EIDC'S CLUFF READY TO QUIT.

Byline: Beth Barrett Staff Writer

Cody Cluff, the embattled head of the Entertainment Industry Development Corp., said Friday he's ready to quit and sources said a severance package is being negotiated.

``Clearly it's time the organization grew beyond Cody Cluff, and clearly it's time Cody Cluff went forward as well,'' Cluff said in an interview with the Daily News.

The relationship between Cluff, the EIDC's head since it was created from the merger of the city and county's film offices in 1995, and the EIDC's executive board has grown increasingly strained since it was disclosed he's at the center of a criminal investigation by District Attorney Steve Cooley's office.

Sources said Cluff and the EIDC are attempting to work out the terms of his departure, and have discussed a severance package, which could be worth up to seven or eight months of pay based on his years at the quasi-public corporation.

The sticking point in the negotiations has been over a couple of months of severance that Cluff wants beyond what the executive committee is currently prepared to give him, a source said.

Cluff declined to comment on the negotiations. He noted, however, that the EIDC's books currently are being audited, and that his participation in that process could be needed.

Cluff also wants a ``mutual release,'' a fairly standard protection that neither party will sue one another in the future, the sources said.

Cluff was paid $204,000, including benefits and a housing allowance, in 2001.

He said he wants to spare his staff, the executive committee and himself any more pain.

``What's clear is that the relationship between Cody Cluff and the executive committee is not real good now,'' he said. ``It may get better, but it's not going to be healed.

``I've been there a long time with partners and lots of teammates who gave birth to lots of things I think have been beneficial. Those people at EIDC are my family and I love them all.

``It just isn't productive for them, or the organization, or the executive committee or me to continue to go through the turmoil we've been through the last few weeks.''

The EIDC's executive committee - including Mayor James Hahn, City Council President Alex Padilla, council members Wendy Greuel and Jan Perry, and four county supervisors - were briefed on the negotiations by special consultant Keith Comrie on Friday during a closed session at the EIDC's Hollywood office. Comrie declined comment on the negotiations.

Greuel, reacting to Cluff's comments late Friday, said he was helping the EIDC move in the right direction.

``(The EIDC) is bigger than one person,'' Greuel said. ``Cody's recognition of that is an important one.''

Cluff said he believes all the parties share the same commitment to resolve the issues ``as amicably ... and as quickly'' as possible.

Sources said they expect a deal within about a week.

Sources also said Cluff, who took vacation two weeks ago after resisting being put on paid administrative leave Nov. 22, has indicated he has some legal leverage under the EIDC's bylaws, which require full board action for dismissal, as well as possible grounds for defamation claims.

Cluff angered many executive committee members when he refused to take the leave until an audit was finished.

The EIDC's former corporate lawyers said the vote was improper, prompting executive committee members to accuse them of betraying the leadership of the corporation.

On Friday the corporate lawyers - George B. Newhouse Jr. of the law firm Thelen Reid & Priest and Tom Brown with Sheppard, Mullin, Richter & Hampton - resigned.

County Supervisor Zev Yaroslavsky, who previously said the lawyers had ``run amok,'' called the attorneys' resignation ``very constructive.''

Newhouse and Brown said neither will represent Cluff personally.

``It was my decision that EIDC needed a different lawyer that would perhaps better represent them,'' Newhouse said.

Brown added, ``We fulfilled all our services. There was nothing more for us to do under the current thinking of the corporation. It was time to move on.''

Cluff said he is interviewing lawyers to represent him, not because the negotiations are ``adversarial,'' but because of the legal paperwork involved.

Prosecutors investigating Cluff have alleged he misappropriated public funds, and have questioned hundreds of thousands of dollars in expenses. Investigators have raided his homes, EIDC's office, the Pittsburgh Film Office, and the home of its director, Dawn Keezer, to whom Cluff was romantically linked in affidavits, resulting in dozens of boxes of financial documents currently being reviewed.

The EIDC's former corporate lawyers contended the corporation was not public, the crux of the district attorney's case. Cluff has denied any wrongdoing.

Cluff said Friday he sees his legacy at the EIDC as one of taking filming in Los Angeles to a higher level against stiff competition, particularly Canada. He said better procedures were also adopted to work with the city and county.

``It may be helpful for fresh minds to take a look at those issues ...EIDC needs a way to move on; I need a way to move on.''

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