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East Chicago-casino settlement up in air

May 12, 2010

"RICO case nets $108M in damages" IL March 17-30, 2010

Marion Superior Judge David Shaheed on April 19 declined to immediately decide on the state's request to set aside a partial settlement in a dispute about East Chicago casino revenues.

The Attorney General's Office objects to a lawsuit settlement filed between the City of East Chicago and for-profit company Second Century that received about $16 million in casino revenue since the late 1990s. The AG wants Judge Shaheed to set aside the settlement granted April 8, specifically because the city council had rejected the settlement in March with a 5-4 vote. If approved, the settlement would release about $8 million in remaining funds. Of that, 54 percent is to go to the city administration and 46 percent to Second Century owners. In addition, the casino revenue stream is being redirected to the city without any accounting of how the money's been spent so far or how it might be spent in the future.

This case is part of a larger investigation into public corruption in East Chicago, which so far has been highlighted by the AG's recent victory against former mayor Robert Pastrick and aides in a federal civil racketeering case. In March, a federal judge ordered that they pay $108 million. While this Second Century case is separate, it involves most of the same players and the casino revenue that's been a part of the entire line of litigation. The AG's Office says it was not consulted on the settlement between East Chicago and Second Century.

Briefs were due from both Second Century and the East Chicago Foundations April 23, and the state's reply is due May 3. Following those briefs being filed, the judge will take the arguments under advisement and may hold another hearing in May.
 

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