ILNews

State wants detailed audit of corruption money

Michael W. Hoskins
January 1, 2009
Keywords
Back to TopCommentsE-mailPrintBookmark and Share

In the first minutes of a federal court hearing Tuesday, U.S. District Senior Judge James Moody told attorneys he wasn't going to order a state-supervised audit of East Chicago's finances, as the Indiana Attorney General's Office was asking. But his stance may have changed.

Following five hours of testimony and arguments in the civil racketeering case, Judge Moody realized the scope of the action being proposed in the suit against former Mayor Robert Pastrick and top aides - mainly six Pastrick political allies now known as the Sidewalk Six - who've been found civilly liable for running a corrupt enterprise.

Arguing on behalf of the Indiana Attorney General's Office, Chicago attorney Patrick M. Collins - who is acting as a special deputy attorney general - tried to convince Judge Moody that Pastrick and James Fife III could be held liable for more than $100 million in the case targeting the years of corruption that lingers in some form today.

Aside from the sidewalks-for-votes money used in the 1999 primary election, the suit also focuses on the Second Century and the Foundations of East Chicago, for-profit and non-profit recipients, respectively, of casino money. Both are embroiled in ongoing state court litigation as the attorney general and current East Chicago mayor fight to get those organizations to publicly disclose what the casino cash was used for during the Pastrick administration.

In a memorandum for injunctive relief filed June 2, the Attorney General's Office proposed that the State Board of Accounts review and report to the court what the full economic damages have been from the Pastrick corruption. The audit would assess the current financial conditions of East Chicago, the amounts and purposes of casino funds disbursed, and any other structural or systematic problems in the city, the brief stated.

As the hearing opened Tuesday, Judge Moody said he'd reviewed the brief and wasn't going to order an audit because he didn't find enough legal justification, that he wasn't convinced the Attorney General's Office could do it on its own accord, and that he didn't see it justified at such a late stage in this case.

But Collins argued that the start of the remedy phase was the only time that part of the remedy could be used, not during the trial preparation, and that any testimony at trial also could be used in the damages and remedy phase.

The state called five witnesses, including the former city controller Ed Maldonado, who's serving 130 months in prison after his conviction in the criminal Sidewalk Six case. He testified that Pastrick and Fife headed a political machine that misguided millions of dollars; while he signed the checks and knew of the activity, they were ultimately the ones leading the corruption. A state Board of Accounts auditor testified that she'd reviewed the city finances before; however, because casino monies were diverted to for-profit and non-profit trusts or organizations, she couldn't fully see the scope of the Pastrick activity. A former Internal Revenue Service agent and two other city officials also testified about how East Chicago is still recovering from the Pastrick legacy.

"The Pastrick political machine essentially took over the city and ruled it for personal and political gain of Mayor Pastrick," attorney Joel Levin said for the state during closings. "The city was the epitome of a political machine, and politics influenced this city in every way, shape, and form. But Your Honor can do something to unwind that legacy."

Notre Dame University Law School professor G. Robert Blakey, a racketeering law expert who helped draft the Racketeer Influenced and Corrupt Organization Act about four decades ago, told the judge that this is a case of first impression nationally. The judge is basically able to do anything he wants as allowed under the expansive RICO statute, Blakey said. He asked the judge to order a forensic audit - one that goes beyond the numbers and includes interviews and extensive research - to determine how the casino money was used under Pastrick's agreement. That could reveal the extent of damages that should be repaid to taxpayers, he said.

Blakey urged the judge to consider all remedial options possible under the RICO statute, including the use of liens, a trustee, constructive trust, or asset forfeiture. Typical antitrust cases have used inspection audits, and that could be ordered here also, he said.

"There's something about a federal court," Blakey said. "People pay a lot of attention to a federal court order. What we're asking is that you do justice ... for the people of East Chicago."

While Pastrick didn't appear Tuesday, his attorney Michael W. Bosch represented him in court and Fife represented himself. Neither presented specific arguments, but they did question specific aspects of the state's case during witness testimony.

Bosch said during closing the state has given the former mayor "a free pass," and that Pastrick should be held responsible for nominal damages.

"You get a buck," he said. "Triple that, you get three bucks."

Attorneys have until June 22 to file their findings of fact and conclusions, and Judge Moody will then consider what happens next.

More coverage about this case can be found in the June 10-23, 2009, issue of Indiana Lawyer.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. California Sex Offender Management Board (CASOMB) End of Year Report 2014. (page 13) Under the current system many local registering agencies are challenged just keeping up with registration paperwork. It takes an hour or more to process each registrant, the majority of whom are low risk offenders. As a result law enforcement cannot monitor higher risk offenders more intensively in the community due to the sheer numbers on the registry. Some of the consequences of lengthy and unnecessary registration requirements actually destabilize the life’s of registrants and those -such as families- whose lives are often substantially impacted. Such consequences are thought to raise levels of known risk factors while providing no discernible benefit in terms of community safety. The full report is available online at. http://www.casomb.org/index.cfm?pid=231 National Institute of Justice (NIJ) US Department of Justice Office of Justice Programs United States of America. The overall conclusion is that Megan’s law has had no demonstrated effect on sexual offenses in New Jersey, calling into question the justification for start-up and operational costs. Megan’s Law has had no effect on time to first rearrest for known sex offenders and has not reduced sexual reoffending. Neither has it had an impact on the type of sexual reoffense or first-time sexual offense. The study also found that the law had not reduced the number of victims of sexual offenses. The full report is available online at. https://www.ncjrs.gov/app/publications/abstract.aspx? ID=247350 The University of Chicago Press for The Booth School of Business of the University of Chicago and The University of Chicago Law School Article DOI: 10.1086/658483 Conclusion. The data in these three data sets do not strongly support the effectiveness of sex offender registries. The national panel data do not show a significant decrease in the rate of rape or the arrest rate for sexual abuse after implementation of a registry via the Internet. The BJS data that tracked individual sex offenders after their release in 1994 did not show that registration had a significantly negative effect on recidivism. And the D.C. crime data do not show that knowing the location of sex offenders by census block can help protect the locations of sexual abuse. This pattern of noneffectiveness across the data sets does not support the conclusion that sex offender registries are successful in meeting their objectives of increasing public safety and lowering recidivism rates. The full report is available online at. http://www.jstor.org/stable/full/10.1086/658483 These are not isolated conclusions but are the same outcomes in the majority of conclusions and reports on this subject from multiple government agencies and throughout the academic community. People, including the media and other organizations should not rely on and reiterate the statements and opinions of the legislators or other people as to the need for these laws because of the high recidivism rates and the high risk offenders pose to the public which simply is not true and is pure hyperbole and fiction. They should rely on facts and data collected and submitted in reports from the leading authorities and credible experts in the fields such as the following. California Sex Offender Management Board (CASOMB) Sex offender recidivism rate for a new sex offense is 0.8% (page 30) The full report is available online at http://www.cdcr.ca.gov/Adult_Research_Branch/Research_Documents/2014_Outcome_Evaluation_Report_7-6-2015.pdf California Sex Offender Management Board (CASOMB) (page 38) Sex offender recidivism rate for a new sex offense is 1.8% The full report is available online at. http://www.google.com/url?sa= t&source=web&cd=1&ved= 0CCEQFjAA&url=http%3A%2F% 2Fwww.cdcr.ca.gov%2FAdult_ Research_Branch%2FResearch_ documents%2FOutcome_ evaluation_Report_2013.pdf&ei= C9dSVePNF8HfoATX-IBo&usg=AFQjCNE9I6ueHz-o2mZUnuxLPTyiRdjDsQ Bureau of Justice Statistics 5 PERCENT OF SEX OFFENDERS REARRESTED FOR ANOTHER SEX CRIME WITHIN 3 YEARS OF PRISON RELEASE WASHINGTON, D.C. Within 3 years following their 1994 state prison release, 5.3 percent of sex offenders (men who had committed rape or sexual assault) were rearrested for another sex crime, the Justice Department’s Bureau of Justice Statistics (BJS) announced today. The full report is available online at. http://www.bjs.gov/content/pub/press/rsorp94pr.cfm Document title; A Model of Static and Dynamic Sex Offender Risk Assessment Author: Robert J. McGrath, Michael P. Lasher, Georgia F. Cumming Document No.: 236217 Date Received: October 2011 Award Number: 2008-DD-BX-0013 Findings: Study of 759 adult male offenders under community supervision Re-arrest rate: 4.6% after 3-year follow-up The sexual re-offense rates for the 746 released in 2005 are much lower than what many in the public have been led to expect or believe. These low re-offense rates appear to contradict a conventional wisdom that sex offenders have very high sexual re-offense rates. The full report is available online at. https://www.ncjrs.gov/pdffiles1/nij/grants/236217.pdf Document Title: SEX OFFENDER SENTENCING IN WASHINGTON STATE: RECIDIVISM RATES BY: Washington State Institute For Public Policy. A study of 4,091 sex offenders either released from prison or community supervision form 1994 to 1998 and examined for 5 years Findings: Sex Crime Recidivism Rate: 2.7% Link to Report: http://www.oncefallen.com/files/Washington_SO_Recid_2005.pdf Document Title: Indiana’s Recidivism Rates Decline for Third Consecutive Year BY: Indiana Department of Correction 2009. The recidivism rate for sex offenders returning on a new sex offense was 1.05%, one of the lowest in the nation. In a time when sex offenders continue to face additional post-release requirements that often result in their return to prison for violating technical rules such as registration and residency restrictions, the instances of sex offenders returning to prison due to the commitment of a new sex crime is extremely low. Findings: sex offenders returning on a new sex offense was 1.05% Link to Report: http://www.in.gov/idoc/files/RecidivismRelease.pdf Once again, These are not isolated conclusions but are the same outcomes in the majority of reports on this subject from multiple government agencies and throughout the academic community. No one can doubt that child sexual abuse is traumatic and devastating. The question is not whether the state has an interest in preventing such harm, but whether current laws are effective in doing so. Megan’s law is a failure and is destroying families and their children’s lives and is costing tax payers millions upon millions of dollars. The following is just one example of the estimated cost just to implement SORNA which many states refused to do. From Justice Policy Institute. Estimated cost to implement SORNA Here are some of the estimates made in 2009 expressed in 2014 current dollars: California, $66M; Florida, $34M; Illinois, $24M; New York, $35M; Pennsylvania, $22M; Texas, $44M. In 2014 dollars, Virginia’s estimate for implementation was $14M, and the annual operating cost after that would be $10M. For the US, the total is $547M. That’s over half a billion dollars – every year – for something that doesn’t work. http://www.justicepolicy.org/images/upload/08-08_FAC_SORNACosts_JJ.pdf. Attempting to use under-reporting to justify the existence of the registry is another myth, or a lie. This is another form of misinformation perpetrated by those who either have a fiduciary interest in continuing the unconstitutional treatment of a disfavored group or are seeking to justify their need for punishment for people who have already paid for their crime by loss of their freedom through incarceration and are now attempting to reenter society as honest citizens. When this information is placed into the public’s attention by naive media then you have to wonder if the media also falls into one of these two groups that are not truly interested in reporting the truth. Both of these groups of people that have that type of mentality can be classified as vigilantes, bullies, or sociopaths, and are responsible for the destruction of our constitutional values and the erosion of personal freedoms in this country. I think the media or other organizations need to do a in depth investigation into the false assumptions and false data that has been used to further these laws and to research all the collateral damages being caused by these laws and the unconstitutional injustices that are occurring across the country. They should include these injustices in their report so the public can be better informed on what is truly happening in this country on this subject. Thank you for your time.

  2. Freedom as granted in the Constitution cannot be summarily disallowed without Due Process. Unable to to to the gym, church, bowling alley? What is this 1984 level nonsense? Congrats to Brian for having the courage to say that this was enough! and Congrats to the ACLU on the win!

  3. America's hyper-phobia about convicted sex offenders must end! Politicians must stop pandering to knee-jerk public hysteria. And the public needs to learn the facts. Research by the California Sex Offender Management Board as shown a recidivism rate for convicted sex offenders of less than 1%. Less than 1%! Furthermore, research shows that by year 17 after their conviction, a convicted sex offender is no more likely to commit a new sex offense than any other member of the public. Put away your torches and pitchforks. Get the facts. Stop hysteria.

  4. He was convicted 23 years ago. How old was he then? He probably was a juvenile. People do stupid things, especially before their brain is fully developed. Why are we continuing to punish him in 2016? If he hasn't re-offended by now, it's very, very unlikely he ever will. He paid for his mistake sufficiently. Let him live his life in peace.

  5. This year, Notre Dame actually enrolled an equal amount of male and female students.

ADVERTISEMENT