Film tax credit fallout continues

Mismanagement of Iowa’s state film tax credit program has led to more personnel changes at the Iowa Department of Economic Development this week. On Monday three longtime employees of the department were dismissed: general counsel Melanie Johnson, Jeff Rossate, and Amy Johnson. The Des Moines Register reported,

Rossate, as division administrator for business development, was the direct boss for film office manager Tom Wheeler. Johnson was Rossate’s No. 2 as the coordinator of the business development division.

The Des Moines Register reported on Saturday that e-mails showed those officials were privy to some of the worst problems facing the film program in the two months before it was suspended.

Amy Johnson had been serving as interim director of the film office before she was dismissed. IDED announced Tuesday that attorney Jessica Montana will be the new interim director of the film office. Montana has worked on IDED’s regulatory assistance team since 2007.

I wonder whether the latest dismissals will complicate the criminal case against Wheeler and two film producers. Wheeler was fired from IDED shortly after the scandal broke, and earlier this month the Iowa Attorney General’s Office charged him with non-felonious misconduct. His defense attorney will now be able to claim that Wheeler’s boss and others knew about problems with the film tax credit program.

No matter what happens with that case, I don’t envy IDED director Bret Mills, who needs to sort out this mess. Mike Tramontina resigned as IDED director when the film tax credit scandal broke, and Fred Hubbell served as interim director of the department until Governor Chet Culver appointed Mills in late December. The Iowa Senate confirmed Mills unanimously this month.

Here’s hoping state legislators will put the film tax credit program out of its misery. A bill is pending to suspend the tax credit until July 2011, but the program was ill-conceived from the beginning and doesn’t deserve to be revived. There are a lot better ways for the state to spend up to $50 million a year.

Meanwhile, the Des Moines Register reports today,

Eleven film companies are suing Iowa’s Department of Economic Development, saying they believe certain documents that have not been released since the scandal broke – including expenses and budgets they reported to the state – should be kept confidential.

Scott Brennan, an attorney for the film companies, said Tuesday there is a difference between public curiosity and public interest in the ongoing probe. His clients believe they were guaranteed “by contract and by statute” that certain trade secrets would be kept secret.

The attorney general’s office and the Register argue that the records – first requested last fall – are public under state law and should remain so because they are of significant public interest. The two sides met in court for the first time Tuesday.

According to a brief filed Tuesday by Michael Giudicessi, the newspaper’s lawyer, “Whether evidenced by the very requests of the Register and other news organizations for access, the suspension of the film tax credit program by the governor’s office, the conducting of an independent audit by the department, the vast and increasing amount of taxpayer dollars involved or the ongoing terminations … it is clear that the public interest is not served by any degree of continuing secrecy.”

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