Audit: $25 million in improper film office credits

AP News
Posted: Oct 26, 2010 3:11 PM
Audit: $25 million in improper film office credits

A state audit released Tuesday has identified more than $25 million in tax credits that were "improperly issued" by the state's now-defunct film office.

State Auditor David Vaudt said his special audit identified more than $15 million in improper tax credits that were issued for spending on film projects and another $10 million improperly issued for investing in movie projects. In all, Vaudt found $25.6 million in improper tax credits.

Vaudt's audit focused on film office manager Tom Wheeler, who was fired by Gov. Chet Culver in September 2009 and is now facing misdemeanor misconduct charges. Several filmmakers have been charged criminally with improperly seeking tax credits.

"Because Mr. Wheeler did not verify expenditures or ensure the expenditures claimed by the production companies meet the requirement of the code of Iowa, excess tax credit certificates were issued," the audit stated.

Wheeler's lawyer, Gordon Fischer of Des Moines, didn't immediately return a telephone call.

The audit also found that some of the unqualified spending "included deferred payments, in-kind expenditures, expenditures for which no proof of payment was provided, expenditures which did not relate directly to production, payments to out-of-state vendors/residents and expenditures which were paid but were not supported by documentation."

Culver suspended the state's film office operation after questions were raised about its operations. Vaudt and Attorney General Tom Miller both launched investigations into the office's operations.

Vaudt's report comes at a sensitive political moment because Republican gubernatorial challenger Terry Branstad has sought to make Culver's handing of the office an issue in the election, which is just one week away.