Question Time

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.

The (scape)goat at the bottom of the hill

They say that “shit flows downhill”. They also say that “scum rises to the top”. Both were proven today with todays verdict at the Tom Wheeler trial. Tom Miller, the prosecuting attorney threw everything he had at Tom Wheeler but the jury only aligned itself with the prosecution for one count - “Felonious Misconduct”.

Throughout the trial Miller tried to paint Wheeler as the “inside man” and as someone “with an inflated sense of self-importance”. The “inside man” charge simply didn't fly given the evidence. Given the background of Tom Wheeler – him having a low level Production Assistant job at Fox Animation, and then having to return to Iowa to work such jobs as landscaping and the photo Department at Walgreens, it isn't surprising that he might display a bit of puffed up pride when he finally gets a title (Director of the Iowa Film Office) and a decent salary for a change. What for Tom Wheeler was pride in an important position was for his higher ups “arrogance” and you just know they can't stand someone who is uppity – especially in an office that they consider unimportant and just for “fun”. He was a “maverick” according to them, a regular loose cannon and when things went sour it was him who was to blame. Tom Wheeler was the one to throw under the bus.

And who instigated the whole mess? Mike “Teflon” Tramontina. He brought up the issue of the cars and then simply resigned and floated down gently to another cushy, well paying job. He blithely skipped off, leaving the mess to those who were left. Of course he made no mention of denying Tom Wheeler additional staffing for the Film Office because it was just there for “fun” or that he had denied a request from the Iowa Department of Economic Development's Legal and Compliance section to help Tom with the avalanche of contracts and make sure the producers were complying with the terms of the agreements.

It wasn't the first time that Mike “Teflon” Tramontina had left trouble behind while nimbly avoiding the fallout as this item in CityView's “Civic Skinny” column points out:

“The hurried “resignation” of Iowa Economic Development Director Mike Tramontina surprised folks who have watched his career. A lifelong bureaucrat, Tramontina had a survivor’s instinct almost unparalleled in the state. The single biggest screw-up in the not-very-many-screwups administration of Tom Vilsack was the hiring — for millions of dollars — of A.T. Kearney to find efficiencies in state government. It was ill-conceived and badly implemented, and it accomplished little if anything. Tramontina, who was then running the Iowa Department of Management, was “driving that bus,” in the words of one guy who followed it closely, but when the shooting and the shouting were over, it was Mollie Anderson of the Department of Administrative Services who eventually left.
Most folks assumed Tram would leave at the end of the Vilsack reign — the Culver people have little use for anyone associated with Vilsack — so it was a surprise when Tramontina ended up with the plum $145,000-a-year job at Economic Development. He wasn’t the first choice — UNI’s Randy Pilkington, and perhaps others, were sounded out — but he got the job, and Culver called him “a proven leader.” It was under Tramontina’s watch that the IDED was roundly criticized by the state auditor for failing to monitor, verify and assess a jobs-training program the community colleges run to help lure and keep businesses. It was fraught with, at best, sloppiness — at worst, negligence. But he sidestepped that one, too. Last week, the nimble Tramontina did his best to shift blame in the mess over film tax credits that led to his resignation late Friday. On Wednesday, he sent a cover-your-ass memo to his board and the Governor’s office noting that he had discovered these irregularities and laying out his plan of action. But it was too little, too late. By Friday evening, he was toast.

The lesson, says one pol: 'If you’re going to fuck something up, don’t do it in an election year.' Even if you’re Mike Tramontina.”

And then there is Vince “hear no evil, see no evil” Lintz who rubberstamped everything Tom Wheeler put on his desk without checking much of anything – who essentially said during testimony at the Wendy Runge trial as well as this one “I just let Tom do everything”.

And finally we have the prosecutor himself, Tom Miller. He was alluded to during the trial of giving no help at all to the Film Office. If anything lately Tom Wheeler is certainly not the defender of Iowans and the public purse but has eagerly taken on the role of the protector of the wealthy and the powerful. Think about it. Who had more power and connections within state government – Tom Wheeler or Mike Tramontina? Who has the Attorney General's Office gone after for “felonious misconduct” and on who's urging? So far Miller's office has wasted lots of tax payer's money on this perscecution and witch hunt while the man who made all of this possible, Mike “Teflon” Tramontina sits comfortably in a new job. And, to go off on a tangent, there is Tom Miller letting subprime lenders get away with fraud and siding with these people rather than Iowans losing their homes. But I digress.

A quote from one of the latest articles on the verdicts of the Tom Wheeler trial:

"Fraud in state government, whether perpetrated by those outside of state government, or enabled by those within state government, cannot and will not be tolerated," said Deputy Attorney General Thomas J. Miller.

Yes, that's right. Tom Miller won't tolerate fraud unless it is by subprime lenders and he won't tolerate felonious misconduct unless it is by someone well-placed and well-connected such as Mike “Teflon” Tramontina.

A great injustice was meted out today at the trial and Tom Miller was able to bring home the trophy to the powerful people he serves. Yes, today Tom Wheeler became the sacrificial goat so that those above him could escape all personal responsibility and any bit of tarnish on their images.

Fate of film office chief in jury's hands

by Rod Boshart/Cedar Rapids Gazette

DES MOINES – A state prosecutor Wednesday painted Tom Wheeler as a low-level manager with an inflated sense of importance who conspired with crooked filmmakers to defraud Iowa taxpayers while his attorney charged prosecutors with engaging in deception by making him the scapegoat for an ill-conceived film tax credit program riddled with problems.

The final chapter in the former Iowa Film Office director’s saga will be written by a Polk County jury of nine women and three men who began deliberating Wheeler’s fate Wednesday afternoon on charges of felony misconduct in office, first-degree fraudulent practices, and conspiracy. Wheeler, 42, of Indianola, pleaded not guilty to all nine counts brought against him.

During closing arguments, Iowa Deputy Attorney General Thomas H. Miller said Wheeler used his position as an insider to aid and abet at least six filmmakers who allegedly stole millions of dollars in tax credits from the state.

He also contended that Wheeler -- as “one of the very most important men as manager of the film office offering the most generous film incentive in the United States” -- assisted filmmakers by knowingly altering and substituting public documents, as well as knowingly approving false and inflated expenses submitted to his one-man office.

“But for his willful blindness, but for his winking and nodding and approving of all of these frauds, the state of Iowa wouldn’t have lost any money,” Miller told jurors.

The prosecutor said the defense was attempting to offer “ignorance” an excuse for Wheeler’s actions, but he pointed to inflated rental charges of hundreds of dollars for step ladders and push brooms listed in expense forms that the film office manager approved for tax credits in instructing jurors to “bring your common sense with you when you go back in the jury room.”

However, defense attorney Angela Campbell urged jurors to consider the number of witnesses for both sides who vouched for Wheeler’s honesty and good character in sorting through the prosecution’s “shotgun approach” of taking things out of context, creating “all sorts of red herrings” and using terms like “crooks” to lump him into a “kitchen sink” conspiracy with people who were submitting the documents in question.

“It’s hard to defend yourself against an onslaught of mudslinging,” Campbell told jurors in her closing statement in a trial in its third week.

Wheeler and five other people in the state Department of Economic Development lost their jobs when an unfolding scandal triggered by the purchase of luxury vehicles deemed eligible for tax credits prompted former Gov. Chet Culver to suspend the program and request a probe by the state auditor and attorney general after an internal audit raised concerns about lax oversight, mismanagement, inadequate documentation of expenditures, and payments for questionable in-kind services.

Wheeler was hired in 2004 primarily for marketing and promotional duties, but his duties and the demands on his office exploded in 2007 when Iowa began providing 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.

He testified that he did not have adequate training, contract and accounting expertise, staff or resources to handle the “tsunami wave” of requests for information by interested filmmakers that overwhelmed his office.

A state audit released in October 2010 detailed $25.6 million in tax credits allegedly issued improperly to film projects. Nearly $32 million worth of tax credits were granted to 22 film companies, and State Auditor David Vaudt said he was surprised to find that about 80 percent of the claims involved payments for expenditures where there was no proof or inadequate documentation.

Campbell said Wheeler relied on the direction from state Department of Revenue and DED officials to administer the tax-credit program and approved the vehicle purchases because he was told they were qualified expenditures under the circumstances in which they were used.

While he may have been naïve at times, he did not engage in criminal activity and the state failed to prove he committed knowing and intentional fraud.

“Tom Wheeler tried to fix the problem, but he was fired before he could do it,” she said. “He did what he thought was his job and he did it to the best of his ability.”

She portrayed Wheeler as “an over-worked, under-qualified person put into a position he should have never been put into without the support he should have been given” who kept his superiors informed and maintained a paper trail of email and documentation of his film office dealings.

“That’s not hiding, that’s not deception, that’s not fraud,” Campbell said.

However, Miller said Wheeler intentionally withheld information from his bosses – including the criminal background of a California filmmaker who signed an Iowa film tax-credit contract -- and at times helped filmmakers manipulate Iowa’s incentive program to their advantage as the “man on the inside” who would “turn a blind eye” to inflated expense claims or sponsorship values that a reasonable person would have challenged.