D.A. Launches New Searches in EIDC Probe

Investigators for the Los Angeles County district attorney’s office launched another round of early morning searches Thursday in the lengthy investigation of alleged misappropriation of funds by the Entertainment Industry Development Corp. and its former president, Cody Cluff.

Hoping to find film permits and five official city of Los Angeles badges in the possession of EIDC officials, the investigators searched the film permitting agency’s Hollywood Boulevard office, two storage facilities and Cluff’s home in West Covina, said Head Deputy Dist. Atty. David Demerjian.

They found film permits issued from 1997 to 2002 and two city badges, which bear the city seal, in the possession of Cluff and Daryl Seif, the EIDC’s vice president and general manager of operations.

Investigators did not complete their searches Thursday. Sources said they still plan to obtain financial records from “an out-of-city” bank, where the EIDC sent money to an account.

The district attorney’s office is investigating whether the EIDC and Cluff misappropriated the film agency’s funds through lavish expenditures on trips and entertainment and political contributions to elected officials, including more than a dozen who served on the board of directors. The agency coordinates the film permitting process for the Los Angeles city and county governments, and promotes the area to the entertainment industry.

Thursday’s searches were the second round at the EIDC’s office and at Cluff’s house, the first occurring in September.

“We were fully cooperative,” said Lindsley Parsons Jr., the EIDC’s interim president. He said investigators arrived before the office’s 8 a.m. opening and kept employees waiting outside during the search.

The film permits were found in two storage facilities away from the EIDC offices, Demerjian said. He declined to say why his investigators wanted them.

A source, however, said investigators needed the records to determine whether the EIDC was charging film companies the correct amount for the permits. Under the rate schedule approved by the city and county, film companies are supposed pay $450 for each permit.

Investigators consider the city badges -- police-like shields that come with an identification card -- a crucial find, sources said. The badges bear the words “City of Los Angeles” and identify the holder as a film officer. The identification card identifies the owner as a “public officer,” sources said.

The badges could play a key role in a legal controversy at the heart of the investigation: whether the nonprofit corporation is a public or private entity. Cluff contends the EIDC is a private agency whose funds would not be subject to the scrutiny of the district attorney’s office.

But prosecutors say the EIDC is a public agency in large part because it implements a government function: coordinating the issuance of city and county permits and services to film companies doing shoots at locations outside their studios.

Demerjian strongly hinted at the importance of the badges during an interview Thursday.

“What does a private company need with a city badge?” he asked. “We will also be asking, is there authority for them have them?”

Cluff’s attorney, Mark Werksman, dismissed their significance, calling them “innocuous and trivial material. They are scraping the bottom of the barrel.”

“It would be a gigantic leap to say the badges establish them as public officials,” he said.

Werksman said the investigators did a cursory search of Cluff’s West Covina home and took only the badge and an EIDC parking placard. He said Cluff never used the badge.

“If they had called me and asked me for it, I would have gladly given it to them,” he said.

Sources said investigators also went to Seif’s Hollywood Hills home, but did not search it after he told them that his badge was at the EIDC office. Investigators found it there on his desk.

The EIDC initially received about half a dozen badges in 1995, when the agency was created. That also was the year that controversy over misuse of city badges by holders in several city departments prompted the City Council to adopt a new ordinance restricting their issuance.

Before that ordinance, more than 1,700 badges had been issued to a wide range of city employees, including officials in the parks, environmental affairs and social service departments.

The new city ordinance allows automatic issuance of the badges only to elected officials such as the mayor and City Council members.