DES MOINES — Democratic gubernatorial candidate Fred Hubbell led Iowa’s economic development department for just a short time while the state was cleaning up after a scandal over tax credits for movie projects.
But even so, Hubbell was important to the process and provided valuable leadership at the time, according to Iowa Attorney General Tom Miller, also a Democrat.
The significance of Hubbell’s contribution to the film credit cleanup was called into question earlier this month during a debate between the Democratic candidates for Iowa governor on Iowa Public Television.
Hubbell, a Des Moines businessman, throughout his campaign has touted his work in 2009 as interim director of the state’s economic development board at a time when the film credit scandal rocked the state. His campaign has highlighted the experience in a television ad and on the campaign’s website.
“Fred helped clean up the film tax credit scandal,” the ad says. (Last December, The Gazette/KCRG-TV Fact Checker awarded an “A” to two claims in this ad about tax credits for being accurate.)
During this month’s televised debate, fellow Democratic candidate John Norris questioned the extent to which Hubbell was a part of the cleanup effort.
It was one of the rare moments during this mostly passive primary campaign where the candidates have challenged each other’s claims.
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“When Fred took it over, the film tax credit had already been shut down,” Norris said during the debate. “So he stepped in and helped clean it up. No doubt he helped clean it up. I’ll give you credit for that, absolutely. But then after four months when (then-Gov. Chet Culver) asked (Hubbell) to stay on and he said no ... So four months’ experience in (the state economic development department) is hardly a lifetime.”
In September 2009, Culver learned of widespread fraud and abuse in Iowa’s tax credit program for movie projects. Culver shut down the program and accepted the resignation of the state economic development director, whose agency was responsible for awarding the credits.
Eventually the state identified $26 million in improperly used credits and paid out $12.5 million in settlements with production companies, and at least a half-dozen people were convicted of fraud or theft.
Hubbell was, as Norris claimed, appointed interim state economic development director after Culver already had shut down the program. Culver suspended the program on Sept. 18, 2009, and four days later announced Hubbell’s appointment.
Hubbell served as interim director for roughly three months. He was appointed on Sept. 22, 2009, and began his work Oct. 5. A permanent director was named Dec. 28.
The work cleaning up the film credit scandal continued long after Hubbell left his post. The first legal charges were not filed until the following February, and litigation continued for a number of years.
However, Hubbell’s work on the film credit program during his brief tenure as interim economic development director was valuable, according to Miller, who was attorney general at the time and also was heavily involved in the process.
Culver asked the attorney general, auditor and economic development and revenue departments to work together to assess the program.
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Hubbell worked with Miller’s office to identify the tax credits that already had been awarded to movie projects, of which there were hundreds, and decide which to allow to continue, which to cancel and which to take to court.
“I spent a lot of my time working with the attorney general, putting together the facts and working on the legal side as to how we were going to treat all these people,” Hubbell said this month after a campaign event. He described the situation he had walked into as “chaos.”
Miller said Hubbell took control, was a good listener, showed an understanding of complex issues surrounding the scandal and made good decisions.
“The bottom line is that there was a team effort, and that Fred played a very important leadership role on that team,” Miller said. “And you knew he knew what he was doing. This was a guy that understood business and numbers and how to make decisions. That played a key role in resolving this.”
Miller has not publicly endorsed any of the Democrats running for governor. Kevin McCarthy, who recently worked for Miller, works for Hubbell’s campaign.