from Des Moines Register.Com

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Written by
LEE ROOD



Two of the first witnesses in Tom Wheeler’s trial this morning warned the former film chief that filmmakers were were abusing the new film tax incentive program passed by the Legislature in 2007.

Wheeler faces multiple felony charges for misconduct in office, fraudulent practices and conspiracy. Hired to run Iowa’s one-person film office in 2004, he has been accused by state prosecutors of being an “inside guy” for those who abused the program.

Steve Faust, an Urbandale man who worked on several Iowa movies after the incentive was created, testified that he warned Wheeler director Bruce Isacson was drving a Land Rover on the set of “South Dakota” that did not appear to be used in the film.

Faust said he had heard it was being loaded up and shipped back to California.

“I went and said, ‘Tom, do I need to talk to you or someone above you?” he said.
Wheeler, Faust said, told him he would take care of the problem. He also told Faust to not tell higher-ups because he could get fired.

But Faust alo said Wheeler was respected by the people he worked with in the industry and acknowledged Wheeler might have overlooked things because the program was growing so quickly.

Faust said he had no idea whether the law drafted by legislators or rules put into place afterward by the Iowa Department of Economic Development allowed for the purchase of luxury vehicles.

Also this morning, Doug Miller, one of the state’s most experienced film and production professionals, said he warned Wheeler early of potential problems with part of the tax incentive that offered investors in a film a 25 percent tax credit.
Miller, co-founder of Great River Studios in the Quad Cities, said he worked extensively with Wheeler and other industry-backers to create incentives to lure movies to Iowa. He said he knew investor enticements could prove a problem in an industry known to have its share of swindlers, but organizers proceeded with the incentive anyway.

Miller was also expected to testify today that he told Wheeler one movie-maker changed his name after being convicted of bank fraud, and that Wheeler allowed that moviemaker to proceed with a project anyway under a different name.

The film scandal erupted in late summer 2009 after a preliminary audit at the Iowa Department of Economic Development revealed widespread mismanagement and abuses.

The state has doled out $1.5 million in court settlements so far, convicted a handful of filmmakers for trying to defraud taxpayers and fired several state workers.

The incentive program has been suspended until 2013.