I’ve previously written here about the new $1.5 billion-plus tax incentive giveaway to Hollywood, and how such tax credits don’t pay for themselves.
But there’s another potential problem with such programs: corruption.
I recently spent three days in Louisiana, which has had perhaps the country’s most generous incentive programs for Hollywood. The state has become, according to the New Orleans Advocate, the nation’s busiest filming locale.
In the process, the Louisiana program has produced things other than films – like federal charges.
A dozen people, including the program’s architect, have faced federal charges. And the Advocate reported Sunday that the FBI is widening an investigation of the film tax credit program. Among the problems; auditors of the program were deceived.
Yeah, sure it’s Louisiana, you say – but don’t think the same thing couldn’t happen here. After all, the charges against State Senator Ron Calderon involved taking bribes from undercover agents whom he thought were independent film producers; their goal was to change the Hollywood tax credit to make themselves eligible for it.
Also: California’s Hollywood program will be based on a jobs-ratio formula that is supposed to give bigger credits for those productions that produce more jobs; such a set-up will create incentives to cheat on claims of how many jobs a production creates. Given Hollywood’s history of creative accounting, it will be important for the state to investigate productions closely.
And if not, I suppose we can always call FBI agents in Louisiana, who are very familiar with such programs.