EIDC IS NOT PUBLIC, CITY ATTORNEY RULES.

Byline: Mariel Garza Staff Writer

The Entertainment Industry Development Corp. was set up and remains a private - not public - agency, though the role of city- and county-elected officials on its board of directors has blurred the distinction, City Attorney Rocky Delgadillo ruled Thursday.

The issue is critical to District Attorney Steve Cooley's criminal investigation of the film-location permit agency because of allegations that hundreds of thousands of dollars in fees were given to public officials' political campaigns and spent on lavish expense-account living. The issue likely will have to be resolved in court.

``Clearly, no one was minding the store,'' Delgadillo said, referring to the lack of oversight provided by officials who created the agency in 1995 out of city and county agencies. Part of the EIDC's revenues go to the city and county.

In his report to City Council, Delgadillo concluded that the city ``intended EIDC to operate as a private corporation'' and as such the City Council members and Mayor James Hahn ought to resign from the board.

``We need to take government out of the picture,'' Delgadillo said. ``I recommend all politicians no longer serve on board. This gets us back to original idea of the EIDC, which is to cut red tape.''

The EDIC was created as a way to stop runaway film production and make it easier for producers to film locally.

Delgadillo's opinion directly conflicts with Cooley's contention that the agency is a public entity. Cooley's office is investigating whether the EIDC and its president, Cody Cluff, misused funds - including contribution of thousands of dollars to the political campaigns of its board members.

Delgadillo's report calls for the city to do a fiscal audit of the agency to determine if funds were misused. He also makes four other recommendations to clarify the city's relationship with EIDC:

--Renegotiate the terms of the contracts with the EIDC.

--Provide resources to augment the police department's film-permit review process.

--Instruct city departments to implement written guidelines for filming use permits.

--Clarify that production companies are not required to use EIDC's services.

Since the disclosures, city and county officials have been looking into their relationship with the EIDC and conducting their own reviews.