EIDC'S EX-CHIEF CHARGED CLUFF, FORMER ASSISTANT FACE FORGERY, EMBEZZLEMENT COUNTS.

Byline: Beth Barrett Staff Writer

The former head of the scandal-plagued Entertainment Industry Development Corp., was charged Wednesday with 11 felonies, including embezzling more than $150,000 in public funds and forgery over the past seven years.

Cody Cluff, 44, was indicted by the Los Angeles County grand jury after an 18-month-long District Attorney's Office investigation. Cluff's former assistant, Darryl Seif, who still serves as the EIDC's general manager, was indicted on two felony charges.

The indictment returned Tuesday alleged that Cluff embezzled EIDC funds to pay for strip club visits, payments to his children's Covina High School and its football boosters program, personal memberships, a trip to the Dominican Republic and payments to the Pittsburgh Film Office and its director, Dawn Keezer, with whom he was romantically involved.

``The charges revealed today against Cody Cluff and Darryl Seif go a long way to ensure that the taxpayers in Los Angeles County are better served by their public agencies,'' District Attorney Steve Cooley said in a statement.

``We have always maintained that EIDC is a public, not a private, agency. That being said, its mission and purpose are vital to the important film industry here in Los Angeles County.''

Cooley's Public Integrity Division conducted the investigation into the EIDC after learning that hundreds of thousands of dollars was spent in questionable ways, including contributions to political campaigns of Los Angeles city and county officials who served as the agency's directors. The city and county created the EIDC in 1995 to handle filming permits and to try to stem runaway film and television production.

Neither Cluff, who resigned under pressure in December with a severance package worth almost $300,000, nor Seif commented on the charges.

Cluff of San Dimas and Seif, 37, from the Mt. Olympus area, both pleaded not guilty at their arraignment Wednesday. If convicted, Cluff faces up to 14 years and eight months in prison, and Seif faces up to three years and eight months in prison.

The two were charged with forging a Los Angeles Mayor's Office letter Oct. 31, 1997, to obtain badges, as well as with counterfeiting the city's seal on corresponding identification cards. The badges purported to grant arrest powers.

Cluff also was charged with a ``public officer crime,'' for appropriating public money to ``personal use'' between January 1996 and Dec. 21, 2002.

Mark Werksman, Cluff's attorney, said the EIDC is a private corporation, and that he'll argue that all charges alleging misappropriation of public funds be tossed out.

Werksman said prosecutors want to send Cluff to jail ``for some petty infractions,'' because they and elected officials on the EIDC's board were offended by Cluff's aggressive business style, which recognized and catered to the demands of producers in a competitive entertainment market.

``They're accusing Cody of alleged inappropriate expenses in connection with promoting the film industry in Los Angeles, but you have to spend money to promote it,'' Werksman said.

``Film and record producers expect to go to dinner, to the Lakers, to film festivals around the world. He was enormously successful during his tenure. They're trying to kill the goose that laid the golden egg.''

Seif's attorney, John S. Crouchley, called the charges against his client, ``unwarranted and undeserved.''

``Mr. Seif is an honest and law-abiding person, and a hard-working employee of EIDC,'' Crouchley said in a statement.

The details of the charges - including a final tally of the money allegedly embezzled by Cluff - won't be available until the grand jury transcript is unsealed in about two weeks.

``The grand jury's 11-count indictment confirms that the EIDC was seriously mismanaged under the leadership of Cody Cluff,'' Councilwoman Wendy Greuel, an EIDC executive board member, said.

City Controller Laura Chick, who in March found that public officials failed to oversee the EIDC as it spent $1.3 million on entertainment activities and $500,000 on consultants in a two-year period, applauded Cooley's ``tenacious pursuit of the truth.''

``It is unfortunate that individuals who are in important positions of authority would betray the public trust. That is why it is so important to hold such individuals accountable,'' Chick said.

Chick was among 54 grand jury witnesses, which included former Mayor Richard Riordan and a number of current elected officials, during the two-week proceedings.

County investigators last year questioned more than $500,000 in Cluff's expenses, as well as the EIDC contributing tens of thousands of dollars to many of its board members' political campaigns.

Mayor James Hahn, an EIDC executive board member, declined comment.

County Supervisor Michael D. Antonovich, also on EIDC's executive board, said he knew Cluff to be ``honest and forthright'' when he worked for the Riordan administration.

``(I) would be surprised if Cody Cluff deliberately violated the law,'' Antonovich said. ``Now we will wait for the facts, and let the courts decide.''

Werksman defended most of the embezzlement charges, calling the payments cited in the indictment expenses necessary to promote L.A.'s film industry. However, he said he was unfamiliar with the alleged strip club payments.

``This is not about one visit to a strip club,'' Werksman said. ``They didn't like the way he was doing business.''

He said the EIDC payments to Covina High School, which Cluff's children attended, were among several charitable contributions intended to raise the industry's profile in the community.

The money that went to Keezer, her Pittsburgh Film Office and to Film US were part of a national effort to keep movie production in the United States, he added.

The Daily News disclosed in September that the EIDC contributed at least $10,000 over the past two years to help the Pittsburgh Film Office's fund-raising efforts. Search warrant affidavits said those contributions were influenced by Cluff's personal relationship with Keezer.

The affidavit also said Cluff and Keezer created Film US, in which they held leadership positions, to collect funds from the EIDC, and possibly other film offices around the country, for personal use. Keezer was not named in the indictment, and an investigation of the Pittsburgh Film Office by the Allegheny County District Attorney's Office ended in June with no charges being filed.

Cluff was released on a $240,000 bond; and Seif on a $40,000 bond.

The next court appearance is a Sept. 24 pretrial conference before Superior Court Judge William R. Pounders.

The EIDC's corporate attorney, Mark Holscher with O'Melveny & Myers, said the corporation ``fully expected'' the indictments. He said he didn't know whether they would have any impact on Seif's EIDC job.

Holscher said the EIDC officers and staff fully cooperated with the investigation.

The EIDC has instituted ``significant reforms,'' and the county and city both have been paid by the EIDC for the services they have provided.

``It's critical to recognize EIDC's work has been a great success with some 250,000 film-related jobs in Southern California,'' Holscher said. ``The board is committed to preserved those film-related jobs.''

Beth Barrett, [phone]

beth.barrett(at)dailynews.com

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(color) Cody Cluff, the former head of the EIDC, was charged Wednesday with 11 felonies related to the troubled agency.

John McCoy/Staff Photographer