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AG opposes East Chicago settlement terms

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Indiana's Attorney General opposes a proposed settlement between the city of East Chicago and a developer regarding riverboat casino revenues because it would grant additional money to that developer at a time when the state is suing to open up the financial books.

East Chicago Mayor George Pabey announced Thursday he negotiated a settlement with East Chicago Second Century Inc. for all future riverboat casino revenues that would have otherwise been paid to Second Century to go directly to the city. East Chicago sued in 2005 to undo a local development agreement entered into by previous Mayor Robert Pastrick that gave a cut of casino money to the for-profit developer - approximately $1.5 million annually.

In 2007, the attorney general intervened, filing a counterclaim and cross-claim seeking imposition of a constructive trust for public benefit and an accounting of the money paid to Second Century. The trial court dismissed the AG's claims and the Indiana Court of Appeals affirmed. The Indiana Supreme Court last year reversed and remanded for further proceedings, allowing the case to proceed.

That led to the AG last summer requesting in a separate civil suit against former Mayor Pastrick that a federal judge, as part of an ongoing federal racketeering case, allow the state to look into the developer's finances and what has been given to officials in East Chicago. Last year, the nonprofit organization Foundations of East Chicago, which also received casino money and is a party to all this litigation, filed a motion to intervene in the federal case. U.S. Senior Judge James Moody hasn't issued a ruling yet in that case.

In a statement released Thursday, Attorney General Greg Zoeller said he opposed any result that would allow additional funds be given to Second Century, which has refused any public review of how it spent more than $16 million it received over 10 years. Zoeller is not involved in the settlement.

The issue for the attorney general is opening the for-profit developer's books and providing an accounting so that the public can see how the money has been spent.

"Forward-looking disclosure is not enough; there must be disclosure going back to the founding of Second Century, created by the Pastrick organization during the period that is subject of our RICO investigation," Zoeller said.

In addition to Second Century relinquishing its claims to future revenues paid from the riverboat, the proposed settlement allows for the city and Second Century to jointly petition the court to distribute funds - approximately $8 to 10 million - held in escrow since the beginning of the litigation. Of the escrowed funds, 54 percent would go to the city and 46 percent would go to Second Century. The settlement agreement will be submitted to the East Chicago Common Council on Monday for approval.

As a result of this litigation, the attorney general supports language in Senate Bill 405 in the General Assembly this session that would create transparency for local development agreement companies and LDA nonprofits that receive casino money. If passed, the bill would require either a for-profit or nonprofit LDA to publicly disclose to the state how it spends the money and who is awarded the funding. SB 405 is currently under consideration by the full House.

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  1. It really doesn't matter what the law IS, if law enforcement refuses to take reports (or take them seriously), if courts refuse to allow unrepresented parties to speak (especially in Small Claims, which is supposedly "informal"). It doesn't matter what the law IS, if constituents are unable to make effective contact or receive any meaningful response from their representatives. Two of our pets were unnecessarily killed; court records reflect that I "abandoned" them. Not so; when I was denied one of them (and my possessions, which by court order I was supposed to be able to remove), I went directly to the court. And earlier, when I tried to have the DV PO extended (it expired while the subject was on probation for violating it), the court denied any extension. The result? Same problems, less than eight hours after expiration. Ironic that the county sheriff was charged (and later pleaded to) with intimidation, but none of his officers seemed interested or capable of taking such a report from a private citizen. When I learned from one officer what I needed to do, I forwarded audio and transcript of one occurrence and my call to law enforcement (before the statute of limitations expired) to the prosecutor's office. I didn't even receive an acknowledgement. Earlier, I'd gone in to the prosecutor's office and been told that the officer's (written) report didn't match what I said occurred. Since I had the audio, I can only say that I have very little faith in Indiana government or law enforcement.

  2. One can only wonder whether Mr. Kimmel was paid for his work by Mr. Burgh ... or whether that bill fell to the citizens of Indiana, many of whom cannot afford attorneys for important matters. It really doesn't take a judge(s) to know that "pavement" can be considered a deadly weapon. It only takes a brain and some education or thought. I'm glad to see the conviction was upheld although sorry to see that the asphalt could even be considered "an issue".

  3. In response to bryanjbrown: thank you for your comment. I am familiar with Paul Ogden (and applaud his assistance to Shirley Justice) and have read of Gary Welsh's (strange) death (and have visited his blog on many occasions). I am not familiar with you (yet). I lived in Kosciusko county, where the sheriff was just removed after pleading in what seems a very "sweetheart" deal. Unfortunately, something NEEDS to change since the attorneys won't (en masse) stand up for ethics (rather making a show to please the "rules" and apparently the judges). I read that many attorneys are underemployed. Seems wisdom would be to cull the herd and get rid of the rotting apples in practice and on the bench, for everyone's sake as well as justice. I'd like to file an attorney complaint, but I have little faith in anything (other than the most flagrant and obvious) resulting in action. My own belief is that if this was medicine, there'd be maimed and injured all over and the carnage caused by "the profession" would be difficult to hide. One can dream ... meanwhile, back to figuring out to file a pro se "motion to dismiss" as well as another court required paper that Indiana is so fond of providing NO resources for (unlike many other states, who don't automatically assume that citizens involved in the court process are scumbags) so that maybe I can get the family law attorney - whose work left me with no settlement, no possessions and resulted in the death of two pets (etc ad nauseum) - to stop abusing the proceedings supplemental and small claims rules and using it as a vehicle for harassment and apparently, amusement.

  4. Been on social security sense sept 2011 2massive strokes open heart surgery and serious ovarian cancer and a blood clot in my lung all in 14 months. Got a letter in may saying that i didn't qualify and it was in form like i just applied ,called social security she said it don't make sense and you are still geting a check in june and i did ,now i get a check from my part D asking for payment for july because there will be no money for my membership, call my prescription coverage part D and confirmed no check will be there.went to social security they didn't want to answer whats going on just said i should of never been on it .no one knows where this letter came from was California im in virginia and been here sense my strokes and vcu filed for my disability i was in the hospital when they did it .It's like it was a error . My ,mothers social security was being handled in that office in California my sister was dealing with it and it had my social security number because she died last year and this letter came out of the same office and it came at the same time i got the letter for my mother benefits for death and they had the same date of being typed just one was on the mail Saturday and one on Monday. . I think it's a mistake and it should been fixed instead there just getting rid of me .i never got a formal letter saying when i was being tsken off.

  5. Employers should not have racially discriminating mind set. It has huge impact on the society what the big players do or don't do in the industry. Background check is conducted just to verify whether information provided by the prospective employee is correct or not. It doesn't have any direct combination with the rejection of the employees. If there is rejection, there should be something effective and full-proof things on the table that may keep the company or the people associated with it in jeopardy.

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