Criminal investigation launched into film tax credits
State officials have launched a criminal investigation of the Iowa Film Office tax credit program, the attorney general’s office announced this morning.
“The Attorney General’s Office has found the statute regarding tax credits was not implemented properly in at least several ways: investment tax credits were not calculated according to the statute; expenses were not adequately vetted and verified; projects were not justified in terms of their economic benefit to the state compared to their cost; and the definition of ‘investment’ sometimes was improperly applied,” according to a press release.
The attorney general’s office will undertake the investigation with assistance from the Polk County attorney’s office, the state Division of Criminal Investigation and the state auditor.
All of the approximately $32 million in tax credits that have been issued will be reviewed and the attorney general will “seek recovery wherever they were obtained in violation of the law,” according to the release.
A preliminary outside review of the program has been completed by the West Des Moines accounting firm Clifton Gunderson LLP. That review, which investigated 22 film project files, found:
– Contracts were apparently being changed and not identified as being amended or revised;
– Tax certificates awarded to the investors and producers were transferred to other taxpayers;
– Limited liability companies established as Iowa-based companies could not in certain instances be verified as being registered with the secretary of state as incorporated in Iowa;
– Documentation identifying total expenditures could not be found for certain productions.
Gov. Chet Culver suspended the program on Sept. 18.
To read a copy of the Clifton Gunderson report click here.