Hawaii Film Blog

Thursday, September 27, 2007

Here Come the Film Tax Credit Scandals

I guess it was inevitable that the gobs of cash and Hollywood glitz brought on by film tax credits would generate scandal sooner or later. Well, recently, the film tax credit programs of two states--Louisiana and Pennsylvania--became marred, respectively, by a corrupt ex-film commissioner taking bribes and a lobbying violation allegation fueled by partisan politics.

Earlier this month in Louisiana, now the number-three state for film production, Mark Smith, former director of the Louisiana Governor's Office of Film and Television Development, pleaded guilty in federal court to accepting cash bribes from a film producer in exchange for approving inflated production expenditure reports. The producer in question is allegedly Malcolm Petal of
LIFT Productions, formerly Louisiana's largest film and television production studio with a slate that included feature films "Bug," "Mr. Brooks," "Premonition," and "Factory Girl." LIFT's plans to construct a $185 million film studio has been put on hold, and the company has laid off most of its staff. Smith apologized for his actions, saying that he took bribes in excess of $67,000 during a time when he was financially vulnerable. He is scheduled to be sentenced on Dec. 5, and faces up to 15 years in prison and $250,000 in fines.

Back east in Pennsylvania, Republican State Senator Jeffrey Piccola has accused two lobbyists of violating the state's lobbying disclosure law by not properly registering as official lobbyists for Lionsgate. Leslie Merrill McCombs and former Democratic Rep. Mike Veon had both lobbied on the studio's behalf to increase Pennsylvania's pot of film tax credits to $75 million, but failed to first register this fact with the state. McCombs defended herself by saying this was a "technical and brief noncompliance" that she later corrected. However, Piccola plans to hire a private investigator to dig further, and has accused the attractive McCombs of using her personal relationship with Governor Rendell to further her tax credit agenda.

Ex-recruiter pleads guilty in LIFT case [Advocate, 9/8/07]
State's film recruiter guilty of taking bribes [Times-Picayune, 9/8/07]
Guv, the blonde & lobbying law [Philly.com, 9/19/07]
2 face investigation for Pa. film-lobbying role [Philadelphia Inquirer, 9/25/07]
GOP hires private eye to probe movie makers' tax breaks [Pittsburgh Post-Gazette, 9/26/07]

Tax Credit Scandal Worries Louisiana Film Industry

Hollywood Returns to Big, Easy Incentives
>> Pennsylvania: Screw Tax Credits, We Give Cash!
>> Beware of Film Scams

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