I doubt I will be writing any more blogs or comments about the frozen Iowa film tax credits and the circumstances around them simply because I've said all I have to say about them. Unless something new surfaces from either the film trials or during the next legislative session, I have nothing to add.
I do need to clarify that I am not necessarily totally opposed to film incentives whether they be subsidies or tax rebates. I just think they should be straight forward and understandable to the average Iowa taxpayer with no smoke and mirrors to disguise how they actually work.
I'm sure there are a few people out there who have been wanting me to shut up about this issue, either because they are responsible for how the bill got written or because they think that bringing this issue up will harm the progress of restarting the Iowa Film Office. They will get their wish but this issue shouldn't be totally swept under the rug, because it could cause trouble again if it is ignored. I am surprised that they haven't made their objections known or have made any attempt to correct anything they have issue with. But that is their choice.
I suspect if nothing is done to replace the film tax credits, the legislature will either kill it outright or remove life support so that they can't be used. That is why I make the proposal that they consider making it an actual tax credit - that is, a refund on sales taxes. I think this might make it more palatable to the legislators and give a place for a fresh start with room for upward growth. With the state putting off things like roads and bridges and making cuts to education, I doubt they are going to be too excited to returning to the 50% subsidy they were offering.
We definitely need the Iowa Film Office back no matter what happens and I encourage you to continue sending messages to the governor to encourage that. I do think we need some sort of incentives to encourage producers to shoot in Iowa because without one Iowa is going to be a tough sell. Even if a film does come here, without some sort of incentive producers will not have an incentive (there's that word again) to hire Iowa cast and crew, except for the smallest of jobs.
That's all, unless something new comes up.
Showing posts with label iowa film tax credits. Show all posts
Showing posts with label iowa film tax credits. Show all posts
Thursday, November 10, 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.
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.
Tuesday, August 23, 2011
Interview with Kent Newman from the weekend
There was an interesting interview with Kent Newman, the former president of the Iowa Motion Picture Association (Jay Villwock is the new one) about the current state of Iowa's film industry. It was on KCCI-TV's Newsmakers program.
Here's a link to Part One of the interview:
http://www.youtube.com/watch?v=BDUK1Q6HK7M
and here is link to Part Two:
http://www.youtube.com/watch?v=AyO8MxEzQmA
Here's a link to Part One of the interview:
http://www.youtube.com/watch?v=BDUK1Q6HK7M
and here is link to Part Two:
http://www.youtube.com/watch?v=AyO8MxEzQmA
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, January 16, 2011
What NOT to do with the Iowa Film Incentives
There's been a flurry of activity lately behind the scenes regarding bringing the Iowa Film Incentives back. With the scandals that caused the current program to be suspended there's a strong effort underway to get things right this time. This would be by replacing the current program with a new and improved one. The hope is to eliminate the omissions and remove loopholes that allowed the program to be abused. Many of the steps to take or not take are obvious. But there are a few things to avoid that look good at first glance but are likely to prove troublesome in practice.
Here are some things to avoid doing:
Shifting most of the film credits to higher budget ($25 million and up) productions.
On this surface this idea looks really good. The bigger the production, the more people hired, right? When you look closer to the wide range effects, some problems emerge. Because so much money is at stake on these higher dollar projects producers will tend to cover their bets by hiring already established industry professionals for the more important and high paying positions. For the most part these people will be those from the major production centers (Hollywood and New York, mostly). Because of their proximity to these locals these people are going to have much longer resumes and deeper experience than the average Iowan can hope to get right now. The result of this is that for most Iowans the most likely areas they will be hired for is for the low end and low paying jobs such as Production Assistant or Extra. This would hardly bring in the influx of income that a film program would be expected to bring in.
Smaller productions, although lower paying and requiring closer supervision, do offer a greater chance of advancement than the big films. This can translate into better jobs on the larger budget shows when these people get hired there. It also improves the quality of Iowa's film talent pool making the state a more attractive place to shoot a motion picture or television production.
Another potential benefit of supporting smaller productions is that some of these can be locally originated. If some of these become successes it is possible that some of these producers may want to put down roots, building infrastructure so they can continue to make films in Iowa. Why? Because we as a state supported them, hardly the situation they would find out in L.A.
Big films can be good and they can be exciting but let's not ignore the big producers of tomorrow.
Giving film incentives for using an Iowa-based pass-thru company
A producer can't find the people or equipment they need in Iowa. So they are allowed film credits if they use an Iowa-based pass-thru company to act as a go-between to procure what they need. Sounds like a way of getting things established, doesn't it? Since Iowa doesn't have a sufficient talent pool built up to staff these film jobs the state can still make itself attractive by offering a way around. And therein lies the problem.
Tell me if I'm wrong but isn't the idea of the film incentives to create film employment for Iowans, in addition to the purchase of goods and services - to build an industry, not just to simply bring films into Iowa?
Pass-thru companies are perceived by the public to be a financial shell game - a cheap accounting trick - because, if you look closely, that's exactly what they are - a way of laundering money paid out so that companies can still receive film credits that they would not otherwise receive. Because they are using an Iowa-based go-between to do their procuring of crew and equipment they are rewarded. Outside of the very few Iowans running these pass-thru companies, no Iowans benefit from these transactions.
Instead of training Iowans for important jobs, pass-thru companies allow producers to be still rewarded for not hiring our citizens. Instead of encouraging Iowa-based film support businesses to develop and grow, these pass-thru companies instead
benefit the established players in other states.
Keeping information about films that are set to shoot a secret
While it might be understandable to keep some information about a film production confidential - contracts, casting decisions, budget information (except perhaps that which which involves film credits) - it is not so understandable that the existence of a film and its contact information should be hidden from the Iowa public. Somehow this issue has never come up, but when the typical Iowan, the kind without personal industry connections, finds out about a production being shot, it is already too late. The crew positions are already filled and the film is already cast. The Iowa Film Incentive Program is supposed to give opportunities to all interested Iowans, not just a few select insiders, right?
If any of the above things are included in a new Film Incentive Program there is sure to be trouble ahead and we might not have a chance to recover again.
Here are some things to avoid doing:
Shifting most of the film credits to higher budget ($25 million and up) productions.
On this surface this idea looks really good. The bigger the production, the more people hired, right? When you look closer to the wide range effects, some problems emerge. Because so much money is at stake on these higher dollar projects producers will tend to cover their bets by hiring already established industry professionals for the more important and high paying positions. For the most part these people will be those from the major production centers (Hollywood and New York, mostly). Because of their proximity to these locals these people are going to have much longer resumes and deeper experience than the average Iowan can hope to get right now. The result of this is that for most Iowans the most likely areas they will be hired for is for the low end and low paying jobs such as Production Assistant or Extra. This would hardly bring in the influx of income that a film program would be expected to bring in.
Smaller productions, although lower paying and requiring closer supervision, do offer a greater chance of advancement than the big films. This can translate into better jobs on the larger budget shows when these people get hired there. It also improves the quality of Iowa's film talent pool making the state a more attractive place to shoot a motion picture or television production.
Another potential benefit of supporting smaller productions is that some of these can be locally originated. If some of these become successes it is possible that some of these producers may want to put down roots, building infrastructure so they can continue to make films in Iowa. Why? Because we as a state supported them, hardly the situation they would find out in L.A.
Big films can be good and they can be exciting but let's not ignore the big producers of tomorrow.
Giving film incentives for using an Iowa-based pass-thru company
A producer can't find the people or equipment they need in Iowa. So they are allowed film credits if they use an Iowa-based pass-thru company to act as a go-between to procure what they need. Sounds like a way of getting things established, doesn't it? Since Iowa doesn't have a sufficient talent pool built up to staff these film jobs the state can still make itself attractive by offering a way around. And therein lies the problem.
Tell me if I'm wrong but isn't the idea of the film incentives to create film employment for Iowans, in addition to the purchase of goods and services - to build an industry, not just to simply bring films into Iowa?
Pass-thru companies are perceived by the public to be a financial shell game - a cheap accounting trick - because, if you look closely, that's exactly what they are - a way of laundering money paid out so that companies can still receive film credits that they would not otherwise receive. Because they are using an Iowa-based go-between to do their procuring of crew and equipment they are rewarded. Outside of the very few Iowans running these pass-thru companies, no Iowans benefit from these transactions.
Instead of training Iowans for important jobs, pass-thru companies allow producers to be still rewarded for not hiring our citizens. Instead of encouraging Iowa-based film support businesses to develop and grow, these pass-thru companies instead
benefit the established players in other states.
Keeping information about films that are set to shoot a secret
While it might be understandable to keep some information about a film production confidential - contracts, casting decisions, budget information (except perhaps that which which involves film credits) - it is not so understandable that the existence of a film and its contact information should be hidden from the Iowa public. Somehow this issue has never come up, but when the typical Iowan, the kind without personal industry connections, finds out about a production being shot, it is already too late. The crew positions are already filled and the film is already cast. The Iowa Film Incentive Program is supposed to give opportunities to all interested Iowans, not just a few select insiders, right?
If any of the above things are included in a new Film Incentive Program there is sure to be trouble ahead and we might not have a chance to recover again.
Monday, September 13, 2010
Positive News?
In the Des Moines Register article linked below, candidate for governor, Terry Branstad and others are open to revising the Iowa film credits. Chet Culver. the incumbent, of course is still committed to ending them.
"Branstad, others open to revise film credits"
http://www.desmoinesregister.com/article/20100913/NEWS10/9130317/1007/news05/Branstad-others-open-to-revised-film-credits
One idea mentioned in the article which is troubling if you think about it is to limit the credits to films with "Iowa-type stories" such as "The Bridges of Madison County". This, although it would make sense to legislators who still consider the Film Office to be part of tourism, would not make a lot of sense in regard to the practical realities of attracting film and television productions. In case the legislature hasn't checked, most stories are not set in Iowa and to limit it to this state would limit the films shot here. It would also chase away films that could be shot here because of locations that are similar to other areas of the country. It would set Iowa back even further than it was before the film credits when the only productions that would even consider shooting here were those that needed either a small town location or a farm. Considering the fact that the movie "Aaseamah's Journey" built an Iraqi village set on Iowa land, this idea of limiting film awarded credits to those Iowa-centric stories lacks imagination.
Hopefully the film credits will return, will be written well, and run correctly without any limited ideas hampering their effectiveness like this "Iowa stories only" idea.
"Branstad, others open to revise film credits"
http://www.desmoinesregister.com/article/20100913/NEWS10/9130317/1007/news05/Branstad-others-open-to-revised-film-credits
One idea mentioned in the article which is troubling if you think about it is to limit the credits to films with "Iowa-type stories" such as "The Bridges of Madison County". This, although it would make sense to legislators who still consider the Film Office to be part of tourism, would not make a lot of sense in regard to the practical realities of attracting film and television productions. In case the legislature hasn't checked, most stories are not set in Iowa and to limit it to this state would limit the films shot here. It would also chase away films that could be shot here because of locations that are similar to other areas of the country. It would set Iowa back even further than it was before the film credits when the only productions that would even consider shooting here were those that needed either a small town location or a farm. Considering the fact that the movie "Aaseamah's Journey" built an Iraqi village set on Iowa land, this idea of limiting film awarded credits to those Iowa-centric stories lacks imagination.
Hopefully the film credits will return, will be written well, and run correctly without any limited ideas hampering their effectiveness like this "Iowa stories only" idea.
Tuesday, September 7, 2010
Should Iowa Film Tax Program Get Second Chance?
Here is a news story on KCCI-TV's website about film incentives resuming for existing projects and the general situation. There is a text version of the story along with video for it:
http://www.kcci.com/news/24915843/detail.html
Culver comments in a clip included in the story, "We're not going to be taken for suckers, people unforgivably exploited that program." I ask, did any of the people who got jobs on the films that shot here and got paid for it feel like suckers? Did any of the hotels where film personnel stayed, or local businesses that sold to the films feel like suckers? Governor Culver was obviously sleeping on the job as any problems with the program developed and now that he's been shaken from his slumber he is "hrumpf!" outraged, simply outraged that anyone would dare take advantage of the holes that he and the legislature so nicely provided for them. Rather than admit mistakes and attempt to fix them he would rather freeze and then try to kill the program since it appears too taxing on his intellectual capabilities to find a way to fix the problems and make it work.
http://www.kcci.com/news/24915843/detail.html
Culver comments in a clip included in the story, "We're not going to be taken for suckers, people unforgivably exploited that program." I ask, did any of the people who got jobs on the films that shot here and got paid for it feel like suckers? Did any of the hotels where film personnel stayed, or local businesses that sold to the films feel like suckers? Governor Culver was obviously sleeping on the job as any problems with the program developed and now that he's been shaken from his slumber he is "hrumpf!" outraged, simply outraged that anyone would dare take advantage of the holes that he and the legislature so nicely provided for them. Rather than admit mistakes and attempt to fix them he would rather freeze and then try to kill the program since it appears too taxing on his intellectual capabilities to find a way to fix the problems and make it work.
Iowa "Blacklisted"
Here's a link to a news story on the WOI-TV website where they have talked to Neil Wells:
http://www.woi-tv.com/Global/story.asp?S=13108181
He says that Hollywood has blacklisted Iowa. I doubt it is much of an exaggeration considering how everything has been handled by Governor Culver and other officials.
http://www.woi-tv.com/Global/story.asp?S=13108181
He says that Hollywood has blacklisted Iowa. I doubt it is much of an exaggeration considering how everything has been handled by Governor Culver and other officials.
Monday, September 6, 2010
Film Credits Continue?
Here's a link to a WOI-TV news story about the Iowa Film Tax Credits supposedly continuing for projects already in the pipeline:
http://www.myabc5.com/global/category.asp?c=190187&clipId=5084156&topVideoCatNo=165457&autoStart=true
The big question is, has anyone actually seen any evidence that any production is going to happen? Other than volunteer type productions there hasn't been anything this summer.
http://www.myabc5.com/global/category.asp?c=190187&clipId=5084156&topVideoCatNo=165457&autoStart=true
The big question is, has anyone actually seen any evidence that any production is going to happen? Other than volunteer type productions there hasn't been anything this summer.
Wednesday, August 18, 2010
Are We Doomed? Part 2
Gene just quoted an article from today's Des Moines Register that inferred that Terry Branstad would probably not be supporting film tax credits. Here is a link to the article so you can read it for yourself:
http://www.desmoinesregister.com/article/20100818/NEWS09/8180366/Branstad-would-cut-Iowa-Department-of-Economic-Development
Where does that leave us? Talk about us being between a rock and hard place! If the incumbent is re-elected and a new film bill comes up we know we can probably count on him getting out the old veto pen and Culverizing it. If Tweedledee is the choice, he'll probably be grasping at that same writing instrument. Some choice!
http://www.desmoinesregister.com/article/20100818/NEWS09/8180366/Branstad-would-cut-Iowa-Department-of-Economic-Development
Where does that leave us? Talk about us being between a rock and hard place! If the incumbent is re-elected and a new film bill comes up we know we can probably count on him getting out the old veto pen and Culverizing it. If Tweedledee is the choice, he'll probably be grasping at that same writing instrument. Some choice!
I'm planning to do a symbolic vote myself and do a write-in for Tom Wheeler. At least we know he is for film and it might send a message to both the winner and the loser of the election that we're here and we mean business.
Friday, August 13, 2010
"Get what you need and then get the hell out"
Just got word that a film production company is going to be shooting "pick-up" shots for the movie "Butter" soon at the Iowa State Fair. Pick-up shots, for those unfamiliar with the term, are quick location shots to insert into the rest of the footage. The rest of the footage for this movie is being shot in Louisiana because of the Iowa film credits evaporating after being Culverized. It was originally planned to shoot it in Iowa.
That now makes two films that logically should have been shot here but weren't: "Butter" which concerns the butter cow at the fair, and "Cedar Rapids" which, although its story location is Cedar Rapids, Iowa, was actually shot in Ann Arbor, Michigan with only "pick-up" shots (quick establishing shots) actually being shot in its namesake city.
That now makes two films that logically should have been shot here but weren't: "Butter" which concerns the butter cow at the fair, and "Cedar Rapids" which, although its story location is Cedar Rapids, Iowa, was actually shot in Ann Arbor, Michigan with only "pick-up" shots (quick establishing shots) actually being shot in its namesake city.
Tuesday, August 10, 2010
The Big Question - Will They Return?
Here is a great Letter to the Editor from the creator of this blog that is in The Des Moines Register:
http://www.desmoinesregister.com/article/20100810/OPINION04/8100333/1038/Will-moviemakers-return-to-Iowa?
http://www.desmoinesregister.com/article/20100810/OPINION04/8100333/1038/Will-moviemakers-return-to-Iowa?
Sunday, June 20, 2010
Fade to black? Cutting film tax break misses the big picture
The following editorial (link below) describes New Jersey's governor considering cutting their film tax credit in order to balance the budget. Too bad we didn't get any advanced warning and we didn't get the opportunity to oppose it. Our governor just decided to unilaterally blast it out of the water - Culverize it! - without asking anybody else whether it was a good idea, other that his yes men. Let's work to get a film incentive back in and to get him out.
http://blog.nj.com/njv_editorial_page/2010/06/fade_to_black_cutting_film_tax.html
http://blog.nj.com/njv_editorial_page/2010/06/fade_to_black_cutting_film_tax.html
Friday, June 18, 2010
Michigan film tax incentive keeps cameras rolling at Pixofactor
Last time I checked, still no new film businesses of consequence opening in Iowa. Who says film incentives don't do any good.
Mich. film tax incentive keeps cameras rolling at Pixofactor
http://www.detnews.com/article/20100617/BIZ/6170380/1001/Mich.-film-tax-incentive-keeps-cameras-rolling-at-Pixofactor
Mich. film tax incentive keeps cameras rolling at Pixofactor
http://www.detnews.com/article/20100617/BIZ/6170380/1001/Mich.-film-tax-incentive-keeps-cameras-rolling-at-Pixofactor
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