By Annie Linskey and William Selway
March 28 (Bloomberg) -- Actor Kevin Spacey glided past the crab balls and filet-mignon skewers at the Red Red Wine Bar in Annapolis, Maryland, as he charmed a roomful of the state’s political elite.
Among the roughly 150 attendees at the March 21 event were Maryland state lawmakers -- real ones, unlike those who appear in Netflix Inc.’s political thriller “House of Cards,” in which Spacey stars as a manipulative powerbroker.
The stakes at the reception are also real: millions of dollars in tax credits that Spacey and the show’s producers are seeking in exchange for filming their Emmy-award-winning television show in the state.
“I’ve heard a lot about how tonight I was going to play the role of the whip,” said Spacey, in a reference to the lawmaker charged in state legislatures and the U.S. Congress with ensuring there are enough votes to pass -- or kill -- proposed legislation before real ones are cast.
In this historic city with cobblestone streets and 18th century brick homes on the shore of the Chesapeake Bay, the “House of Cards” producers are engaging in a lobbying effort that could be cribbed from their own script.
There’s a powerful lobbyist who once served prison time; a threatening Hollywood letter about the consequences of inaction; a bit part for the House speaker’s wife in the show; and thousands of dollars spent to wine and dine the lawmakers with the clout to give the producers and Spacey what they want.
Life Imitating Art
“I don’t know if it’s life imitating art or art imitating life,” said state Senator Paul Pinsky, a Democrat who was the sole state senator to vote against the tax credit. “It offends my sensibilities.”
Almost every state provides tax breaks and other incentives to attract movie and TV production companies, which bring in money that trickles down to set designers, caterers and extras. In Maryland, the pending bill would boost funds available for the tax credit to $18.5 million from $7.5 million for the budget year that starts July 2014.
“House of Cards” is the biggest beneficiary of the credit, according to state data, and stands to receive the largest share of the additional $11 million. The state Senate has approved the increase; the measure will be the focus of a state House of Delegates committee hearing on April 2.
The credit would defray some of the $175 million that the show has spent or plans to spend in the state after filming three seasons of the program, according to the Maryland Department of Business and Economic Development.
The House hearing will come just five days before the state legislature, which meets in Annapolis for 90 days each year, is scheduled to adjourn. That compressed schedule is raising pressure on lawmakers and the “House of Cards” lobbying team to resolve the issue.
During the legislative session, “things move so fast that if you’re not in Annapolis all the time, you absolutely can’t stay on top of what’s going on,” said Jennifer Bevan-Dangel, executive director of Common Cause Maryland, which tracks political giving in the state legislature.
The ability to host receptions, such as the $10,000 gathering at the Red Red Wine Bar, “shows that, while citizens can have their voices heard, well-connected lobbyists and the people who are able to afford them definitely have a leg up in the process,” she said.
“House of Cards” films in a number of Maryland communities. Baltimore’s tony Bolton Hill neighborhood stands in for Georgetown; the Baltimore Sun newsroom represents a fake daily newspaper called the Washington Herald; and the Maryland General Assembly is used to portray the U.S. Senate chamber.
Securing the additional state incentives is no sure thing since the entertainment industry tax credit has an uneven legislative history. Last year, Maryland lawmakers increased the amount to $25 million from $7.5 million for a single year. In 2012, a proposed boost died in the House Ways and Means Committee.
To improve their odds, the show’s producers this time tried toughening their approach by postponing any filming of the third season to June “to ensure there has been a positive outcome of the legislation,” wrote Charlie Goldstein, the senior vice president of Beverly Hills, California-based Media Rights Capital Studios, which owns the show’s production company. The letter was part of submitted testimony at a Feb. 14 House hearing on a similar bill.
“In the event sufficient incentives do not become available, we will have to break down our stage, sets and offices and set up in another state,” Goldstein wrote.
The letter backfired by angering lawmakers. The House of Delegates yesterday passed a measure requiring state officials to use their eminent domain power to seize real and intellectual property from any production company that stops filming after taking more than $10 million in tax credits. At this point, it would apply only to “House of Cards.”
“It was just much more crass than you would expect ‘‘House of Cards’’ writers to engage in,” said Delegate Bill Frick, a Democratic member of the House Ways and Means Committee. Frick sponsored the eminent domain measure, which must still pass the Senate to become law.
Even the show’s lobbyist, Gerard Evans, distanced himself from the letter. “It was unfortunate,” he said. “I think we’ve gotten over that.”
MRC Studios, via its subsidiary Knight Takes King Productions, hired Evans as its Annapolis advocate in March 2012. Netflix declined to comment, referring questions to MRC. Megan Duzi, associate vice president of New York-based Rubenstein Communications, said MRC had no comment.
A profile that appeared in The Baltimore Sun in July 2000 described Evans as “a walking lesson in the insider culture of Annapolis.” The piece appeared days after he was convicted by a federal jury on nine counts of mail fraud for a scheme that involved defrauding his own clients. He spent almost a year at the Federal Correctional Institution in Cumberland, Maryland, according to Chris Burke, a spokesman for the Federal Bureau of Prisons.
After his release, Evans returned to the state capital, where he has been on the list of the Top 10 highest-paid lobbyists since 2007. He earned about $1.2 million in the six months between November 2012 and April, according to state records. Evans said he’s earning about $20,000 for his work on “House of Cards.”
“Whenever you have a political issue it helps to have someone to help navigate the process,” Evans said in an interview. “Every state’s different. I think it’s something that’s essential in Annapolis.”
Evans said Spacey is a natural politician who needed no coaching for the reception at the local wine bar.
“He has a Clintonesque-like quality of connecting with everyone in the room,” Evans said. “I hope he never goes into lobbying. He’d put me out of business.”
Delegate Ron George, a Republican member of the House Ways and Means Committee, is skeptical about whether the millions being spent on the show are the best use of the state’s money.
“Some of the small businesses come to me with all these problems and we’re not willing to give them any kind of a tax break, but we’re doing it for this company that’s from out of state,” he said. “We don’t want it to look like corporate welfare where we’re just helping them to succeed with taxpayer dollars.”
George owns a jewelry store in Annapolis and is a member of the Screen Actors Guild after dabbling in acting. He said the producers invited him to audition for a part as an extra on the show. The request came when he attended an April 2012 steak dinner for members of the House and Senate tax-writing committees that cost $4,000, state lobbying records show.
He declined. “Being in the legislature and getting the part -- that just doesn’t seem right,” he said.
Not everyone shares that reservation. Cynthia Busch, wife of Democratic House Speaker Michael Busch, landed a role as a U.S. senator in the second season. She was paid about $100, and it won’t sway her husband’s vote, Busch spokeswoman Alexandra Hughes said in an e-mail.
“I had a really great experience -- Kevin Spacey, holy smokes,” Cynthia Busch said to WJZ-TV before attending the wine-bar reception last week.