Iowa filmmakers must release budgets, Iowa Supreme Court says

The Iowa Supreme Court ruled Friday that budget information for movies made under a former tax incentive program must be released to the public.

The court reversed a Polk County District Court judge's decision in 2010 that found the information should be considered confidential trade secrets and could be kept confidential.

Eleven film production companies sued the state to keep private budget summaries they had provided to the state while applying to take advantage of tax credits Iowa offered to moviemakers.

The program was established in 2007 but came under fire when an audit revealed abuses of the program. It was suspended in 2009 by the governor and ended by legislative action in 2010.

A Nebraska video producer, Dennis Brouse, has been sentenced to 10 years in prison for fraudulent practices and the head of the Iowa Film Office, Thomas Wheeler, received probation and a fine for felonious misconduct in office for falsifying public records.

Other producers also have been charged and several entered plea agreements with the state. A state audit of the program found production companies claiming expenses for filmmaking that could not be proven among other irregularities.

Once the program was questioned in the fall of 2009, the Iowa Department of Economic Development, which administered the program, received requests for public records under the state's open records laws from the media and an attorney.

Some companies consented to the release of the information. The 11 filing suit asked the court to prevent information from being released. One producer testified that the state had promised to keep the documents private.

The district court on May 19, 2010, ruled the film budget summaries were confidential trade secrets and should not be released because they could give advantage to competitors and served no public purpose.

"How can the state of Iowa expect to attract new businesses if the businesses cannot rely on the state's word to keep confidential information which, if released, could harm the businesses?" Judge Artis Reis wrote in the May ruling.

The Supreme Court, however, said the producers failed to prove the documents were trade secrets or that their release would give competitors an advantage.

The court made it clear that its ruling was specific to this case, however, and that with different evidence could conclude in other cases that budget summaries for projects awarded state tax credits might be considered trade secrets.

The court also concluded the public does have an interest in knowing how the tax credits were spent.

It said the state awarded about $24 million in tax credits to filmmakers in 2009, "a year in which our state government suffered a shortfall in revenues and endured layoffs and furloughs."

"The public would appear to have an interest in knowing how this money was used," its ruling said. "We adhere to our precedent stating that where 'public funds are involved . . . the public has a right to know how those funds have been spent . . . and how efficiently the funds were spent.' "

Scott M. Brennan, the attorney who argued for the filmmakers, did not immediately return a call.

The Iowa Attorney General's office, which argued for release of the documents, also did not immediately respond to a request for comment.