If what I think is hap­pen­ing is hap­pen­ing, it bet­ter not be

Pasatiempo - - The Big Picture -

“Trans­parency. That’s what I want.” State Rep. Den­nis J. Kintigh, R-Roswell, was speak­ing about money mat­ters re­gard­ing the state’s film-in­cen­tive pro­gram. He has tried two years in a row to push for­ward a bill elim­i­nat­ing the in­cen­tives. His bill has been tabled both times, most re­cently in the La­bor and Hu­man Re­sources Com­mit­tee in Jan­uary.

Kintigh says he has a lot of ques­tions about how and where the film-in­cen­tive monies flow. He’s not the only state leg­is­la­tor to voice such con­cerns. Rep­re­sen­ta­tive John Arthur Smith, D-Dem­ing, re­cently said that he is re­ceiv­ing more and more calls from peo­ple in the film in­dus­try about abuses tak­ing place in the name of in­cen­tives. Smith’s SB 235, which he in­tro­duced in late Jan­uary, would cap in­cen­tives at $2 mil­lion per project. (As of press time, the bill had not been heard.)

The New Mex­ico Film Of­fice’s of­fi­cial line is that since the gov­er­nor signed th­ese lu­cra­tive in­cen­tive bills— zero-per­cent in­ter­est loans on qual­i­fy­ing pro­duc­tions, a 25 per­cent tax re­bate deal, and other such at­trac­tions— into law in 2003, the eco­nomic im­pact on the state has been ap­prox­i­mately $3 bil­lion. “In fis­cal year 2009, the state paid $77 mil­lion in re­fund­able tax cred­its [re­bates], which [at 25 per­cent] means pro­duc­tion com­pa­nies would have turned in re­ceipts for $308 mil­lion in di­rect spending on New Mex­ico cast and crew, goods and ser­vices,” said Pahl Ship­ley, head of pub­lic­ity and me­dia re­la­tions for the film of­fice.

Yet as an­a­lysts study the vi­a­bil­ity of film-in­cen­tive pro­grams around the coun­try, more crit­i­cisms pop up. New Eng­land Pub­lic Pol­icy Cen­ter an­a­lyst Jen­nifer Weiner took a crit­i­cal look at New Mex­ico’s highly touted Ernst & Young Study, which showed the state makes $1.50 for ev­ery buck spent; Weiner’s study sug­gested it grossly over­es­ti­mated the fi­nan­cial ben­e­fits of New Mex­ico’s pro­gram. William Luther of the Tax Foun­da­tion has writ­ten an in-depth look at the prob­lems with film-in­cen­tive pro­grams around the coun­try. His re­port is avail­able at the or­ga­ni­za­tion’sWeb site (tax­foun­da­tion.org).

Kintigh, Smith, and other leg­is­la­tors would likely be less in­tent on killing the in­cen­tives if the ac­count­ing prac­tices in­side the film in­dus­try were avail­able to re­view. It’s an open se­cret that the at­tor­ney gen­eral be­gan in­ves­ti­gat­ing New Mex­ico’s film-train­ing pro­gram ( not the same thing as the film-in­cen­tives pro­gram) a cou­ple of years ago. The New Mex­ico Film Of­fice ac­knowl­edged as much to The New Mex­i­can more than a year ago, but the of­fice’s di­rec­tor, Lisa Strout, re­cently stated she knows noth­ing about the par­tic­u­lars of the ef­fort. The New Mex­ico at­tor­ney gen­eral’s of­fice gave a “will not con­firm or deny” re­sponse when queried.

Via a pub­lic records re­quest, I re­viewed film-train­ing doc­u­ments pro­vided by the New Mex­ico Eco­nomic De­vel­op­ment Depart­ment, of which the state film of­fice is part. If I had to come up with a catchy head­line for the doc­u­ments, it would read, “Union head’s gal pal lands $250,000 con­tract to train film­mak­ers.”

The con­tract— signed by and in­volv­ing the Eco­nomic De­vel­op­ment Depart­ment, the state’s tax and rev­enue of­fice, IATSE 480 (the lo­cal film tech­ni­cians’ union), and This Ma­chine Pro­duc­tions— in­volved co­or­di­nat­ing in­struc­tors to teach var­i­ous film crafts, in­clud­ing makeup, set dress­ing, sound, script su­per­vis­ing, and construction. In­struc­tors from This Ma­chine Pro­duc­tions taught three semesters at par­tic­i­pat­ing Film Tech­ni­cians’ Train­ing Pro­gram schools around the state, in­clud­ing Santa Fe Com­mu­nity Col­lege. The pro­gram, bud­geted at $250,000, matched up sea­soned men­tors with trainees who worked mostly on in­de­pen­dent pro­duc­tions and short and stu­dent films.

Jon Hendry is busi­ness agent for IATSE 480. His girl­friend is Lisa Van Allen, who owns and runs This Ma­chine Pro­duc­tions. Her ré­sumé re­veals a busy ca­reer in craft ser­vices for movies, though noth­ing in her back­ground sug­gests she’s qual­i­fied to co­or­di­nate the film-train­ing project. Ac­cord­ing to Van Allen, Strout, and Hendry, Van Allen worked as a vol­un­teer, tak­ing no money for this project.

The film-train­ing in­voices I viewed add up OK but are rife with “fa­cil­i­ta­tion” fees— usu­ally $1,000 or $2,000— to­tal­ing about $53,000. Speak­ing by phone, Van Allen said th­ese fees were paid pri­mar­ily to pro­duc­tion man­agers on var­i­ous train­ing projects (she wouldn’t say who they were but said they didn’t in­clude Hendry or any of her friends); she added that some of th­ese fees were tied to hous­ing or equip­ment re­im­burse­ment. Van Allen said the at­tor­ney gen­eral’s of­fice told her it was in­ves­ti­gat­ing the pro­gram be­cause it had re­ceived a com­plaint; she said she knows noth­ing more.

This is a po­ten­tial con­flict of in­ter­est. Whether Van Allen— who has a con­tract through her com­pany, Duke City Gourmet, with the city of Santa Fe to work as a film li­ai­son— took a fee for the job doesn’t mat­ter; her com­pany pro­cessed all this work and money in just over a year. Did this job give her an “in” when it came to land­ing ca­ter­ing work on sets? She told me she’s aware of the per­cep­tion that, as Hendry’s girl­friend, she is seen as hav­ing an ad­van­tage over other craft-ser­vice com­pany leads.

Stick­ing to the union

Van Allen comes off as a straight shooter, but Hendry has stum­bled be­fore. In 2006, he re­signed as mar­ket­ing di­rec­tor for the state’s Tourism Depart­ment af­ter ques­tions arose about con­flicts of in­ter­est:

Let’s keep it clean

he was also work­ing for IATSE 480 at the time. That action fol­lowed a pub­li­cized event in which film­maker Christo­pher Cop­pola (Fran­cis Ford Cop­pola’s nephew) said Hendry threat­ened to with­hold union la­bor from Cop­pola’s com­pany if Cop­pola didn’t sup­port HB 358. Hendry sup­ported that bill, which would have given an ad­di­tional 5 per­cent tax break— over and above the breaks en­joyed by other com­pa­nies — to Lion’s Gate En­ter­tain­ment, which hoped to gain a foothold in New Mex­ico. And last year some state leg­is­la­tors ac­cused Hendry of “doc­tor­ing” an of­fi­cial leg­isla­tive fi­nan­cial-im­pact re­port in an ef­fort to de­rail Kintigh’s bill. Sev­eral in­de­pen­dent film­mak­ers have also said (mostly on con­di­tion of anonymity, though one, Al­bu­querque film­maker Justin Evans, has writ­ten a blog about it), that Hendry has threat­ened to shut down their pro­duc­tions if they didn’t hire union work­ers. None of this is be­hav­ior be­com­ing of a pro­fes­sional; it makes the en­tire in­dus­try here look bad.

Be­sides Hendry’s union in­volve­ment, he sits on the Gov­er­nor’s Coun­cil on Film and Me­dia In­dus­tries and is one of the chief lob­by­ists for film in New Mex­ico. Visit the film of­fice’sWeb site, and you’ll find he is a con­tact per­son for film­mak­ers seek­ing el­i­gi­bil­ity for in­vest­ment loans for film pro­duc­tions. He also helps run Big House In­sti­tute— a venue for film­mak­ers to bor­row or rent movie-re­lated fur­ni­ture, props, and cos­tumes— out at the old state pen­i­ten­tiary. And Hendry helped start (and still de­fends) the im­po­tent New Mex­ico Film Mu­seum, which has no ex­hibits and no pro­gram­ming bud­get but does have a nice salary for its di­rec­tor, Sharon Maloof, who was ap­pointed to the ex­empt po­si­tion by Gov. Bill Richardson. The film-train­ing pro­gram— which Hendry and other pro-film ad­vo­cates tout as a suc­cess­ful tool for cre­at­ing and main­tain­ing jobs in New Mex­ico— is just a small part of the over­all fi­nan­cial pic­ture here. But if ques­tions arise about that, then doubts could be raised about other el­e­ments of our in­cen­tives pro­gram. No won­der some state law­mak­ers are ques­tion­ing the worth of the over­all pro­gram.

What does this all add up to? I don’t agree with killing the in­cen­tives. I like the com­mon-sense com­ments made by La­bor and Hu­man Re­sources Com­mit­tee chair­man Miguel P. Gar­cia, D-Al­bu­querque, who told Kintigh dur­ing the Jan­uary hear­ing that even when us­ing the slight­est of mul­ti­pli­ers, the film busi­ness must be hav­ing a pos­i­tive fi­nan­cial im­pact on the state. Busi­ness peo­ple in the re­gion — car-rental agen­cies, ho­tel own­ers, res­tau­ra­teurs— claim busi­ness is boom­ing when a movie com­pany uses their ser­vices.

But if law­mak­ers hear that the film in­dus­try is a dirty busi­ness, they’re go­ing to want to kill or cap in­cen­tives. Both The New Mex­i­can and The Al­bu­querque Jour­nal re­cently printed editorials urg­ing state law­mak­ers not to limit in­cen­tives. Both editorials also rightly asked for a clear ac­count­ing of how much the film-in­cen­tives pro­gram costs, how much re­turn we’re get­ting, and who ben­e­fits. Other states are hav­ing ac­count­abil­ity prob­lems too— last year, Iowa’s gov­er­nor Chet Cul­ver or­dered a tem­po­rary halt to his state’s film-in­cen­tive pro­gram af­ter ac­cu­sa­tions of fi­nan­cial mis­ap­pro­pri­a­tion in its film of­fice, and Louisiana had a scan­dal sev­eral years ago in­volv­ing bribes and im­prop­erly han­dled film tax cred­its.

New Mex­ico’s law­mak­ers could re­fo­cus their en­ergy on work­ing with the state au­di­tor and the Tax­a­tion and Rev­enue Depart­ment to en­sure qual­ity con­trol on all fi­nan­cial deal­ings within the film busi­ness. They could also sup­port the at­tor­ney gen­eral’s of­fice in its ef­forts to wade through the con­fu­sion. Per­haps the leg­isla­tive branch can take a more ac­tive role in re­view­ing and rec­om­mend­ing film projects for the state. And if some­body— or a few some­bod­ies— are il­le­gally ben­e­fit­ing from the in­cen­tives, the state should pun­ish them and not the in­cen­tive pro­gram it­self.

IATSE 480 mem­ber Scott Evans dur­ing Film and Me­dia Day (Feb. 5), de­signed to spot­light the im­por­tance of the film in­dus­try in the state

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