A spokesman for Blaine Kern Artists is taking issue with a state legislative auditor’s report that says the New Orleans float builder and a movie production company it partnered with took nearly $1 million in movie tax credits that it wasn’t eligible to receive.
The report, released earlier today, says BKA and Louisiana Entertainment and Production may have violated state law by misrepresenting the nature of more than $3.4 million they spent between 2006 and 2009 making a documentary about Mardi Gras in New Orleans.
According to the auditor’s report, more than $3.2 million of that was spent on normal business expenditures—like float building—and was therefore ineligible for movie tax credits under the state’s incentive program.
But BKA spokesman Todd Ragusa says LED was aware of the expenses at the time and signed off on them.
“We don’t think we committed a misrepresentation,” he says. “We gave LED a detailed expense report, and they approved every expense.”
After problems with the movie tax credit program came to light in the mid-2000s, the state tightened the rules governing what kinds of expenses were eligible for credits in 2007. But Ragusa says the Kern documentary was pre-certified under the old rules.
Ragusa also clarified a statement in today’s Daily Report AM that said the documentary, Blaine Kern’s Mardi Gras: Building of the Greatest Free Show on Earth was not produced. Ragusa says it was produced, but it was just never picked up for distribution or aired.
Responding to the report, LED Secretary Stephen Moret suggested the state may go after the $935,111 in tax credits that were awarded to BKA and LEAP—which they later sold for $821,343—but stopped short of accusing the companies of wrongdoing.
“We have zero tolerance for anyone who attempts to misuse Louisiana’s Motion Picture Tax Credit Program or any other State incentive program,” Moret says. “We will be seeking additional evidence relating to the claimed expenditures of the applicant and will contact responsible parties with a repayment demand.”
You can check out the full 89-page report here.
