Pointed questions about the situation surrounding the Iowa film tax credit scandal
The Tom Wheeler trial as well as the other trials that have taken place due to the Film Tax Credit scandal have answered a lot of questions but not all, and have raised many more. There are many pointed questions I can think of that I would like to ask the various people who had a part in creating the problem. (Asking these questions with the aid of a pointed stick would be especially satisfying.)
To Michael Blouin, the first head of the Iowa Department of Economic Development (IDED) that Tom Wheeler served under (during the Vilsack administration) I would like to ask this:
Why did you hire Tom Wheeler in the first place while ignoring the 40 or so other applications for the job of Iowa Film Office manager? You didn't renew the contract of previous Film Office manager, Steve Schott, and instead appointed Tom Wheeler without any review of the many applications. Why?
While there may have been applications in the pile of people that were just as qualified as Wheeler, there likely were people with better experience, yet you skipped over these people. Tom Wheeler's experience in the film business consisted of working as a Production Assistant at Fox Animation in the Editorial Department. Did you even bother to find out what this job entailed?
A Production Assistant (PA) is the lowest rung on the ladder. These are the people who get the coffee and do the filing. Tom Wheeler never was on a motion picture or television set, never worked on locations, never dealt with film budgets, and never did many of the things that he would later be asked questions relating to when he went to work for you. He was having trouble with the job long before the film tax credits entered into things or before you moved on to another position elsewhere.
So, tell me again why you hired him? Was he someone's well-connected relative? Did one of your bosses tell you to hire him and to pay no attention to all the other applicants?
I really want to know. Please tell me.
To the members of the Iowa Legislature:
My question to you is not why did you pass the film tax credit bill? With the competition from other states for film projects and the dollars they brought, passing this bill made perfect sense. No, my question - questions, actually - to you are these: Why did you write a law that concerned taxpayer dollars with such vague language? Why did you not include funding or qualified staffing to adequately administer such a program? And finally, why are you now pretending that you had nothing to do with it?
Both major political parties in both houses passed it with a majority voting for it. Now, rather than showing any true leadership and fixing its flaws, you prefer to pretend that it doesn't exist and hope that it will simply go away.
To Michael Tramontina, the second director of the Iowa Department of Economic Development that Tom Wheeler served under:
Just where were you during this big mess? Sleeping at your desk? Were you really so clueless as to think the Film Office was just some fun little tourism thing and that the film tax credits were just some vague abstract thing that the legislature had talked about once? And why did you panic and resign once the issue of luxury cars came up? (Note to self: If ever visiting Beverly Hills with Mike Tramontina, don't go anywhere near a Rolls-Royce dealership. It could give him a heart attack!)
If Tom Wheeler was unable to handle the film tax credits himself, why did you let him? Why didn't you provide staffing for him? And if you didn't think he was the man for the job, why didn't you replace him? You know, division heads have that power. Why didn't you use it?
To Tom Wheeler, the now former manager of the Iowa Film Office:
While I know you suffered greatly through the ordeal of being fired from your job and through the time of your trial (they don't call them "trials" for nothing!), to say nothing of your time at the Iowa Film Office, there are still questions that need to be asked.
Why did you not seek more help from the film community during your term as manager when it became apparent that you were in over your head? I am not just asking about the time when the film tax credits became part of the job. I'm talking about your whole term as manager. Why did you mostly rely mostly upon the internet for information when you could have called people in the know directly who could have given you much more informed answers? There is a lot of information on the internet, true, but it is by no means complete nor necessarily accurate. Was it a puffed up sense of pride from having your first well paying job and a "I can do it all myself" attitude that made you approach your job this way?
And when the film tax credits came into being and your higher ups not only refused you the money and the proper staffing to administer it - in fact cut your Film Office budget - why didn't you just quit? It certainly would have appeared the honorable thing to do and in truth would have been. You could have possibly used your Film Office credentials to find another job in the film industry. Why did you try to be a hero when you were so obviously unprepared and unarmed for the situation?
To Tom Miller, Iowa Attorney General:
Why didn't you provide any legal assistance to the Iowa Film Office during the time of the film tax credits? Were you somehow expecting Tom Wheeler to know all about this subject or about the law in general? Why did you allow your office to be used as a tool to make Tom Wheeler a scapegoat and deflect attention from the other responsible parties who should have known better? Why did you make it your job to protect the powerful in state government at the expense of Iowa taxpayers?
To Chet Culver, former governor of Iowa:
Did you pay any attention at all to what was happening in the various departments under your care, or were you too busy keeping up with the doings of the Green Bay Packers? Why did you decide to make no effort at all to fix the film tax credit program problems once you awoke from your slumber? To use words you might understand, why did you forfeit the game when it was still only at the beginning of the first quarter after noticing that the score was not in your favor?
You could have frozen the film tax credit program for only a limited period of time - time enough to regroup, fire whoever needed to be fired, hire whoever needed to be hired, do whatever triage necessary to get things moving again, and then work with all the parties involved to fix the problems for good. You can walk and chew gum at the time, can't you? (Don't answer that!)
Instead, you froze everything for essentially forever with no attention given whatsoever to the possible consequences of your actions. Then you had the nerve to try to use it as an issue for your re-election campaign with your tough guy declaration about Iowans not being made into suckers.
Are you surprised you lost the election? I'm not.
To the great silent majority of the Iowa film community:
I'm talking about those who simply sat back while this whole thing was going on without raising a finger to fight back for a chance for a satisfying way to make a living. Why didn't you do anything? What was so important that you couldn't even take 5 minutes to write a legislator or send a "letter to the editor" expressing your thoughts? There were plenty of you around when times were good. You were lining up at the craft service tables, grabbing the pay checks, the glamor of the visiting celebrities, and enjoying the camaraderie of the set. But when all of this was threatened you decided to hang back and let others do the leg work. Why?
The few who did try to do something and did speak up need more than the occasional "Atta boy!" from you. The need more than a "thank you". They need more than an apology from all above. They need their lives and opportunities restored. Who is going to do it for them?
To all of those I've referred to above and to all of those reading this article:
The problem with the film tax credit scandal is that it just didn't affect the Iowa Film Office, it didn't just affect the well being of the Iowa Department of Economic Development, and its effects did not stop at the Culver administration. It affected the whole state of Iowa and in its wake took down several other Film Offices and film incentive programs in other states. It put a black eye on Iowa in the eyes of the rest of not only the country but of the world and not just in the film community.
Film producers no longer trust the State of Iowa for anything. Who can blame them?
In the film community what happened as a result of the film tax credit scandal was the equivalent of the dropping of an atomic bomb. Iowa may as well contain deadly radiation as far as they are concerned. Nobody wants to film in Iowa any longer, at least professionally anyway. The fallout is going to last years, if not decades to come.
Showing posts with label iowa film trials. Show all posts
Showing posts with label iowa film trials. Show all posts
Wednesday, October 26, 2011
Monday, August 29, 2011
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?
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?
Wednesday, August 24, 2011
Brother: Tom Wheeler wanted to leave Iowa Film Office
by Rod Boshart/SourceMedia News for the Cedar Rapids Gazette, August 23, 2011, 5:59 pm
DES MOINES – David Wheeler testified Tuesday he advised his younger brother in 2009 to “hold on” as manager of Iowa’s Film Office given the tough economy even though he was swamped with what defense attorneys are portraying as a burgeoning though poorly structured state tax-credit program for which he was not adequately trained or staffed to run.
“I remember specifically writing to him: ‘Tom, it’s tough out there. I would hold on.’ In retrospect, I wish he wouldn’t have taken my advice,” he told a nine-woman, three-man Polk County jury during the second week of Tom Wheeler’s trial on charges of felony misconduct in office, first-degree fraudulent practices and conspiracy related to his work at the film office prior to his September 2009 termination.
David Wheeler, a Norwalk native who now lives in Spruce Pine, N.C., and operates an event management company, said he had several “chats” with his brother about leaving the post in the Iowa Department of Economic Development to pursue other options, but he told Tom to keep his job for the time being due to the tight employment market.
“He was very upset. He was working his tail off,” said David Wheeler, who struggled to keep his composure during about four minutes of testimony. “Our father had died the year before and he never really had time to deal with that, and the bottom fell out and here we are today.”
David Wheeler told jurors he is paying for his brother’s defense because “Tom’s been out of work and he’s got nothing left.”
The testimony came on a day when prosecutors rested their case after showing a brief video of Tom Wheeler making a presentation to California moviemakers touting Iowa’s film tax credit program as half-price filmmaking that provided a 25 percent tax credit for production expenditures made in Iowa and a 25 percent tax credit for investors for projects that spent at least $100,000 in Iowa.
Prosecutors have painted Wheeler as “an inside man” who allegedly helped filmmakers fraudulently obtain state tax credits for bogus claims, inflated expenses and unqualified purchases. They contend he used his position in the film office to help filmmakers improperly benefit from the tax credit program by knowingly altering and substituting public documents, and by knowingly approved false and inflated expenses submitted to the film office.
Defense attorney Angela Campbell worked to dispel that image by calling witnesses who praised the former film office manager as friendly, professional, ethical and honest.
“I felt that he was a straight forward, honest guy,” said Joel Sadilek, a former Cedar Rapids resident who works as a movie line producer in California.
Sadilek said Wheeler never suggested anything untoward to skirt the program’s rules during the two films he worked on in Iowa, but he conceded during cross examination by prosecutors that some of the rental costs approved by Wheeler for other projects that qualified for tax credits were excessive – examples such as $450 to rent two shovels for six weeks or $250 for a rake.
Among the six defense witnesses to testify Tuesday was Donald Schnitker, a special agent of the Iowa Division of Criminal Investigation, who helped probe the film office operations after former Gov. Chet Culver suspended the tax-credit program when allegations surfaced of lax oversight, sloppy bookkeeping and questionable expenditures that included two luxury vehicles that were taken to California for personal use. After the scandal broke, six people lost their jobs within the economic development agency, including Wheeler.
Campbell produced a bank statement seized by DCI agents and asked Schnitker: “Sir, can you tell me where in that exhibit it demonstrates that Mr. Wheeler was getting paid on the side, getting a bribe or otherwise improperly benefitting from the film tax credit program?”
“There’s no evidence of that in this bank account,” Schnitker replied. He also said DCI agents were unable to locate any other bank accounts held by Wheeler.
“So, either Tom Wheeler is so talented at hiding bank accounts or he doesn’t have another one,” Campbell noted.
“Correct,” the DCI agent said.
Campbell also talked about 32 boxes of materials investigators seized from the film office and asked Schnitker: “Sir, can you tell me where in those boxes you found evidence that Mr. Wheeler was improperly benefitting from his work at the Iowa Film Office?”
“Monetarily benefitting?” he replied.
“Yes,” Campbell said.
“That wasn’t found,” Schnitker testified.
DES MOINES – David Wheeler testified Tuesday he advised his younger brother in 2009 to “hold on” as manager of Iowa’s Film Office given the tough economy even though he was swamped with what defense attorneys are portraying as a burgeoning though poorly structured state tax-credit program for which he was not adequately trained or staffed to run.
“I remember specifically writing to him: ‘Tom, it’s tough out there. I would hold on.’ In retrospect, I wish he wouldn’t have taken my advice,” he told a nine-woman, three-man Polk County jury during the second week of Tom Wheeler’s trial on charges of felony misconduct in office, first-degree fraudulent practices and conspiracy related to his work at the film office prior to his September 2009 termination.
David Wheeler, a Norwalk native who now lives in Spruce Pine, N.C., and operates an event management company, said he had several “chats” with his brother about leaving the post in the Iowa Department of Economic Development to pursue other options, but he told Tom to keep his job for the time being due to the tight employment market.
“He was very upset. He was working his tail off,” said David Wheeler, who struggled to keep his composure during about four minutes of testimony. “Our father had died the year before and he never really had time to deal with that, and the bottom fell out and here we are today.”
David Wheeler told jurors he is paying for his brother’s defense because “Tom’s been out of work and he’s got nothing left.”
The testimony came on a day when prosecutors rested their case after showing a brief video of Tom Wheeler making a presentation to California moviemakers touting Iowa’s film tax credit program as half-price filmmaking that provided a 25 percent tax credit for production expenditures made in Iowa and a 25 percent tax credit for investors for projects that spent at least $100,000 in Iowa.
Prosecutors have painted Wheeler as “an inside man” who allegedly helped filmmakers fraudulently obtain state tax credits for bogus claims, inflated expenses and unqualified purchases. They contend he used his position in the film office to help filmmakers improperly benefit from the tax credit program by knowingly altering and substituting public documents, and by knowingly approved false and inflated expenses submitted to the film office.
Defense attorney Angela Campbell worked to dispel that image by calling witnesses who praised the former film office manager as friendly, professional, ethical and honest.
“I felt that he was a straight forward, honest guy,” said Joel Sadilek, a former Cedar Rapids resident who works as a movie line producer in California.
Sadilek said Wheeler never suggested anything untoward to skirt the program’s rules during the two films he worked on in Iowa, but he conceded during cross examination by prosecutors that some of the rental costs approved by Wheeler for other projects that qualified for tax credits were excessive – examples such as $450 to rent two shovels for six weeks or $250 for a rake.
Among the six defense witnesses to testify Tuesday was Donald Schnitker, a special agent of the Iowa Division of Criminal Investigation, who helped probe the film office operations after former Gov. Chet Culver suspended the tax-credit program when allegations surfaced of lax oversight, sloppy bookkeeping and questionable expenditures that included two luxury vehicles that were taken to California for personal use. After the scandal broke, six people lost their jobs within the economic development agency, including Wheeler.
Campbell produced a bank statement seized by DCI agents and asked Schnitker: “Sir, can you tell me where in that exhibit it demonstrates that Mr. Wheeler was getting paid on the side, getting a bribe or otherwise improperly benefitting from the film tax credit program?”
“There’s no evidence of that in this bank account,” Schnitker replied. He also said DCI agents were unable to locate any other bank accounts held by Wheeler.
“So, either Tom Wheeler is so talented at hiding bank accounts or he doesn’t have another one,” Campbell noted.
“Correct,” the DCI agent said.
Campbell also talked about 32 boxes of materials investigators seized from the film office and asked Schnitker: “Sir, can you tell me where in those boxes you found evidence that Mr. Wheeler was improperly benefitting from his work at the Iowa Film Office?”
“Monetarily benefitting?” he replied.
“Yes,” Campbell said.
“That wasn’t found,” Schnitker testified.
Monday, August 22, 2011
An Afternoon at the Tom Wheeler Trial
Since I had the day off today, I went down with Jay Villwock to the Tom Wheeler trial. We were able to join the proceedings in the afternoon.
The defense attorney for Tom Wheeler was cross-examining Vince Lintz, the former Deputy Director of the Iowa Department of Economic Development (IDED). From the way the questioning was going, I had guessed that it was the defense's witness, not the prosecutions because for the most part the answers couldn't have been more favorable to the defense's case.
The judge from what I could tell appeared to be the same one who had presided over the Wendy Runge trial. I got a vibe from his of being fair and impartial and that his mind wasn't made up in support of either side. Wheeler's attorney, Angela Campbell, was a very sharp lawyer during what I saw and there was a lot more action during this portion of the trial than I had expected.
The main thing that was established through the questioning was that Wheeler was overwhelmed and overworked and that the people above him at the IDED were in many ways clueless or asleep at the wheel. Many examples of what he had to do, what he was expected to do, and what kind of support he received from his higher-ups was given with thorough, respectful questions asked to confirm things.
Even early in the film program, Tom Wheeler was overwhelmed and needed assistance but was not provided the additional staff that was needed. And then the onslaught happened after a cap was set and a total of 122 applications were submitted to the office. As an example of the number of documents required for just one film to establish expenses three bankers boxes of receipts were brought onto the courtroom floor. And this was just for one average film. It was emphasized how long it would take to go through all of this and how unreasonable it was to expect one person to do this alone. (I recall it took a team at the Attorney General's Office at least 6 months before they could even start to bring any charges.) There was mention of phone voice message boxes being full and unanswered, both for Tom's office and cell phone (that's a LOT of messages). Wheeler's attorney recounted all of the various jobs he was supposed to do and it sounded like enough for at least 3 people to keep busy to me. Practically every question the defense attorney asked about responsibilities ended with the answer "Tom".
There was evidence presented to show that Tom Wheeler was not the "inside man" the prosecution has claimed him to be but rather that he was making strong efforts to tighten the program and to identify and eliminate the loopholes. It was established that Tom tried to work with people to make changes in the rules to make the program run better and that he worked with legislators. It also established that he did not write the law. In fact it was made clear that he had neither the legal training nor the training in accounting that was needed for what he was asked to do.
The issues of the cars was brought up. You remember those, don't you? The Land Rover and the Mercedes - the vehicles that started this whole scandal? It turns out that there was nothing in the law as it had been written nor in the contracts made with producers that excluded these purchases - the ones that got the press and the Culver administration into such an uproar. It was shown beyond a doubt that leasing and purchasing of motor vehicles was allowed under the terms of the law and the contracts. There was no mention of how they were to be used or what kind of vehicles could be purchased. Have you ever wondered why no charges have ever been brought up concerning these vehicles? If you didn't before, you do now.
Toward the end of the session the prosecution tried to counter some of the arguments of the defense. A job review form was exhibited that showed that Tom Wheeler had not filled in an area where it asked if he needed additional staff to do his job. After the evidence in emails from earlier in the program, this omission didn't seem to carry as much weight. Given the work load it certainly seems possible that Wheeler could have either forgotten to fill it in or was at the point of throwing up his hands and not bothering because of the futility of asking. That is at least my impression.
I'm sure I've probably have left some things out from the afternoon's proceedings but that's the gist of a lot of it. Tom Wheeler's trial is set for three weeks and this is the second week. I'll be off work again next Monday and will try to attend and see what I can give as an eye witness report.
-Dave
The defense attorney for Tom Wheeler was cross-examining Vince Lintz, the former Deputy Director of the Iowa Department of Economic Development (IDED). From the way the questioning was going, I had guessed that it was the defense's witness, not the prosecutions because for the most part the answers couldn't have been more favorable to the defense's case.
The judge from what I could tell appeared to be the same one who had presided over the Wendy Runge trial. I got a vibe from his of being fair and impartial and that his mind wasn't made up in support of either side. Wheeler's attorney, Angela Campbell, was a very sharp lawyer during what I saw and there was a lot more action during this portion of the trial than I had expected.
The main thing that was established through the questioning was that Wheeler was overwhelmed and overworked and that the people above him at the IDED were in many ways clueless or asleep at the wheel. Many examples of what he had to do, what he was expected to do, and what kind of support he received from his higher-ups was given with thorough, respectful questions asked to confirm things.
Even early in the film program, Tom Wheeler was overwhelmed and needed assistance but was not provided the additional staff that was needed. And then the onslaught happened after a cap was set and a total of 122 applications were submitted to the office. As an example of the number of documents required for just one film to establish expenses three bankers boxes of receipts were brought onto the courtroom floor. And this was just for one average film. It was emphasized how long it would take to go through all of this and how unreasonable it was to expect one person to do this alone. (I recall it took a team at the Attorney General's Office at least 6 months before they could even start to bring any charges.) There was mention of phone voice message boxes being full and unanswered, both for Tom's office and cell phone (that's a LOT of messages). Wheeler's attorney recounted all of the various jobs he was supposed to do and it sounded like enough for at least 3 people to keep busy to me. Practically every question the defense attorney asked about responsibilities ended with the answer "Tom".
There was evidence presented to show that Tom Wheeler was not the "inside man" the prosecution has claimed him to be but rather that he was making strong efforts to tighten the program and to identify and eliminate the loopholes. It was established that Tom tried to work with people to make changes in the rules to make the program run better and that he worked with legislators. It also established that he did not write the law. In fact it was made clear that he had neither the legal training nor the training in accounting that was needed for what he was asked to do.
The issues of the cars was brought up. You remember those, don't you? The Land Rover and the Mercedes - the vehicles that started this whole scandal? It turns out that there was nothing in the law as it had been written nor in the contracts made with producers that excluded these purchases - the ones that got the press and the Culver administration into such an uproar. It was shown beyond a doubt that leasing and purchasing of motor vehicles was allowed under the terms of the law and the contracts. There was no mention of how they were to be used or what kind of vehicles could be purchased. Have you ever wondered why no charges have ever been brought up concerning these vehicles? If you didn't before, you do now.
Toward the end of the session the prosecution tried to counter some of the arguments of the defense. A job review form was exhibited that showed that Tom Wheeler had not filled in an area where it asked if he needed additional staff to do his job. After the evidence in emails from earlier in the program, this omission didn't seem to carry as much weight. Given the work load it certainly seems possible that Wheeler could have either forgotten to fill it in or was at the point of throwing up his hands and not bothering because of the futility of asking. That is at least my impression.
I'm sure I've probably have left some things out from the afternoon's proceedings but that's the gist of a lot of it. Tom Wheeler's trial is set for three weeks and this is the second week. I'll be off work again next Monday and will try to attend and see what I can give as an eye witness report.
-Dave
Subscribe to:
Posts (Atom)