Monday, September 21, 2009

Iowa Film Tax Credit Program Suspended Top Economic Development Chief Resigns, Film Office Manager Suspended

As the film tax incentive programs around the nation, and world, become increasingly competitive, and critical to the industry, we're committed to keeping you informed about industry developments, including in one of our "competing" states, Iowa. New Mexico has recently launched a program which should prevent similar abuses in our state. -

DES MOINES, Iowa -- Allegations of misspent money from state tax credits has led to the state's director of economic development to resign and Gov. Culver voicing freezing money spent to promote filmmaking in Iowa.

An internal memo dated Wednesday said that the Economic Development Department has been investigating reports of misspent money. Mike Tramontina, who has led the office since 2007, resigned on Friday, effective immediately.

Culver released a statement Friday afternoon announcing Mike Tramontina's resignation.

The news release also said that Culver sent a letter to Robert Boken, the chairman of the Iowa Economic Development Board, saying that he is troubled by information that insufficient procedures were in place to "assure a full and accurate accounting of expenditures made to enable persons to qualify for tax credits" under the state's film, television and promotion program.

Culver has ordered that no further expenditures for the program be approved and that no further tax credit certificates be issued.

The Economic Development Department oversees Iowa's film promotion efforts.

Iowa Film Office manager Tom Wheeler has been put on paid administrative leave. Wheeler has directly overseen the program which has lured at least 20 film productions to Iowa.

An internal memo said questions arose over two luxury cars. Before he resigned, Tramontina wrote, "The Code clearly authorizes the purchase of vehicles but the fact they were luxury vehicles (Mercedes and a Land Rover), were not used directly on the film and the amount of credits claimed was the full purchase price rather than the lease cost during the project were judged to be abuses."

To read the full article, click here.