Film industry members ask Culver to reinstate tax credit program

Despite warnings that “doomsday” is looming for Iowa's film industry, a lead investigator said Thursday a go-slow approach is needed to unravel a complex web of film tax credit activities with “tens of millions” of state tax dollars at stake.

Eric Tabor of the Iowa Attorney General's Office told Iowa Economic Development Board members that state investigators are probing “significant and serious violations of law” associated with the management of the tax credit program that already provided $32 million to 22 projects before it was halted.

Tabor said it appears civil law were not applied correctly, but he declined to discuss the criminal side of the probe and review that involves representatives from the state Division of Criminal Investigation, the Polk County attorney's office, the State Auditor's Office and the Iowa Department of Revenue.

“We're doing all we can to unravel this,” said Tabor, who noted that investigators have seized computers and documents associated with the now-suspended film tax credit program. “Needless to say our office is taking this problem very, very seriously.”

Meanwhile Thursday, film industry members held a Statehouse rally and appealed to Gov. Chet Culver and economic development officials to reinstate the suspended tax credit program before potential economic benefits dry up and more projects exit Iowa for other states still offering incentives.

“As we all know, doomsday in the Iowa film industry is looming. The time for action is now,” said Neil Wells, an actor, director, producer and writer who helped organize Thursday's rally on the Capitol steps and effort to meet face to face with the governor.

“Every day makes a significant difference. Every eyeball is watching,” said Kip Konwiser, a moviemaker who involved with the “Blackbeard” film being produced in Iowa.

Tammy Shutters, program director for the Iowa Motion Picture Association, said the growth in Iowa's film industry spawned by the tax credits were a bright growth area in the Iowa economy that was drawing and keeping young people in Iowa.

She said thousands of hotel room nights that were booked by filmmakers in Des Moines and other communities have been lost along with millions of dollars spent in Iowa since the program has been put on hold. Films like “Cedar Rapids” and other movie projects are shifting from Iowa to other locations and people who came to Iowa expecting work are getting frustrated.

“Our organization strongly feels that this program can be quickly fixed and it needs to be implemented again,” Shutters said. “We feel strongly that it needs to be put back into motion as quickly as possible.”

The state's film, television and video project promotion program was put on hold by Culver following revelations and allegations of lax oversight, sloppy bookkeeping, questionable transactions, and mismanagement came to light last month.

About $32 million in state tax credits had been paid to 22 projects when the program was suspended. Another 26 projects were under signed contract with the state and 109 projects had applied for incentives that provide a 25 percent tax credit to investors and a 25 percent tax credit to producers for projects that spend at least $100,000 in Iowa.

The program was amended effective July 1 to place a $50 million yearly cap on taxpayer outlays and to require filmmakers to have at least a four-year presence in Iowa. The economic development board voted Thursday to halt the rule-making process on the tax credit program pending the outcome of the state probe.

Tabor said state officials understand the desire of filmmakers to expedite the process, but the probe has been slowed by the lack of proper documentation and other concerns.

“The records were not were not well kept and it's been a challenge putting it together,” he said. There is very strong case law in Iowa that when you have a criminal investigation to protect the innocent and to make sure that you find the guilty that you give law enforcement time to review the documents and the relevant materials. We need to let law enforcement do their job.”