The Entertainment Industry Development Corp. has insisted it is innocent in the face of allegations that it has misused public funds.
The EIDC, hit by raids Wednesday on its Hollywood office and the home of its president, contends the criminal investigation is misguided since the EIDC does not receive public funding.
“We are not a public agency,” EIDC VP Morrie Goldman said. “We are an independent advocacy organization to promote the film business in Los Angeles.”
But local law enforcement officials disagree with that interpretation and are conducting investigations through the Los Angeles County District Attorney and the Auditor-Controller. “The EIDC and its president are subjects in a criminal investigation involving misappropriation of public funds and perjury,” said Auditor-Controller J. Tyler McCauley.
No charges have been filed. Sandi Gibbons, spokeswoman for the DA’s office, said the investigation is probably at its midway point and is likely to be far from resolved due to the large volume of material seized in last week’s raids at the EIDC offices in Hollywood and at Cluff’s residence in San Dimas.
EIDC defends spending
Court documents in the case showed $40,000 in spending of EIDC funds by Cluff for Los Angeles Laker games, concerts and other events along with $40,000 in spending for trips to Georgia, Utah and France. The EIDC has contended that such expenditures are appropriate in promoting Los Angeles to producers amid the worldwide competition by hundreds of film commissions.
The EIDC has also contributed about $200,000 to local politicians along with $10,000 to the campaign against secession of the San Fernando Valley from the city of Los Angeles. “We need to demonstrate that the film industry is supportive of officials who support the film business,” Goldman said.
The EIDC was created in 1995 with two goals — to consolidate the city and county film-permitting activities into a single office and battle runaway production from the Los Angeles region. The EIDC holds contracts with the Los Angeles City Council and the Los Angeles County Board of Supervisors.
Acts as middleman
Goldman explained that the EIDC collects permit fees for a variety of government agencies and acts as a go-between organization in helping producers arrange for street closures or access to public properties. “If someone wants to film on a public street, we do not issue the permit — the LAPD does,” he added.
The EIDC charges $450 per permit, which can be used for 10 locations over a two-week period. Its annual budget is about $3 million.
EIDC attorney Theresa Ellis explained that, before the raids, the EIDC and the Auditor-Controller had disagreed over access to documents during the latter’s review of the EIDC contract with the county. The specific area of dispute centered on EIDC documents identifying third parties such as producers and the EIDC’s desire to keep that information private, she added.
Ellis also said that before the raid, the EIDC had offered to provide the documents to the Auditor-Controller either under a confidentiality agreement or by limiting viewing to the EIDC’s offices. “We felt that their request went beyond the scope of the contract,” she said.
Goldman said the EIDC welcomes the involvement of the DA’s office, which is conducting its probe through its Public Integrity division. “We’re hopeful that we’ll be able to work through this real quickly by developing an understanding of the intricacies and uniqueness of the film business in Los Angeles,” he added.