EIDC Board to Disband in Reform Move

Los Angeles County’s film permitting office took steps Friday to remove all 21 elected officials from its board of directors and prohibit the agency from making political contributions.

The actions by the executive committee of the Entertainment Industry Development Corp. came in the wake of revelations that the agency gave $145,900 in political contributions to board members and others. Many observers deemed that a conflict of interest, and board members came under heavy criticism for failing to properly oversee spending and head off an alleged embezzlement scheme by its former president.

The reforms were recommended “to help restore the credibility of the board and its standing,” said Los Angeles City Councilwoman Wendy Greuel, who headed a panel that drafted the changes.

In addition, the controversial chairman of the board of directors, media executive Frank Scherma, has decided that he will resign from the board, officials said. Los Angeles City Council President Alex Padilla, a member of the executive committee, said removing elected officials from the board was the most important step taken Friday.

“Given what has transpired over the last year and a half ... I think it was the best thing we could have done to restore EIDC to its original intended mission and goal, which is to streamline the permitting process in Los Angeles and promote filming in the region,” Padilla said.

Jim Knox, executive director of California Common Cause, applauded that move and the ban on political contributions. “It is a conflict of interest,” Knox said of agency contributions to board members.

The 49-member board is scheduled to ratify the new bylaws and board structure Dec. 1, effectively voting itself out of existence, resigning and creating a new 32-member board that will elect its own officers.

The current board includes Mayor James K. Hahn, all 15 Los Angeles City Council members and all five members of the county Board of Supervisors.

The EIDC has been embroiled in controversy since the district attorney’s office launched an investigation of the agency last year that turned up evidence of alleged embezzlement by then-President Cody Cluff.

Cluff was indicted Aug. 20 on charges of embezzling $150,000 for travel, visits to strip clubs, country club memberships, yoga classes and other personal expenses.

As the scandal unfolded, many elected officials on the board said they did not know they were on the board and others said they never attended board meetings or voted on spending by the EIDC chief.

The new bylaws recommended Friday would require the next president to get approval from the executive committee for many leases, contracts and expenditures. It also clarifies that the EIDC is a nonprofit public benefit corporation and not a government agency.

The EIDC’s legal status is a key issue in the case against Cluff.

The district attorney’s office has said that the EIDC is a government agency, having taken over the role of processing permits from the city and county, and is therefore prohibited from spending money on political contributions and private luxuries. Cluff’s attorneys have said the agency is a private, nonprofit organization not subject to the same restrictions as a government entity.

Board members said having elected officials on the EIDC board added to the confusion over whether it is a government agency. The executive committee recommended Friday that 10 new seats be designated for neighborhood, business and civic leaders.

“It ensures there is greater community input from those communities impacted by filming,” Greuel said.

The remaining seats will be filled by film industry leaders and union activists.

Scherma, an executive with @radical.media, ends a nearly two-year term as chairman, during which he was criticized for accepting a $340,000 EIDC contract to develop an online permitting system for the agency