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SANTA FE — A newly appointed member of the State Investment Council questioned Tuesday whether New Mexico should use an endowment fund to make interest-free loans to films.
Former state Sen. Leonard Lee Rawson, a Las Cruces Republican, voiced his doubts as the council agreed to temporarily extend a contract with a Hollywood lawyer to advise the state on film investments.
The contract with Peter Dekom will be extended through May while the council looks to hire a permanent film adviser through a competitive bidding process.
New Mexico can lend up to $15 million to a film project produced in the state, and Dekom recommends whether the council should approve the investments.
The council last month extended Dekom’s contract through April and he was paid a monthly rate of nearly $15,000 — roughly half of what his previous $350,000-a-year contract provided.
Rawson said he wanted a report analyzing whether the film loans have been a successful investment for the state. He and another council member expressed doubts about the program.
“I don’t know that we have a mandate to stay in film,” said Rawson, who was named to the council last month by the Legislature.
Peter Frank, a board member and retired corporate executive from Santa Fe, said, “We’ve given up a lot of return on our assets.”
Katherine Miller, a board member and secretary of the Department of Finance and Administration, defended the film program, pointing out it was an economically targeted investment with a goal of fostering a film industry in New Mexico.
Gov. Bill Richardson has been a leading advocate of New Mexico’s film incentives, which include tax credits for film production costs.
The state has lent $274 million to about two dozen film and television projects through February, providing nearly 5,000 jobs for New Mexico crew members and direct spending of nearly $270 million, according to council records.
No money has been lost on film loans despite the poor economy, according to Lisa Strout, director of the state film office. One film, “The Book of Eli,” which starred Denzel Washington, could soon turn a profit and potentially provide a return of millions of dollars to New Mexico, she told the council.
Up to 6 percent of the severance tax permanent fund can be used for film loans — about $211 million.
The council is responsible for overseeing the investments of endowment funds valued at about $14 billion.
A new state law expanded the council’s membership, giving the Legislature the ability to appoint four members.
Tuesday’s meeting was the first since the Legislature made its appointments.
The council agreed to keep Steven Moise of Santa Fe as investment officer through June 2011, and pay him $250,000 a year.
Moise was temporarily appointed last month. Moise, a lawyer, served as president of a banking firm specializing in mergers, acquisitions and divestitures. He also ran a family ranching business.