Corruption Cali style,encrypted donations needed.

[Matthew X]

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.