116 3rd St SE
Cedar Rapids, Iowa 52401
A Polk County jury Tuesday found former Iowa Film Office manager Tom Wheeler guilty of one count of misconduct in public office for his role in the state's ill-fated film tax-credit program.
However, the jury of nine women and three men acquitted him on eight other counts in the three-week trial. The panel had deliberated nearly 16 hours over four days.
Wheeler, 42, of Indianola, had faced four felony counts of misconduct in public office, four felony counts of first-degree fraudulent practices and one count of conspiracy.
No sentencing date was set for Wheeler's one conviction, which is a class D felony which carries a maximum sentence of up to five years in prison and a fine of up to $7,500.
The Iowa Attorney General's Office had brought the charges against Wheeler in the wake of the tax-credit fiasco that exploded when concerns were raised over state tax credits that had been issued to filmmakers for the purchase of luxury vehicles that were later taken to California for personal use.
During the trial that began on Aug. 15, prosecutors portrayed Wheeler as “an inside man” with an inflated sense of self-importance who helped unscrupulous 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 state's attorneys told jurors Wheeler had a duty to verify film projects' eligibility for state tax credits and was the sole person directly responsible to oversee the now-defunct program. They said the former film office director willfully turned a blind eye to fraudulent claims that contained unreasonable expense claims and did not tell a superior that a filmmaker applying for Iowa tax credits under an alias was accused of bank fraud in California.
Wheeler, who testified on his own behalf, contended throughout the three-week trial that he followed the Iowa law and advice given to him by experts in the state's revenue and economic development agencies in administering a complicated and unique program 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.
Wheeler's defense team described him 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. They said Wheeler was an honest and conscientious state employee who did not gain anything financially in the tax-credit fiasco while trying to help foster a rapidly growing film industry in Iowa that stalled when the program was suspended.
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 that were deemed eligible for tax credits prompted former Gov. Chet Culver to suspend the program in September 2009 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 the most-attractive film incentive in the nation. Wheeler testified that interest in the new program triggered a “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.