Cluff allegedly misappropriated public funds

Why is the president of the Entertainment Industry Development Corp. using EIDC funds to buy $350 bottles of wine and donate $5,000 to his children’s high school?

Showbizzers have been buzzing about the Sept. 4 raid on the Hollywood offices of the EIDC, a previously anonymous operation created in 1995 to battle runaway production through the merging of L.A.’s city and county film offices.

Court documents allege EIDC prexy Cody Cluff had misappropriated public funds by charging $500,000 of EIDC moneys for travel, concerts, sporting events, bars, restaurants, phone, cable, satellite TV and donations to the school.

“Although one may consider joining the Havana Club a step toward furthering the entertainment industry, it cannot be considered justified spending since the EIDC is a government agency,” DA investigator Kimberly Michael says in the affidavit. No charges have yet been filed.

The question of the EIDC’s status is key. Execs have insisted Cluff’s spending is legal since the EIDC was formed as a private agency to promote local production and expedite handling of permits between producers and the government agencies that actually issue permits.

The EIDC insists that local law enforcement simply doesn’t understand the need to wine, dine and otherwise impress hotshot producers as part of the process of keeping production from fleeing to Prague and Pretoria.

But that’s not the only possibly illegal spending by Cluff & Co., according to the DA’s office. It turns out the EIDC has given $200,000 in campaign contributions to a variety of local candidates, including members of the City Council and county Board of Supervisors — the members of which oversee the EIDC.

The EIDC asserts it needs to support politicians who support showbiz. Still, on Sept. 11, the office quietly pulled the plug on a pair of $500-a-plate fundraisers for Los Angeles Councilman Nick Pacheco and Assemblyman Tony Cardenas.

Court documents also accuse Cluff of perjury in state tax filings when he claimed he did not profit from the EIDC’s activity; the EIDC denies the allegation.

DA Steve Cooley has called on the City Council and the Board of Supervisors to review their oversight of the org, and both bodies have launched legal reviews on whether the EIDC actually is a public entity.

With a very public problem.

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