From KCCI TV-8 In Des Moines

DES MOINES, Iowa -- The former director of the Iowa Film Office is taking the witness stand in his trial in a Polk County courtroom Monday.

Former Director Tom Wheeler is on trial, charged with several counts of fraud, misconduct in office and conspiracy. Wheeler has pleaded not guilty to the charges.

Wheeler took the stand at 11 a.m. He said he has a bachelor's degree in Sociology and Religion. He said he hasn't taken accounting or law classes. He did take a graduate level creative writing class.

"I was not a very good student," said Wheeler.

He went on to talk about his job experience before taking the Film Office director's job, including working for a landscaping company, at a Bruegger's store and at a Walgreens in the photo department. He said then he applied for the job at the Iowa Film Office.

He interviewed with Nancy Landis, Mary Lawyer and Mike Blouin. He was offer the job and started working in January 2004.

Wheeler said the job was described to him as a marketing and customer service position. At the time he was hired, he said he was capable and qualified to do the job.

Wheeler said state employees were not allowed to take gifts, food or beverages. Wheeler said he never did.

He was not given any additional training for his job at the Iowa Film Office.

"I thought I knew what I was getting into," said Wheeler.

Wheeler said he answered phone calls and emails about films, maintained a production guide and provided photographs or took photographs of locations for movie shoots.

His salary was $50,000 plus benefits.

He said the position was by far the best job he had ever had -- paywise.

"By and large, I thought I knew what to do on a day-to-day basis," said Wheeler.

Wheeler said he learned how to do things by "trial and error."

Wheeler said his job was evolving on an ongoing basis. Then in 2007 with the passing of film tax credit law, his job changed dramatically.

Wheeler said he never endorsed any business. He would refer filmmakers to the production guide if there was more than one business in a particular category.

"Were you ready for a tax incentive bill to pass?" asked the defense attorney.

"In hindsight, no," said Wheeler.

Wheeler said he had no accounting experience, no history with tax credits, no law experience, no administrative experience and no lobbying experience.

Wheeler said after the film tax credits passed, his budget shrank. Wheeler also said he was denied any additional staff to help him.

He said he sought help to understand the tax credits.

"I was the least experienced person in the room, maybe in the building on that subject," said Wheeler.

Before being hired, he said he had never seen a film budget. He wasn't given any training in film budget accounting. He learned about film accounting from the filmmakers and the people who were developing budgets for films.

He said at first the film tax credit law seemed pretty straight forward.

"I was terribly wrong," Wheeler said.

Wheeler said the law was confusing. He said he did his best to figure it out.

"Did anyone ever tell you had it all wrong?" asked the defense attorney.

"No," Wheeler said.

Wheeler said the tax credit law was also retroactive to Jan. 1, so the demand for the credits was immediate. He said he had no time to establish rules, paperwork or promotions. He received more than 10,000 emails and used Outlook as a file cabinet. He also had hundreds of folders and files on his computer.

Earlier Monday...

Earlier on Monday morning, Kristina Swanson took the stand. She worked on "Splatter" and "The Offering" with Bruce Elgin. She was told she would not be paid until tax credits were cashed.

Her contract for "Splatter" was that she would be paid $28,000 for her work. If the film was sold she would get $148,000. She thought the low number was low. She said the high number was more in line with what she would be paid in Los Angeles.

She said she ended up being paid $28,000 plus reimbursements.

The prosecution said Iowa taxpayers reimbursed Elgin more than $74,000 for Swanson's services.

Swanson said she was surprised to hear the numbers, a little confused and sad.

Her contract for "The Offering" was that she would be paid $11,000 to $55,000 for her work.

The prosecution said Bruce Elgin received $27,500 in taxpayer money to pay her. She received $11,000.

She said if she thought anything wrong was going on, she did not tell Wheeler.

Look for more trial coverage here on KCCI.com and on KCCI-TV.

Thursday Testimony

The defense called four witnesses Thursday, three of whom worked closely with Wheeler in the Department of Economic Development including the man who hired him.

Anthony Gudas, owner of a company that pre-funds state tax incentives for filmmakers, took the stand Thursday morning.

"I thought Tom was honest. I thought he was overwhelmed and probably lacked the experience necessary to run a successful film program," said Gudas. "It also caused, shall I say, earthquakes throughout the industry in the business that I'm in and probably a lot of projects did not get made at first because they were wondering if there would be a domino effect from other states."

Gudas said Iowa's tax credit program was one of the best in the nation, but the legislation was poorly written and the program lacked structure.

He testified that he has more than $8 million in pre-funded tax credits trapped in the state as a result of contracts not being honored after the program was suspended.

He also said he believed Wheeler was overwhelmed but under qualified for the job of director.

Mike Blouin, the man who hired Wheeler for the position agreed with Gudas' testimony when he took the stand later in the day.

Blouin was the director of the Iowa Department of Economic Development then when he hired Wheeler, which was before the Film Tax Credit program was enacted.

"I don't think Tom was experienced or skilled or capable of handling the kind of program that would have been put on if the program had been proposed when I was director. As such, I may not well have even supported it. There was no staff, no budget, no account or legal help added as a result of it," said Blouin.

There will be no testimony Friday. The trial is expected to resume on Monday.

Wednesday Testimony

Wednesday morning, Wheeler's older brother, Steven, continued his testimony. Defense attorney Angela Campbell asked if Steven had seen any fancy cars, boats or anything big purchased by Tom Wheeler.

"Nothing," Steven Wheeler replied.

He was followed by Scott Seyman, who worked with Wheeler at Fox Animation Studios in Phoenix.

Seyman described Wheeler as a "Hard worker, eager to please. Always ready to take on more responsibilities. Just a real go-getter. Kind of a 'Type A' kind of guy."

Former tourisim director for the Iowa Department of Economic Development, Nancy Landess, also provided testimony.

She said Wheeler was hired in a marketing position to promote filming in Iowa. She said that Wheeler had performance goals that he was expected to meet for the number of films he brought to Iowa.

In December 2007, the goal was two films and Landess asked if he had met that goal.

"Would it be fair to say then ma'am that you were trying to encourage Tom Wheeler to increase the number of films that were used in the program?" said Campbell.

"Well certainly that was the goal to increase the number that were using the program," said Landess.

Mike Tramontina served as Director of the Iowa Dept of Economic when Wheeler was in charge of the Iowa Film Office. He took the witness stand on Wednesday morning.

Tramontina said he doubts Wheeler receive training on tax credits as an employee in the tourism department where he worked before joining the film office. He said he was in contact with Wheeler during the entire process and that Wheeler was not doing it by himself.

Campbell asked if Wheeler was seeking assistance and guidance from his supervisors.

Tramontina said Wheeler was on an irregular basis. Tom was not as communicative with his supervisors as most employees are and he probably asked fewer questions of his supervisors, fewer things came up to me than typically other people did, said Tramontina.

Tramontina said it was the general counsel and office of the attorney general's job to interpret law and statutes for the film office.
[Runge on witness stand.]
Runge on witness stand.

Minnesota firmmaker Wendy Runge took the stand in the afternoon. Runge pleaded guilty to first-degree fraudulent practice concerning the film projects "Run" and "Forever." She has been cooperating with the Film Office investigation.

Runge became emotional when she talked about her guilty plea and her pending appeal. She said she never had an agreement with Wheeler to defraud the state.

Runge said that she believed Wheeler did the job to the best of his ability.

She said Wheeler often said he had to ask, had to find out what the policy was and that he would get back to her, so often he would not answer directly and then get back at some point and time or maybe an answer never came from his superiors.

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