116 3rd St SE
Cedar Rapids, Iowa 52401
Former Iowa Film Office manager Tom Wheeler was handed a deferred judgment and placed on two years probation Tuesday for his role in the ill-fated film tax credit program that cost the state millions of dollars in inflated claims and improprieties by filmmakers who abused the lucrative incentives.
District Judge Douglas Staskal granted Wheeler's request for leniency by placing him on probation rather than impose the maximum five-year prison sentence the Indianola man faced for his conviction on one felony count of misconduct in office. He also must pay a $750 civil penalty, restitution and court costs and fees.
“Overall it's a fair sentence for the situation, in our opinion,” Wheeler's attorney Angelo Campbell told reporters outside the Polk County courtroom where the sentencing hearing took place. Wheeler declined comments and family members wiped tears after Staskal rendered his sentence.
The judge noted that Wheeler, 42, had no prior criminal record and had not benefitted personally from any criminal activity, but he believed the jury acted appropriately in finding the defendant guilty of wrongdoing in the administration of a film tax credit program where some documents were falsified and oversight of taxpayer money was lax.
“I think the jury was correct with its verdict,” Staskal told Wheeler and his defense team. Before imposing the sentence, the judge denied defense motions seeking acquittal, a new trial and an arrested judgment.
Thomas H. Miller, a deputy Iowa attorney general who prosecuted the case against Wheeler, called the judge's sentence “appropriate exercise of the court's discretion” because there was no evidence that Wheeler was involved in graft. “He's an appropriate candidate for leniency,” the prosecutor said.
Staskal said it appeared that Wheeler got caught up in the allure of Iowa becoming “the Hollywood of the Midwest." In the process, he lost sight of his sense of duty to protect the public's interest by instead becoming an advocate for the film industry and some filmmakers who turned out to be unscrupulous in their pursuit of the nation's most lucrative state tax credits. The credits were part of a now-suspended 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.
A Polk County jury of nine women and three men deliberated for nearly 16 hours over four days before finding Wheeler guilty on Sept. 6 of one count of felonious misconduct in public office in his dealings with Polynation Pictures' application for state film tax credits. The offense is a class D felony carrying a maximum sentence of up to five years in prison and a fine of up to $7,500.
However, jurors said Wheeler was not guilty of three other felony counts of misconduct in public office, four felony counts of first-degree fraudulent practices or one felony count of conspiracy that prosecutors had alleged in the three-week trial. He was acquitted on those eight charges.
State prosecutors 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 three-week trial, 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.
Wheeler, who testified on his own behalf, contended 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, unique and financially attractive tax-credit program.
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.
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.
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.