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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. I will continue to pray that God keeps giving you the strength and courage to keep fighting for what is right and just so you are aware, you are an inspiration to those that are feeling weak and helpless as they are trying to figure out why evil keeps winning. God Bless.....

  2. Some are above the law in Indiana. Some lined up with Lodges have controlled power in the state since the 1920s when the Klan ruled Indiana. Consider the comments at this post and note the international h.q. in Indianapolis. http://www.theindianalawyer.com/human-trafficking-rising-in-indiana/PARAMS/article/42468. Brave journalists need to take this child torturing, above the law and antimarriage cult on just like The Globe courageously took on Cardinal Law. Are there any brave Hoosier journalists?

  3. I am nearing 66 years old..... I have no interest in contacting anyone. All I need to have is a nationality....a REAL Birthday...... the place U was born...... my soul will never be at peace. I have lived my life without identity.... if anyone can help me please contact me.

  4. This is the dissent discussed in the comment below. See comments on that story for an amazing discussion of likely judicial corruption of some kind, the rejection of the rule of law at the very least. http://www.theindianalawyer.com/justices-deny-transfer-to-child-custody-case/PARAMS/article/42774#comment

  5. That means much to me, thank you. My own communion, to which I came in my 30's from a protestant evangelical background, refuses to so affirm me, the Bishop's courtiers all saying, when it matters, that they defer to the state, and trust that the state would not be wrong as to me. (LIttle did I know that is the most common modernist catholic position on the state -- at least when the state acts consistent with the philosophy of the democrat party). I asked my RCC pastor to stand with me before the Examiners after they demanded that I disavow God's law on the record .... he refused, saying the Bishop would not allow it. I filed all of my file in the open in federal court so the Bishop's men could see what had been done ... they refused to look. (But the 7th Cir and federal judge Theresa Springmann gave me the honor of admission after so reading, even though ISC had denied me, rendering me a very rare bird). Such affirmation from a fellow believer as you have done here has been rare for me, and that dearth of solidarity, and the economic pain visited upon my wife and five children, have been the hardest part of the struggle. They did indeed banish me, for life, and so, in substance did the the Diocese, which treated me like a pariah, but thanks to this ezine ... and this is simply amazing to me .... because of this ezine I am not silenced. This ezine allowing us to speak to the corruption that the former chief "justice" left behind, yet embedded in his systems when he retired ... the openness to discuss that corruption (like that revealed in the recent whistleblowing dissent by courageous Justice David and fresh breath of air Chief Justice Rush,) is a great example of the First Amendment at work. I will not be silenced as long as this tree falling in the wood can be heard. The Hoosier Judiciary has deep seated problems, generational corruption, ideological corruption. Many cases demonstrate this. It must be spotlighted. The corrupted system has no hold on me now, none. I have survived their best shots. It is now my time to not be silent. To the Glory of God, and for the good of man's law. (It almost always works that way as to the true law, as I explained the bar examiners -- who refused to follow even their own statutory law and violated core organic law when banishing me for life -- actually revealing themselves to be lawless.)

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