Will the federal probe into the activities of state Sen. Ronald S. Calderon delay or derail efforts to expand California’s film tax credit program?
That’s the question many in the film industry were privately asking after reports emerged that federal investigators were examining Calderon’s role in seeking tax credits on behalf of the film industry.
Gov. Jerry Brown signed a Calderon bill last year that extended for two years California’s $100 million in annual tax breaks for films and TV shows made in the state.
Calderon allegedly accepted $60,000 in bribes from an undercover FBI agent posing as the owner of an independent film studio, according to a report by the Al Jazeera television network, which cited a sealed federal affidavit. Calderon’s attorney has denied the accuracy of the report.
The studio, called United Pacific Studios, has a few obscure credits listed on the industry website IMDB, but has not pulled any permits, according to Film L.A., which handles film permits for the city and the county.
The Times reported Wednesday that federal investigators, who raided Calderon’s Capitol office in June, also were examining Calderon’s efforts to give tax breaks to productions of less than $1 million. He and family members received a total of $10,800 in campaign contributions from an independent producer who stood to benefit from the change Calderon advocated, The Times reported.
The probe couldn’t come at a worse time for Hollywood. A coalition of entertainment industry unions and studios has been lobbying to expand the state program, funding for which is due to expire in 2015.
“It’s disappointing to me that the FBI picked the film tax credit as the place to create the sting because I’m greatly concerned that people and legislators won’t separate the fiction created by the FBI from the truth that the studios and others have not been a party in bribing a public official to get these tax incentives passed,” said Paul Audley, president of FilmL.A. Inc. “They put at risk the future needs of this industry going forward, because this story is going to be hanging out there as we go before the legislature next year.”
Other film industry and union officials were disheartened by the reports on the FBI probe but noted the investigation was not focused on the film program itself. United Pacific Studios did not receive a tax credit from the state, according to the California Film Commission.
Ed Duffy, business agent for Teamsters Local 399, which represents casting directors, location managers and drivers, said he did not think the scandal would weaken efforts to expand California’s film tax credit program next year.
“It’s not going to affect our mission,” Duffy said. “This is all about jobs for California and for this to have come up ... is just very sad. Still, hopefully we can get by this.”
Complicating matters is that Calderon’s nephew, newly elected state Assemblyman Ian Calderon, has been a strong advocate for beefing up California’s film incentives.
Ian Calderon, who has not been a target of the federal probe, recently co-hosted a meeting at the headquarters of SAG-AFTRA in L.A. to discuss expanding the state’s film tax credit. A spokesman for Ian Calderon could not be reached for comment.
“Anytime you have an FBI scandal that involves a piece of legislation, people are going to step back and take a second look,’' said Ben Golombek, chief of staff for Assemblyman Raul Bocanegra (D-Pacoima), who co-chaired the state Assembly committee meeting. But, Golombek added, “The credibility of the program is strong and nowhere in the report was that questioned.”
L.A. Mayor Eric Garcetti also has strongly supported the effort to help curb so-called runaway production. He recently named industry veteran Tom Sherak as his film czar to help lobby lawmakers do more to keep the industry in California.
In an interview Thursday, Sherak said he was optimistic the scandal would not hurt the industry’s efforts in Sacramento.
“If you have a good idea and it’s an honest idea and it does good for people, I don’t see it being affected,’' Sherak said. “People can tell the difference between a dishonest venture and an honest venture. It’s a righteous cause.”