The audit of film office is out; more charges filed

The office of State Auditor Dave Vaudt has this afternoon released its audit of the state film office.  Vaudt, who was in Cedar Rapids this morning for a GOP get-out-the-vote rally, spoke with Radio Iowa reporter Dar Danielson by phone early this afternoon about the audit.

Donn Stanley, Governor Chet Culver’s campaign manager, issued a written statement:

“The Auditor’s report confirms that the quick and decisive action that Governor Culver took more than a year ago was the right thing to do.

“As soon as he found out about the problems at the Iowa Film Office, Governor Culver took immediate action.  As the report acknowledges, the Governor ended the program immediately, fired the head of the Iowa Film Office, and replaced the management at the Iowa Department of Economic Development with strong new leaders.  The Governor also asked the Auditor, Attorney General, Department of Revenue, and the new leadership at IDED to review the program.  And over the last year, IDED acted quickly to protect taxpayers by implementing new safeguards within the Department.

“By acting immediately, instead of waiting for the Auditor to issue this report, the Governor saved taxpayers potentially hundreds of millions of dollars in exposure through this program.  Apparently the Auditor agrees with the steps we have taken since the recommendations in this audit have already been implemented, and then some.

“The only downside about this audit is that it took so long to be issued.  This is one more example of how Dave Vaudt has used his office for political purposes.  When Terry Branstad is in a free-fall in the polls, Vaudt issues this report in a failed attempt to distract and embarrass the Culver Administration one week before the election.

“This audit proves that Chet Culver did the right thing by ending the Iowa Film Tax Credit Program.  This is not going to distract the Governor from continuing to fight to create good jobs, give our children more opportunities, and move Iowa forward.”

Shortly before three o’clock this afternoon, the campaign of Republican gubernatorial candidate Terry Branstad issued a statement:

(URBANDALE) – In response to the state audit showing $26 million in taxpayer funded film tax credits were improperly spent by Chet Culver’s Iowa Film Office, Governor Branstad 2010 campaign manager Jeff Boeyink says this latest episode is another in long line of reasons Iowa needs to return to open, honest government once again:

“This unfortunately is what we have come to expect from the Culver Administration.  The failure to provide adequate oversight to this program is costing Iowa taxpayers tens of millions of dollars.  Chet Culver’s four year history of mismanagement of Iowa government has put Iowa on the wrong path, and with a state budget that is unsustainable.  Terry Branstad is the proven leader and effective manager we need to put the state on a new path for honest, open and stable government.”

UPDATE:  at 4:31 p.m. Attorney General Tom Miller issued a statement, revealing more charges have been filed.

Statement on Film Program Audit
 
(DES MOINES, Iowa)  Attorney General Tom Miller is reviewing the audit report issued this afternoon by Auditor David Vaudt.

Since Governor Chet Culver suspended the Film, Television and Video Production Program (Film Program) on September 18, 2009, Miller and his office, in conjunction with other state agencies, have spent countless hours investigating the Film Office case.

The Attorney General has filed criminal charges against four defendants, including Wendy Weiner, Matthias Saunders, Tom Wheeler, and Zach LeBeau.  Prosecutors have since reached a plea agreement with Mr. LeBeau.  In exchange for his cooperation, the state has withdrawn criminal charges against him.

Because of the Attorney General’s work to revoke 73 registered film projects, the state’s potential liability has been substantially reduced it by approximately $225 million. Miller’s office is also carefully reviewing submissions of expenses by other film projects to determine whether they are verified and substantiated before determining whether they qualify for film tax credits.

Today, based on information released in the audit, Miller’s office filed a lawsuit in Polk County District Court against the five principal individuals and four entities involved in producing or pursuing 15 movie projects, including “The Scientist.”  The civil lawsuit alleges that the defendants conspired to defraud the state out of film tax credits.  The suit seeks a minimum of $5.5 million in damages.  In addition, the lawsuit seeks attorney fee costs, unspecified punitive damages and forfeiture of any property and proceeds related to the defendants’ films.

In reviewing the new state audit report, Miller will carefully review its findings and will pursue any additional appropriate actions and remedies, both civil and criminal, in connection with the Film Program.  New criminal charges are likely. 

“This has been an exhaustive process, and we’re working hard to make sure that not one penny is spent on tax credits unnecessarily,” Miller said.  “We will use the courts to challenge and recover any unjustified or ill-gotten state money,” Miller added.  “We’re also holding those accountable in criminal court, and we expect to pursue more criminal charges and seek justice.”