Is This Hollywood's Most Dangerous Co-Dependent Relationship?

From left: Carson Kressley, Cesar Canine Cuisine's Tierney Monaco and AHA CEO Robin Ganzert at the 2011 Hero Dog Awards.

The Hollywood Reporter has learned that the Industry Advancement and Cooperative Fund ordered an audit of its American Humane Association grant. Sources say the firm's auditor found evidence of deliberate miscoding of timesheets.

The complex association between the AHA and its financial backer, the Industry Advancement and Cooperative Fund — which was set up by SAG-AFTRA and the Alliance of Motion Picture and Television Producers for the specific purpose of acting as the animal welfare organization’s grantor of funds — at times has been strained but always was held intact by mutual need. The AHA relies on a grant from the fund — $2.4 million in the current cycle — to cover the vast majority of its Film & TV Unit’s budget. This was up $400,000 from the previous year. The AHA is the IACF’s biggest recipient by a wide margin. (The next-largest grantee is SAG-AFTRA’s own Indie Outreach Campaign.)

AHA CEO Robin Ganzert has persistently advocated for far more money, arguing that there’s been a steady increase in total shoots requiring the organization’s coverage, and that runaway production means growing travel expenditures for monitoring. But the IACF’s board of trustees historically has been reluctant to give much more to the organization.

THR has learned that the IACF ordered an audit of its AHA grant, which began in the summer of 2012 through the Westwood-based, entertainment-focused forensic accounting firm Nigro Karlin Segal & Feldstein.

Sources say the firm’s auditor found evidence of deliberate miscoding of timesheets. In all-staff emails surrounding the first Hero Dog Awards in 2011, the AHA asked its Film & TV Unit employees to code their many hours spent working on the gala event — which is not part of the IACF’s grant purview — so the fund would have to cover the cost. The AHA says it was a misunderstanding and “we adjusted the financials” to correct the problem.

There have been other questions about the fiduciary wisdom behind certain Film & TV Unit expenditures, among them moving its headquarters several years ago from Sherman Oaks to a larger Studio City space costing $10,000 a month more. “They said it’s visibility,” says a staffer. “But visibility on Ventura Boulevard in the Valley?” About half of that space goes unused by the organization. The AHA says the 2008 recession derailed any expansion plans.

After the audit, the IACF required more detailed information from the AHA but otherwise took no action. After all, Hollywood needs the AHA, too. Without it, the proliferation of on-set animal injuries and deaths over the years might long since have led to legislative intervention. And it’s hard to imagine the industry wanting the USDA placing its federal inspectors on productions, tasked with writing transparent published reports of their daily findings easily viewable online by the public and funded by a tax on the productions.

According to sources, the IACF receives quarterly reports from the Film & TV Unit that feature detailed metrics pertaining to what sets have been covered and which disclaimers have been issued. Trustees, who meet twice a year, do not review the material with an eye toward mission efficacy, only financial return on investment. One general principle is at play, though.

“The trustees don’t like publicity and they don’t like anything controversial,” says a person with knowledge of the IACF board. “They would rather just bury something — especially a controversial issue like animals getting harmed on sets!” Adds a former IACF trustee: “Morality doesn’t seem to be a major factor [in decision-making].”

This story first appeared in the Dec. 6 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.