Corruption Tarnishes Film Incentive Program
Metaire, La. -- Aug. 27, 2008 -- Congressional candidate Jim Harlan demanded today that Steve Scalise release his emails and all meeting notes between him and convicted felon Mark Smith, who was at the center of the LIFT corruption scandal.
Smith, who pleaded guilty to accepting bribes to dole out millions of dollars of inflated tax credits while employed as the state's top recruiter of film productions, is credited with shepherding Louisiana's film tax incentive programs - the program Scalise claims as his legislative baby -- through the state legislature.
"How closely did Scalise work with this crook on the program?" Harlan said. "Did Scalise collude with a corrupt public official to create loopholes so his friends could get rich on the taxpayer dime? Scalise needs to release his communications with Smith so we can all know the truth."
Harlan fully supports the film tax incentive program and wants to help the budding film industry continue to grow in Louisiana.
"We can't afford to let corruption like this taint a growth industry for our state," Harlan said. "This undermines progress in restoring Louisiana's reputation. We need leaders who protect us from people like Smith - not let them write our laws so campaign contributors can rip-off taxpayers."
Smith has been accused of steering millions of dollars of film productions and tax credits to LIFT, a New Orleans production company that was raided by the FBI last year and crumbled under the corruption investigation.
Scalise took thousands of dollars in campaign cash from key players in LIFT, including those who are at the top of the chain in the ongoing federal investigation that is expected to produce more indictments.
Even after the scandal broke last year and threatened to take down Louisiana's film tax incentive program, Scalise accepted large contributions from a tax credit trader who got rich while associated with LIFT's shenanigans.
"If Scalise has nothing to hide, he should let the public see what he and Smith were talking about," said Stephanie Stanley, spokeswoman for Harlan. "Let us all see what they were up to."
LIFT, which failed on its promise to build a large film studio in New Orleans, was the largest benefactor of the state's film incentive program -- collecting several million in tax credits during Smith's tenure.
Malcolm Petal, the co-founder and top executive of LIFT and a key figure in the ongoing federal investigation, gave Scalise $4,500 in campaign cash since 2004. Scalise also collected $1,000 from LIFT and another $2,000 from LIFT co-founder John Anderson.
Petal's buddy and business associate, Will French, who got rich trading and selling millions in film tax credits -- including credits that went to LIFT -- gave Scalise $8,000 in campaign money. Of that, Scalise accepted $4,000 last year after the LIFT indictments came down and after French hired Smith when he left his government job.
"Working together, these guys made off with piles of money based on phony reports Smith made to the state tax program," Stanley said. "People in government knew about the bribery. If this program was Steve's baby, why wasn't he paying closer attention to it? Why didn't he do more to stop it? Was he just looking the other way?"
One thing Scalise did was attempt to write amendments to the film incentive program that loosened oversight and made it easier for the companies like LIFT to collect the tax breaks.
"Was that Smith's suggestion?" Stanley said. "We'd like to know."
After the scandal broke, state lawmakers had to go back and rewrite Scalise's legislation to tighten oversight of the tax credit program, something that should have been done when Scalise first proposed it.
Jim Harlan, an independent-minded, self-made businessman, is committed to ethical government and improving Louisiana's reputation in Washington.
" If Scalise can't avoid corruption on a relatively small film tax incentive program, how can we trust him to handle the multiple billion-dollar federal programs we need for hurricane protection and recovery?" Harlan said. "Scalise's credibility is shot."
