Iowa's film program costs near $1.5 million with deal

From the Des Moines Register (http://www.desmoinesregister.com/article/20110810/NEWS10/108100311/-1/GALLERY_ARRAY/Iowa-s-film-program-costs-near-1-5-million-deal):

Iowa's film program costs near $1.5 million with deal
by Lee Rood

Producers of the 2009 movie "Smitty" reached an agreement this month with state prosecutors to receive cash and tax credits, pushing the taxpayer tab of court settlements tied the collapse of Iowa's film program to almost $1.5 million.

Under the agreement, makers of the family feature film starring Peter Fonda, Mira Sorvino and Louis Gossett Jr. will receive more than $265,000 in tax credits and almost $60,000 cash.

Jeff Thompson, a deputy state attorney general, said settlements with the makers of "The Crazies" and "The Experiment," two films whose expenses are being audited by the state, are expected to eventually be the largest reached. A handful of others could still receive tax credits.

Several filmmakers had yet to receive credits when the lucrative film incentive program was suspended in 2009 due to abuse and mismanagement. A state audit released in 2010 found 80 percent of the tax credits awarded before the program collapsed - some $26 million of $32 million - were issued improperly.

The state paid $450,000 this year to Midsummer Films, a film company that was planning to spend millions in Iowa before the program was abandoned. The company planned to make six movies, to be filmed over three years, that were worth an estimated $60 million to $70 million.

Late last year, the state also paid a $434,171 cash settlement to After Dark Films. The amount was on top of $315,828 in tax credits previously awarded to the company, which made the horror movies "Husk" and "Fertile Ground."

Next week, Tom Wheeler, former manager of the state's one-man film office, will face charges of felonious misconduct in office, first-degree fraudulent practices and conspiracy. He has pleaded not guilty.

Dennis Brouse, 60, of Plattsmouth, Neb., the owner of Changing Horses Productions, is scheduled for trial March 15.

Chad Witter, 38, of Bettendorf, a tax credit broker accused of helping several filmmakers abuse the program, is scheduled to go to trial April 16.

Harel Goldstein - also known as Harel Gold and Kevin Ward - of Calabasas, Calif., has been charged with first-degree fraudulent practices, forgery and conspiracy. Goldstein, 50, is a movie distributor and was producer of the film "Underground." He has yet to appear in court.