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Opinion: Did Iowa tax-break program wrongfully hand out millions to filmmakers?

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Iowa corruption … it’s what’s for dinner.

It might be hard for outsiders to believe, but folks in Iowa aren’t always obsessing over caucuses. Some are focusing on a tale that brings together taxpayer dollars, a heartland state and Hollywood.

Piling onto the woes of the Hawkeye State’s controversial film tax-credit program, the Iowa attorney general’s office has launched a criminal investigation into the program and said it will try to recover millions of tax dollars that may have been wrongfully paid to movie production companies.

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The investigation comes in the wake of questions raised over accounting problems, including allegations that some tax credits were used to pay for luxury vehicles filmmakers never used in their movies. (There’s nothing like picking up a Mercedes and hoping no taxpayers notice that particular line-item in the bill.)

The program, which began in 2007, was one of the most generous tax-credit programs in the nation, an effort to build the local economy on more than corn. It offered a 50% credit on qualified production expenses that the state’s film office bills as 1/2 Price Filmmaking. Since its inception, the program has drawn 22 projects to the state.

‘Approximately $32 million in tax credits have been issued, and we will review them in detail and seek recovery wherever they were obtained in violation of the law,’ the attorney general’s office said in a statement this week.

The agency declined to cite which film projects it was targeting in its investigation, but officials said they have already found ‘several ways’ in which the program was not properly implemented. The violations include credits that were improperly calculated, questionable expenses and film projects that cost the state more than they benefited it. Other whoopsies: Receipts and invoices were available for only two of the 22 film projects, and rampant nepotism led to some moviemaker friends getting more than $300,000 in kickbacks.

The findings were drawn from an internal review of the program released Monday.

Iowa Gov. Chet Culver, who has since suspended the program, was rip-roaring mad over the growing list of wrongdoings. In a statement Monday he said the program was on hold until the Economic Development Board, which operated the program, receives ‘clear direction on the appropriate interpretation of the film program statute and the proper controls and oversight that must be followed.’

--P.J. Huffstutter


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