Report: California Lawmaker Took Payments for Pushing Expanded Production Tax Credit

Califronia Tax Incentives Sacramento Capitol
Justin Sullivan/Getty Images

Al Jazeera America reported on Wednesday that California State Sen. Ron Calderon, one of the key champions of the film production incentive program, was the target of an FBI sting operation in which undercover agents posed as an independent movie executives who provided payments to his family in exchange for the lawmaker lowering the budget threshold for movies eligible for the credit.

Al Jazeera America based its report on a sealed affidavit it obtained an posted on its website. The affidavit was filed in U.S. District Court in Sacramento.

According to the affidavit, the agents asked Calderon to lower the budget threshold from $1 million to $500,000. Calderon agreed to lower it to $500,000, but wanted assurances that they would provide support to his family. Over the course of the sting, which started in 2011, the agents gave $60,000 to Calderon via payments to his two children, according to the affidavit. In one instance, he asked the undercover agents if they would hire his daughter, Jessica, according to the affidavit.

Calderon has not been charged with any crime.

Mario Beltran, a spokesman for Calderon, did not immediately return a request for comment. Calderon’s attorney, Mark Geragos, told the Los Angeles Times, “The only illegal act that is being committed is either by the government or by Al Jazeera. The only illegal act I see is committed either by somebody who released a sealed affidavit or somebody who claims they got a sealed affidavit. Releasing a sealed affidavit is a federal crime.”

Geragos suggested that the allegations in the report were “fabricated and untrue.”

The FBI raided Calderon’s office in June, and initial speculation was that the subject of the investigation was Calderon’s involvement with the Central Basin Municipal Water District. There has been more recent talk in Sacramento that the investigation touched on Calderon’s sponsorship of tax incentive legislation. Calderon chairs the Senate Select Committee on California’s Film and Television Industries.

Gov. Jerry Brown extended the state’s incentive program in 2012, but it did not lower the budget threshold. According to the affidavit, that plan ultimately was stymied when Calderon realized that introducing such an amendment would require a 2/3 vote. “We are screwed!” Calderon wrote to the agent. Instead, he asked Calderon to write a letter to the independent studio’s investor stating his commitment to introducing such a bill, even if it would not get anywhere.

Hollywood studios and labor unions are preparing for a lobbying push to expand the incentive program, and already have had to defend the benefits of the program as producing valuable jobs and not a giveaway to well-heeled studio executives. Incentive programs also have come under scrutiny in states like Iowa, where a corruption scandal involving the state film chief scuttled the program.

Calderon’s nephew, Assemblyman Ian Calderon, along with Assemblyman Raul Bocanegra, held a hearing at SAG AFTRA headquarters earlier this month as they prepared to draw up legislation to expand the state program, which many producers and crew members say is insufficient to compete with other states.

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