A report released today by the state auditor shows a majority of the tax credits issued under a now defunct film program were improperly approved. Auditor Dave Vaudt says his office reviewed the 22 projects that were issued tax certificates. Vaudt says nearly $32-million of tax credit certificates were issued, but only $6.4 million were properly issued.
Vaudt says the director of the film office at the time did not verify that the requests from the film companies. Vaudt says the department didn’t go through any procedures to verify the validity of the expenditures made by the companies, so things that should not have been part of the tax credits were included. Vaudt says it was a long process as there were 14 different projects that had to be reviewed.
“We went through boxes, and boxes and boxes of financial records in order to do this, as there were 22 films and over 64-million dollars worth of costs that were submitted,” Vaudt says. Governor Chet Culver, a Democrat, shut down the film program in September of 2009 after reports surfaced that the tax credits had been used improperly. Vaudt, a Republican, was asked about the timing of the release of the report the week before the election.
Vaudt says the governor actually requested the investigation, and his office worked in collaboration with the Department of Revenue and the Attorney General’s office. Vaudt says they handled this report like any other and released it once the report was completed. Vaudt is also running for re-election.
Governor Culver’s campaign manager, Donn Stanley issued a statement saying:
“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.”
Culver has said once the existing state commitments are met, the state tax credit program for film and TV productions in Iowa should be shut down. Culver’s Republican opponent, Terry Branstad, has criticized Culver’s handling of the program throughout the campaign.
Branstad’s campaign manager Jeff Boeyink issued a statement saying 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.”
See the entire audit report here: Audit Film Office 10-26