LA Film Permit System Investigated for Possible Fraud Almost everyone in the porn industry can relate to this in some degree. Those pesky permits. You know the ones- LA's ritual form of blackmail that keeps the cops off your back. And God forbid if you don't have one. Well you might just get a visit from the constabulary during a shoot and have your tapes impounded. Then you have to go to court. Yadda yadda yadda. And it's a real pain in the ass. Well guess what? All that money you've been paying has gone to support the lavish lifestyle of LA's bureaucrats. The LA Times broke the following story Saturday. Move over Enron and WorldCom. Move over John Rigas. L.A. Film Permit Agency Is Target of Investigation: Lavish spending and political donations by officials of the quasi-public body lead to raids. The Times reports an investigation of the Entertainment Industry Development and its alleged misuse of public funds by lavishing exorbitant tips at restaurants, sending its executives on Caribbean jaunts and donating money to politicians who sit on its board. The Entertainment Industry Development Corp., whose board includes the entire Los Angeles City Council and county Board of Supervisors, gets its $3-million budget from permit fees that would otherwise go to public coffers. An investigation by the district attorney's office, with the assistance of county auditors, led to a Wednesday night search of the agency's offices and the home of its president, Cody Cluff. Financial documents and computer disks were seized. Prosecutors said Cluff, 43, charged $500,000 worth of personal expenses, steered funds to his children's school, and perjured himself on state documents he signed denying that any of EIDC's directors profited from the agency. Cluff's attorney, Tom Brown, said his client and the EIDC have cooperated with investigators. Cluff has done nothing wrong, he said. "EIDC entertains and markets the film industry," Brown said. "We believe that when we've had an opportunity to explain its business and what we've done, both EIDC and Cody Cluff will be fully vindicated." Records show that the agency contributed nearly $200,000 to politicians, including more than a dozen who sat on its board. No charges have been filed. County auditors said the search warrant was sought after the agency refused to turn over financial records this summer. "They've been fighting giving us information," said Pat McMahon, the county's assistant auditor-controller. Auditors found that Cluff, a former deputy mayor under Riordan, received more than $50,000 in direct payments from EIDC to his personal American Express card. Prosecutors found more than $40,000 in charges for Laker basketball games and other sporting and concert events, and $20,000 in cashier's checks from the EIDC to Cluff. Cluff charged the EIDC for his membership in the Grand Havana Room, a Beverly Hills cigar club that lists a $3,000 initiation fee and a $200 monthly charge. Auditors also noted "numerous payments for meals and bar [alcohol] tabs at exclusive restaurants and clubs, often incurred late at night or early in the morning," where Cluff sometimes signed for tips equal to 100% of the bill. Court papers also state that Cluff, who had once worked as an auditor, used $40,000 in EIDC money to pay for trips to Georgia, as well as Utah and France--where two of the world's biggest film festivals, Sundance and Cannes, are held. Prosecutors said Cluff and another EIDC executive traveled to the Caribbean at agency expense. Court papers said the EIDC gave money to the school that Cluff's children attend, and list a $5,000 contribution to Covina High School. The office also paid $341,000 to an Internet company run by one of its 45 board members. State records show that the EIDC has contributed $194,000 to political committees since 1998. The recipients include more than a dozen politicians who at the time were sitting on the group's board. Jackie Goldberg, who represented Hollywood on the Los Angeles City Council and now represents the region in the state Assembly, received at least $15,500, the largest amount. The EIDC also contributed $10,000 to the anti-secession campaign run by Mayor James K. Hahn, an EIDC board member. On Friday, secessionists called for an investigation by the city ethics commission into a possible conflict of interest by Hahn. "It's absolutely appalling," said Gene La Pietra, head of the Hollywood secession effort. Kam Kuwata, Hahn's consultant on the anti-secession campaign, said Friday the mayor solicited the contribution but that there is no conflict.