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 Tom Wheeler. Show all posts
Showing posts with label Tom Wheeler. Show all posts
Wednesday, October 26, 2011
Tuesday, September 6, 2011
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.
Wednesday, August 31, 2011
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.
Tuesday, August 30, 2011
Wheeler: I made mistakes, but none were criminal
Former Film Office director again takes stand in his own defense
by Rod Boshart/Cedar Rapids Gazette
by Rod Boshart/Cedar Rapids Gazette
Former Iowa Film Office manager Thomas Wheeler admitted Tuesday that he made mistakes overseeing the state’s film tax-credit program, but none were done with criminal intent or to help others commit fraud.
During his second day of testifying in his own defense at his criminal trial, Wheeler said the missteps in administering what had become the nation’s most lucrative film incentive largely were rooted in:
- The new incentive law’s many ambiguities.
- A number of evolving interpretations being made by state tax and economic development officials over what expenses and in-kind services were eligible for investors and producers seeking transferrable state tax credits.
The former state employee said the “tsunami wave” of contacts that flooded his office once Iowa began providing a 25 percent tax credit for production expenditures made in Iowa, plus a 25 percent tax credit for investors for projects that spent at least $100,000 in Iowa coincided with other challenges that engulfed the state Department of Economic Development. Those challenges included the state’s worst flooding disaster, the national recession and state budget cuts that all stretched DED resources thin.
Wheeler, 42, of Indianola, is being tried in Polk County District Court on charges of felony misconduct in office, first-degree fraudulent practices, and conspiracy for his role as film office manager from 2004 until September 2009 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. He has pleaded not guilty to all the criminal charges filed against him.
Wheeler and five other people lost their jobs in the economic development agency when an internal audit raised concerns about lax oversight, inadequate documentation of expenditures, payments for questionable in-kind services, and credits that had been issued for the purchase of luxury vehicles that were later taken to California for personal use.
Wheeler said throughout his time at the film office he followed the law to the best of his ability even though the details were murky at times and “the variables were literally infinite.” He said his firing was unexpected. “When I was charged, it was a surprise,” he said.
Under questioning by his defense attorney, Angela Campbell, about mistake he made, Wheeler said: “That’s why we’re here in part, I made a lot of mistakes.”
Asked by Campbell: “Did you ever intend to make a mistake that would cause people to be able to commit fraud?”
“Absolutely not,” Wheeler replied.
State prosecutors were expected to begin their cross examination of Wheeler on Tuesday, and the jury of nine women and three men was expected to get the case later this week.
Mike Tramontina - Not the first time he's left a mess behind.
Here is a very interesting item that was in the September 24, 2009 issue of Des Moines CityView in their "Civic Skinny" column. Apparently what happened with the Film Office wasn't the first mess that Mike Tramontina had left behind and escaped from.
What it said:
"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."
Apparently Tom Wheeler isn't the guy that prosecutors should really be going after. Tramontina is.
What it said:
"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."
Apparently Tom Wheeler isn't the guy that prosecutors should really be going after. Tramontina is.
Monday, August 29, 2011
UPDATE: Wheeler defends himself against criminal charges
by Rod Boshart/Cedar Rapids Gazette
DES MOINES – Former Iowa Film Office manager Thomas Wheeler testified Monday he was excited about the prospects of managing the state’s new competitive film tax credit program in 2007, but soon was overwhelmed by the “mind-boggling” complexities of contract and tax laws for which he lacked adequate training, help and expertise.
“I thought I knew what I was getting into,” Wheeler told a Polk County jury of nine women and three men during his trial on felony misconduct in office, first-degree fraudulent practices, and conspiracy charges. “In hindsight, it’s clear that I had no idea.”
Wheeler, 42, of Indianola, who has pleaded not guilty to all the charges for which he’s being tried, said he was hired in January 2004 for a film office job that paid $50,000 a year and mostly entailed marketing the state to prospective filmmakers and providing customer service within the state’s tourism division – duties for which he felt qualified and capable of providing.
However, things changed when state lawmakers approved a new state film tax-credit program in 2007 within the state Department of Economic Development 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.
“It seemed pretty straight forward at the time. It turned out to be anything but straight forward. I was terribly wrong,” Wheeler said. “There were tremendous problems and challenges that arose the minute it came into existence until the end.”
For starters, the new law was retroactive to cover some film projects that already were in the works or production had been completed. Also, he said a number of areas of the new law dealing with terms like qualified expenditures, residency, Iowa-based businesses and investors were not clearly defined and it was difficult to find reliable people to clear up the ambiguities.
“At the time, did anybody tell you ‘you’ve got it all wrong?’” in administering the program or interpreting the statute or rules, asked defense attorney Angela Campbell.
No,” Wheeler replied.
Also, Wheeler said he was hit by a “flood” of requests for information and explanations that grew into “tens and tens of thousands” of emails and contract details that exceeded his allotment of DED server space and forced him to spend his own money for computer backup to accommodate the voluminous documentation.
“The program never stopped evolving and the questions never stopped coming in. Even after I was fired there were new questions coming in,” he said.
Campbell produced boxes of receipts from film projects that applied for Iowa film tax credits and phone logs that Wheeler compiled to refute prosecution claims that he withheld documents from his supervisors or engaged in secrecy during his stint as film office manager.
Prosecutors allege that Wheeler, who was fired in September 2009 after an independent audit revealed alleged abuse and mismanagement of the state’s film tax-credit program, acted as “an inside man” to help filmmakers fleece the Iowa treasury for millions of dollars by knowingly altering and substituting public documents and approving false and inflated expenses submitted to his office.
The defense has portrayed Wheeler as a low-level manager with no expertise in the movie industry who was put in charge of an ill-conceived but lucrative new state tax incentive program created by the Legislature to attract filmmakers that “spiraled into a giant mess” due to inadequate staffing, training, direction, oversight and clearly defined program perimeters.
“There were just so many hats to wear. Is there anyone else who could wear some of those hats?” Wheeler said.
The former film office manager said he recalled telling then-DED Director Mike Tramontina that the program was picking up and he needed more staff to handle the crush of requests and documents.
“He cut me off. He said you’re not getting any help. That’s it. I thought that was an unusual thing for him to say,” Wheeler testified.
He said the DED director said the film program was “supposed to be fun. You’re not economic development. You’re fun. You just need to promote this stuff.”
However, former Gov. Chet Culver suspended the film-tax credit program in September 2009 after DED employees raised concerns that credits were being issued for the purchase of luxury vehicles that were later taken to California for personal use. After the scandal broke, six people lost their jobs within the economic development agency, including Wheeler.
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.
Wheeler was slated to continue testifying in his own defense and answering prosecutors cross examination Tuesday in a trial that began Aug. 15 and was expected to go to the jury later this week. District Judge Douglas Staskal excused a woman juror due to illness on Monday and replaced her with one of two women who are serving as alternate jurors.
DES MOINES – Former Iowa Film Office manager Thomas Wheeler testified Monday he was excited about the prospects of managing the state’s new competitive film tax credit program in 2007, but soon was overwhelmed by the “mind-boggling” complexities of contract and tax laws for which he lacked adequate training, help and expertise.
“I thought I knew what I was getting into,” Wheeler told a Polk County jury of nine women and three men during his trial on felony misconduct in office, first-degree fraudulent practices, and conspiracy charges. “In hindsight, it’s clear that I had no idea.”
Wheeler, 42, of Indianola, who has pleaded not guilty to all the charges for which he’s being tried, said he was hired in January 2004 for a film office job that paid $50,000 a year and mostly entailed marketing the state to prospective filmmakers and providing customer service within the state’s tourism division – duties for which he felt qualified and capable of providing.
However, things changed when state lawmakers approved a new state film tax-credit program in 2007 within the state Department of Economic Development 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.
“It seemed pretty straight forward at the time. It turned out to be anything but straight forward. I was terribly wrong,” Wheeler said. “There were tremendous problems and challenges that arose the minute it came into existence until the end.”
For starters, the new law was retroactive to cover some film projects that already were in the works or production had been completed. Also, he said a number of areas of the new law dealing with terms like qualified expenditures, residency, Iowa-based businesses and investors were not clearly defined and it was difficult to find reliable people to clear up the ambiguities.
“At the time, did anybody tell you ‘you’ve got it all wrong?’” in administering the program or interpreting the statute or rules, asked defense attorney Angela Campbell.
No,” Wheeler replied.
Also, Wheeler said he was hit by a “flood” of requests for information and explanations that grew into “tens and tens of thousands” of emails and contract details that exceeded his allotment of DED server space and forced him to spend his own money for computer backup to accommodate the voluminous documentation.
“The program never stopped evolving and the questions never stopped coming in. Even after I was fired there were new questions coming in,” he said.
Campbell produced boxes of receipts from film projects that applied for Iowa film tax credits and phone logs that Wheeler compiled to refute prosecution claims that he withheld documents from his supervisors or engaged in secrecy during his stint as film office manager.
Prosecutors allege that Wheeler, who was fired in September 2009 after an independent audit revealed alleged abuse and mismanagement of the state’s film tax-credit program, acted as “an inside man” to help filmmakers fleece the Iowa treasury for millions of dollars by knowingly altering and substituting public documents and approving false and inflated expenses submitted to his office.
The defense has portrayed Wheeler as a low-level manager with no expertise in the movie industry who was put in charge of an ill-conceived but lucrative new state tax incentive program created by the Legislature to attract filmmakers that “spiraled into a giant mess” due to inadequate staffing, training, direction, oversight and clearly defined program perimeters.
“There were just so many hats to wear. Is there anyone else who could wear some of those hats?” Wheeler said.
The former film office manager said he recalled telling then-DED Director Mike Tramontina that the program was picking up and he needed more staff to handle the crush of requests and documents.
“He cut me off. He said you’re not getting any help. That’s it. I thought that was an unusual thing for him to say,” Wheeler testified.
He said the DED director said the film program was “supposed to be fun. You’re not economic development. You’re fun. You just need to promote this stuff.”
However, former Gov. Chet Culver suspended the film-tax credit program in September 2009 after DED employees raised concerns that credits were being issued for the purchase of luxury vehicles that were later taken to California for personal use. After the scandal broke, six people lost their jobs within the economic development agency, including Wheeler.
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.
Wheeler was slated to continue testifying in his own defense and answering prosecutors cross examination Tuesday in a trial that began Aug. 15 and was expected to go to the jury later this week. District Judge Douglas Staskal excused a woman juror due to illness on Monday and replaced her with one of two women who are serving as alternate jurors.
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?
Friday, August 26, 2011
Tom Wheeler and the "Incompentence" Issue
Two articles in the last two days have brought up the issue of incompetence in regards to Tom Wheeler:
Former IDED Chief: Wheeler wasn't qualified to run incentive program
http://blogs.desmoinesregister.com/dmr/index.php/2011/08/25/former-ided-chief-wheeler-wasnt-qualified-to-run-incentive-program/
Our View - Dialing back the cinematic vision for Iowa
http://www.press-citizen.com/article/20110826/OPINION03/108260303/Our-View-Dialing-back-cinematic-vision-Iowa?odyssey=nav|head
Former IDED Chief: Wheeler wasn't qualified to run incentive program
http://blogs.desmoinesregister.com/dmr/index.php/2011/08/25/former-ided-chief-wheeler-wasnt-qualified-to-run-incentive-program/
Our View - Dialing back the cinematic vision for Iowa
http://www.press-citizen.com/article/20110826/OPINION03/108260303/Our-View-Dialing-back-cinematic-vision-Iowa?odyssey=nav|head
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
Sunday, August 7, 2011
Tom Wheeler trial finally underway
After being delayed 4 times at least, the trial of Tom Wheeler looks like it may be finally beginning, according to this article on WHO-TV's website:
http://www.whotv.com/news/who-story-film-head-court-date-20110804,0,6415666.story
There seems to be a feeling from many people that the idea of this trial is to "throw Tom Wheeler under the bus" and leave higher-ups of his from the Iowa Department of Economic Development (IDED) and members of the Culver administration, including former Governor Chet Culver himself, unscathed by the scandal with total blame assigned to Wheeler. We'll have to stay tuned to see how all of this plays out. Besides the Tom Wheeler trial, there are 3 other known trials that have been reported by the press.
http://www.whotv.com/news/who-story-film-head-court-date-20110804,0,6415666.story
There seems to be a feeling from many people that the idea of this trial is to "throw Tom Wheeler under the bus" and leave higher-ups of his from the Iowa Department of Economic Development (IDED) and members of the Culver administration, including former Governor Chet Culver himself, unscathed by the scandal with total blame assigned to Wheeler. We'll have to stay tuned to see how all of this plays out. Besides the Tom Wheeler trial, there are 3 other known trials that have been reported by the press.
Subscribe to:
Posts (Atom)