State department named in two lawsuits related to film tax credit program

Posted on Nov 02, 2009 by charlotteeby.

DES MOINES – The Iowa Department of Economic Development has been named in two lawsuits related to the state’s troubled film tax credit program.

The first lawsuit filed by Iowa Eye Entertainment and four other film production companies said production on the movie they sought to make has been postponed after the tax credit program was suspended.

Their lawsuit said they planned to produce a film in Iowa titled “Clean Out,” which had a cast that included Harvey Keitel, Elliott Gould and Timothy Dalton.

The plaintiffs are seeking a court order that the Iowa Department of Economic Development prepare a written contract that requires the department to issue tax credit certificates of up to $6.5 million based on the production’s qualified expenditures.

The plaintiffs are also alleging a breach of contract and seeking damages.

A second petition filed by Iowa Eye Entertainment is seeking judicial review of what they say is department’s failure to prepare and execute a contract after they entered into an agreement.

A hearing in that matter has been sent for Nov. 9 in Polk County District Court.

The film tax program has been suspended by Gov. Chet Culver, and a criminal probe into the program is ongoing after recording-keeping irregularities were uncovered. Problems with the program came to light when it was discovered that some of the tax credits awarded were used to purchase luxury vehicles.

Tom Wheeler, the former director of the Iowa Film Office, was dismissed and two top officials at the Iowa Department of Economic Development resigned in the wake of problems with the program.

Bob Brammer, spokesman for the Iowa Attorney General’s Office, said they will be defending the state in the matter and had no immediate  comment on the lawsuits.