EIDC Lawyers Quit; Cluff’s Ouster Likely

The Entertainment Industry Development Corp. on Friday ended its strained relationship with its lawyers and has launched a search for a temporary replacement for embattled president Cody Cluff.

Moreover, Cluff’s permanent departure seemed imminent Friday, pending the outcome of negotiations on a severance package and whether the EIDC would help foot his legal bills, sources said.

When reached for comment, Cluff said that he and the organization “have the same objectives in mind, which is for the EIDC to move forward, and I think we are not too far away from an agreement that will allow that to happen. I think the EIDC needs to find a way to move forward and so do I.”

On Friday, the EIDC’s executive committee unanimously accepted the resignations of Los Angeles attorneys George Newhouse and Tom Brown, leaving Cluff, who was put on paid leave two weeks ago, without representation during negotiations over his status with the film agency.

County Supervisor Zev Yaroslavsky described the attorneys’ resignations as a key step toward restoring stability to an organization that has been in turmoil since the Los Angeles district attorney’s investigation into Cluff’s alleged misuse of corporate funds became public three months ago.

In the meantime, EIDC consultant Keith Comrie said he is working with industry representatives, such as the Motion Picture Assn. of America, to find a temporary replacement for Cluff. He said the replacement “would work three to six months at minimum.”

Comrie has been involved in negotiations with Cluff over his status since Nov. 22, when EIDC lawyers said Cluff would defy the executive committee decision to put him on administrative leave. Later that day, Newhouse said Cluff would not report to work, but would take a vacation instead of a leave of absence.

The lawyers’ actions angered several executive committee members, including City Councilwoman Wendy Greuel and Yaroslavsky. Greuel noted that the committee has the power to fire its lawyers, and Yaroslavsky threatened to urge the Board of Supervisors and the City Council to cancel their EIDC contracts, which are the foundation of the agency’s existence, if Cluff defied the committee.

The two contracts give the EIDC the power to coordinate issuance of permits to companies filming movies, TV shows and commercials in Los Angeles County and to promote the county to the entertainment industry.

Greuel said she believes the committee is close to resolving the turmoil.

Brown and Newhouse said they resigned because of differences of opinion with the committee.

Newhouse declined to spell out those differences. He angered some executive committee members last month when he said Mayor James K. Hahn, Yaroslavsky and Greuel had violated their responsibility as EIDC board members when they publicly urged Cluff to take a paid leave.

Newhouse and Brown have also argued that the committee exceeded its power by voting to put Cluff on leave. The attorneys said agency bylaws stipulate that only the full board has the authority to remove the president. After the vote, Brown said Cluff would defy the committee and report to work.

Committee members began to publicly question whether Newhouse and Brown were adequately representing the EIDC.

Since then, Comrie has been negotiating with Newhouse and Cluff on Cluff’s status.

Comrie said he is working directly with Cluff, and that negotiations probably will be completed in time for the committee’s next meeting in about a week. He has declined to reveal details.

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Times staff writer Claudia Eller contributed to this report.