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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. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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