“Disaster” is the word an Academy of Motion Picture Arts and Sciences executive used in describing for me the current state of this year’s competition for Best Documentary Feature. Yes, there’s trouble in River City and this is after new rules were put into place in January that were meant to democratize the process. Every year it seems one branch or another in the Academy creates major controversies, and this year it is again the Documentary branch’s turn in the hot seat. And we haven’t even seen the list of nominees yet, so fasten your seat belts.

Those new rules, as first reported on Deadline at the time, changed the nomination voting process. Instead of several groups of small mysterious committees each watching a set number of films, the whole documentary branch now has the opportunity to see and vote on every eligible film. Then final voting is opened up to the entire Academy to be pick a winner — just as they do on Best Picture and other categories. The new rules also attempted to trim the number of entries, specifically targeting films not really meant for theatrical release by requiring a one-week run in New York and Los Angeles as well as a review in either the New York Times or Los Angeles Times. This was seen as a way to discourage TV documentaries or vanity projects from getting into a race designed for movies that are truly meant for theaters first. HBO was a culprit, and now others are jumping into the docu world including today’s announcement regarding a new documentary unit from CNN.

The new system hasn’t worked out the way its main architect, Oscar-winning documentarian and Academy Doc branch Governor Michael Moore, envisioned, and he is the first to agree at least part of it has been a disaster. “I told them (the Academy) to use that word”, he said. “It’s a miserable failure.” Moore, who serves with co-governors Rob Epstein and Michael Apted, said this after branch members, who had already received a steady but manageable stream of movies to view on DVD through the first 9 months of the year, suddenly had about 80 new titles dumped on their doorsteps with only a month to go before ballots for the first wave of voting are due. The list will be whittled to 15 semifinalists in November followed in early January by the final five nominees sent to the entire membership. Moore during the last week has floated some ideas of strengthening the rules, but after talking with Academy CEO Dawn Hudson and COO Ric Robertson this weekend, he is thinking the best idea may be to go back and not have any rules (other than the standard ones imposed by the Academy) and to put the special-needs documentary branch on even footing with other Academy branches.

He agrees something went terribly wrong with the process this time.

“Our hope was  that it would be spread out through the year. The first quarter we got 10 which was kind of cool. I had to watch one a week. The second quarter, another 8 or 10, the third quarter another 8 or 10 and now the fourth quarter 82″, Moore said. “It takes your breath away when you open the box. You open it and sifting through you have seen some of them. There were some great documentaries this year, but it’s lost in this sea of stuff. It’s like a 5 PM  Friday document drop they will do in the government. So many pages, you’ll be so overwhelmed by it you won’t really see the needle in the haystack.” He added that everyone on the documentary executive committee unanimously supported the idea to open up the process for all voters with what he terms “rule #1”.  But with the second part, “rule #2” regarding eligibility, it careened out of control.

Moore lays at least part of the blame on the idea of requiring a review by the NYT or LAT, particularly the latter, which agreed to review 17 titles from Docu Weeks — a two-week film festival in Los Angeles and New York run by the International Documentary Association, which charges a $20,000 entry fee. Moore says it is not a legitimate theatrical release but rather a way of skirting the rules. IDA’s Michael Lumpkin admitted in an LA Times story last week, “the event’s primary function is to provide the selected movies with a platform to qualify for the Academy Awards”.

Moore sees this kind of thing as “gaming the system” and says it’s something another committee member Kirby Dick warned him at the time might be the case. “Kirby said to me, ‘Mike, this is very altruistic of you, but the people who have been scamming the system by trying to get a nomination when they aren’t really a theatrically produced movie have always found a way around the rules, and whatever new rule will come up they will find a way around that’. And they did,”  Moore said.

He says the big mistake was letting the LA Times into the process (which, like the New York Times, both reported on the situation last week although neither mentioned they were a big part of the problem). Moore says it could have been avoided had he stuck exclusively with the NY Times, which has a policy to review every film that is a “legitimate” release in the Manhattan area but nothing else including festival films, etc. He says the other way distributors are getting around the rules is to four-wall certain theaters, essentially buying themselves a bogus theatrical release by paying roughly the same amount it would cost to participate in Docu Weeks to rent a screen.

One idea Moore has floated for discussion at the upcoming November 2 meeting of his committee is to create a list of legitimate theaters where docus can play in order to be eligible and to disqualify any film that “buys” a screen to make the list of those eligible for nomination. However, a CEO of a top independent theater chain who is also involved heavily in promoting documentaries told me today that idea just won’t fly. “First they are in the business of making movies, then picking movies, and now they want to book the movies too?”  he asked incredulously about the Academy. “Just continue making movies and we will continue booking them ourselves. What the Academy needs to do is fix the broken process in the documentary committee or just get out of the doc business altogether.”

Moore, who merely floated that as a potential idea along with another that would require a film to have a minimum of $20,000 gross at the box office, says the Academy is firmly behind honoring nonfiction films now and for the foreseeable future. “I can tell you sitting on the Board of Governors that there is widespread support within the other branches for non-fiction  filmmaking. We are not a marketing agency here and not concerned how we can improve the profits of these multi-national corporations that own these studios. Where we come together as artists is to support, and preserve and advance the art form. That’s why the Academy exists,”  he said. Moore adds there is much support in the Academy to actually expand the branch. “You can’t call it an Academy of Motion Picture Arts and Sciences and 5,280 make fiction films versus 170 who do what we do.”

Certainly the system as it is now set up will likely favor the better-known — and -financed — documentaries that can grab a higher profile, like The Weinstein Company’s much-publicized Bully, because not every member will be able to screen all these movies. For that reason, the Academy came up with the idea of sending separate letters to 12 different groups of documentary branch members suggesting (but not firmly requiring) which movies they should focus on watching in the limited time they had. Academy COO Robertson told me the Academy would never play favorites. But even though it is on the honor system, it had to do something knowing that the latest package of 80 films would be too big a mountain for most to climb. Moore claims it wasn’t communicated well and those getting the letters didn’t realize other groups would have different film suggestions. “All 132 films were mentioned the equal number of times, but the mistake the Academy made was it looks like, ‘here’s your box of 80 DVDs, but we really like only these DVDs so watch those’. I told the Academy they should not send this letter. It will cause huge confusion. It also doesn’t pass the smell test. It doesn’t feel right. And it implies you don’t really have to watch all the movies, even though we are sending all the movies. But I got kind of out-voted on that. It only exacerbated what was already a problem,” Moore complained.

Indeed, an executive with one top Oscar-winning distributor of docus, including one that opened in theaters this week, called me last week after the New York Times article mentioned the letters but didn’t bother to clarify the true situation. He wanted to get a copy of the letter, which he misunderstood as targeting specific films over others, and was curious to see where his movie stood.

The new rules have even affected release plans. Sarah Polley’s widely acclaimed new documentary Stories We Tell was a smash hit at the Venice, Telluride and Toronto film festivals in early September and snapped up by Roadside Attractions. With that kind of major momentum coming out of the fall fest circuit, it would seem likely Roadside might have tried to qualify it for the Oscars. But in fact an exec there told me they were actually discouraged by the new rules that require a NYT or LAT review rather than quietly qualifyng it at an outlyng theater as has been the custom in recent years. Roadside thought this would disrupt their formal release plans for the film, which is now being held for a mid-2013 debut instead of making a quick grab at Oscar glory.

“I hate hearing that,” says Moore. “I haven’t seen the film but a couple of friends have and they were really moved by it. Here’s the good news for her film: They are going to release it the way they want to release it and when they do it will be eligible for next year’s Oscars. It’s not like she’s not going to be able to have this. They should release this the best way it is for the film, not to get an Oscar. So much of this discussion lately is about how to get a golden statue as opposed to how do we as documentary filmmakers do a better job making films that people want to come see in a movie theater.”

Not everyone though is upset with the process as it is now playing out. One  Oscar winning documentarian and former Academy Governor told me he is having no trouble getting through the pile of films and welcomes the opportunity despite a busy schedule. “I like it better than the individual committees we used to have where I often didn’t get to vote for the movies I wanted to support because they weren’t the ones sent to me to judge,” he says pointing to higher profile releases like Searching For Sugar Man and the Diana Vreeland doc as personal favorites so far.

Moore says no one wants to go back to “secret committees” or “the Kremlin” as he puts it but still is completely frustrated, and told me yesterday he now thinks the answer may well be not having any special rules at all. “Adding  or changing these rules or quote improving them is counter-intuitive because they’ve been improved like you have painted your wall now seven different colors without stripping the paint. Maybe the idea here is there are no special rules for the documentary branch. Why do we think we’re special? What if we just decided as a Board of Governors that the documentary branch is going to play by the same rules every other branch plays by. Maybe the way to do this is to stop fretting and wringing  our hands and stop  putting filmmakers , who are mostly not well off, in the position where they have to come up with $20,000. No other branch has  to do that to be considered. Let’s quit this and say  the documentary branch is not going to sit at the kids table anymore. We are going to play  the same  as everyone else and we will have our successes and failures on the same level playing field that every other branch has,” he says essentially calling for the documentarians to look out for each other and make wise decisions without a lot of hand-holding to ensure that.

“Let’s just trust our branch  that we know this is an award for theatrically released movies, we are the gatekeepers and the five nominees the other branches  are going to vote on will be five nominees we put out there that are legitimate theatrically released films,”  he says.