for by the state. Tom joined the Iowa Scriptwriters Alliance (ISA) which he paid for himself. The Film Office was part of the International Association of Film Commissioners (which Tom was expected to participate in). He represented the Film Office in visits to IMPA, as well as visits to the Iowa Digital Filmmakers Guild (IDFG) in Iowa City and informed members of things going on in the state and worked to try to get them involved. He attended annual conventions of the Film Commissioners representing Iowa and promoting it as a place to do production.

Then the film incentives came into being...

Having talked to film commission people in other states and seeing what was going on, he was all for some sort of film incentive in Iowa since it would promote what he understood the Film Office's mission, indeed the mission of the whole Iowa Department of Economic Development, - the spending of money in Iowa. He was finding it difficult to compete with other states because they had film incentives and Iowa did not. Opportunities were being lost. However he wasn't the one to bring it up with the legislature. IMPA and other production entities in Iowa were the ones to approach the legislature about this. Tom Wheeler's role in all this was research for whoever asked for it. He looked up what other states were doing, what worked or didn't, what the incentives were, and how various programs were set up.

There were two failed attempts to pass film incentive legislation before it finally passed in 2006.

When Tom Wheeler joined the Film Office it was put in with Tourism. Later, once the film incentives were in place, it became apparent that Tourism wasn't up to the task of handling the business needs of film productions. Wheeler had a bit of a struggle getting the IDED to move it in with business but finally accomplished it.

Tom Wheeler testified that most of the learning of his job was by trial and error. This did not change with the passing of the film incentives. The film incentive bill did not provide any additional funding to provide for the expenses of administering such a program. The budget for the Iowa Film Office did not increase after the Film Incentives passed. In fact the budget was cut drastically.

Tom Wheeler testified that he had no training in either law or accounting. He entered the job with no experience with film tax incentives (in fact, these were new to everyone). He had never seen a film budget nor had any understanding of them. He testified that he relied heavily on the expertise of others within the IDED and other areas of state government such as Revenue and got as much help as he was able but many would only go so far and left him on his own after a certain point. He testified that at meetings about interpreting the film incentive statutes he was the least informed of everyone. He testified that he had only a "layman's understanding" of much of what he was confronted with.

When the film incentives passed, one of the things about them is that there were retroactive. There was no time provided to develop the proper materials (forms, applications, etc.) after they were passed and consequently for some films already shot within where the incentives were retroactive to the materials had to be improvised. Tom Wheeler had some help developing the rules and forms but much of it was left to him.

After the incentives passed his phone calls and emails increased exponentially. He was only given a limited amount of space on IDED servers to store Film Office files and this was soon exceeded. He at one point had to purchase with his own money an external hard drive to back up his files. It had a half terabyte capacity and that wasn't even enough. His email inbox, in the screenshot shown at the trial, showed over 11,000 messages.

It was established during testimony that Tom Wheeler made a great effort to keep records on everything and was constantly developing systems to keep track of the ever mounting volume of data. And this was while everything kept being changed. The content of applications were constantly updated as new information had to be adjusted for. Contracts on the other hand were not to changed more than once a year. The reason given by those who were involved with contracts at IDED was so that all the changes could be made at once. Of course, if you look at things, this was a problem because if something was wrong it would have to wait up to a year to be corrected. (The cars would be such an item.)

Tom Wheeler testified that it wasn't long before he went into reactive mode - that is, reacting to the current crisis rather than planning ahead - putting out fires, in other words. He testified that interpreting the statutes and administering the incentive program seemed straight forward at the beginning but turned out to be anything but when he actually did it. The program never stopped evolving even after he was fired.

The last of the testimony was truly breathtaking - a virtual descent into Wonderland. As mentioned before everything seemed straight forward at first as far as how the law was written and how the program was to be administered. That is until you get lawyers involved with it. The trouble started with "Peacock" with the term "Iowa resident" (if I remember what I heard correctly. The lawyers for that film told Tom Wheeler that programs in other states were interpreting the meaning of the term differently than how Tom understood it and was presenting it to them. Tom described how he had literally run to all of his various supervisors and told them of his error and how he had said they could do what they wished with him (fire him) if they needed to but that they needed to correct the problem first. The problem was one that could have cost the states millions in a lawsuit. During this part of the testimony it was mentioned that the terms "Iowa based company", "resident", "residency", "investor", "financial", "participant", "project", "qualified expenditure", - even "tax payer" were not defined in the law and were open to differing interpretations. Leave it to the lawyers! Tom Wheeler was definitely in over his head in all this. Who wouldn't be in such a crazy "Alice in Wonderland" situation?