A New Orleans film producer pleaded guilty Friday to conspiring to bribe Louisiana's former film commissioner for tax breaks meant to lure film projects to the state.

Malcolm Petal, who was chief executive of the Louisiana Institute of Film Technology, was charged Thursday with using attorney William Bradley as the middleman for bribe money paid to former film commissioner Mark Smith.

Smith, who pleaded guilty last year to taking about $65,000 in bribes to help inflate tax credits, is awaiting sentencing and has cooperated with investigators. Bradley also is charged with conspiracy and has a plea hearing scheduled for January.

Petal, 38, was a producer for the films "Bug," "Factory Girl," and "Mr. Brooks," which starred Kevin Costner and was partially filmed in Louisiana.

U.S. Attorney Jim Letten said the investigation has helped "level the playing field" for the film industry in Louisiana, which has marketed itself as "Hollywood South."

"It is going to be very, very difficult now to exploit this type of mechanism again without fear of detection," Letten said following Petal's guilty plea.

In 2002, state lawmakers approved a generous package of tax incentives that turned Louisiana into one of the nation's most popular destinations for filmmakers. With Smith's downfall fueling criticism that the tax breaks were being misused, the Legislature approved a bill designed to tighten the program's eligibility rules.

Letten said Petal's scheme to secure "extremely inflated tax credits" threatened to discourage other producers from bringing film projects here.

"It is a growing industry," he said. "It is extremely important to the state's economy."

A prosecutor said Petal has agreed to pay about $1.3 million in restitution to the state. Petal also faces a maximum of five years in prison and a $250,000 fine. His sentencing by U.S. District Judge Lance Africk is set for Feb. 26.

In December 2003, the state awarded $1.3 million in tax breaks for Break Beat, a company owned by Petal, to film live music festivals. After his company received those breaks, Petal arranged for Bradley to be paid about $135,000, according to prosecutors. Bradley, in turn, allegedly paid $65,000 of that money to Smith.

Bradley and Smith were friends from law school. Prosecutors said influencing Smith was the only reason Petal hired Bradley.

Petal's attorney, Ralph Capitelli, said Break Beat and the Institute, known as LIFT, were separate entities even though his client owned the former company and co-founded the latter.

"The plea did not involve LIFT," Capitelli said. "This is not a LIFT issue, and I think that that's an important distinction."

(Copyright 2008 by The Associated Press. All Rights Reserved.)