Eidc City Contract Under Scrutiny

Los Angeles City Councilmembers Wendy Greuel and Alex Padilla intend to introduce a motion to the City Council this week to renegotiate the city's current contract with the Entertainment Industry Development Corp.

The motion, which will be discussed at Tuesday's City Council meeting, comes amid two separate ongoing audits of the film permitting agency, which came under scrutiny after the Los Angeles County District Attorney's Office launched a criminal investigation last year into the practices of the EIDC and its former president Cody Cluff. One financial audit is being conducted by City Controller Laura Chick's office, and a second internal structural and financial audit is being conducted by the firm KPMG.

Greuel's proposed revisions of the contract, which are still being discussed, include tightening up provisions to protect the city's financial interests, narrowing the scope of the contract's indemnification clause, more clearly defining contractual terms, strengthening the process of the EIDC notifying neighborhoods of upcoming filming, revising the description of the EIDC's role and standardizing the EIDC's responsibilities with regard to production companies and to the city.

The motion basically gives notice to the City Attorney's Office and the EIDC of intent to amend the contract.

One studio executive expressed befuddlement over Greuel's motion. "We still have to see what the audits have to say and I would argue that much of the motion is not pertaining to what is in the actual contract. This motion seems to suggest that the EIDC supersedes the city in some manner," said the executive.

"I think that the two are not mutually exclusive," Greuel said, referring to the motion and the two pending audits. "This is something that has been anticipated and expected, and I wanted to begin that process."

In a recent newsletter to the EIDC's board of directors, the executive committee outlined some of its actions in the past few months, the most recent being the hiring of accountant Wayne Gustafson as senior vp finance to develop and manage an improved system of accounting for the EIDC. Also established is another subcommittee — consisting of Greuel, Los Angeles Mayor James Hahn, County Supervisor Zev Yaroslavsky and the MPAA's Melissa Patack — to recommend board structure changes.

The EIDC's next executive committee meeting is scheduled for Feb. 28.