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Second Century suit can proceed

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Indiana Lawyer Rehearing

A Marion Superior judge has lifted a stay on the litigation involving East Chicago’s accounting and use of casino revenue, allowing the state to proceed with discovery and ask the court to require a for-profit organization to turn over documents relating to millions in casino revenue.

On Oct. 25, Marion Superior Judge David Shaheed granted the Indiana Attorney General’s motion to lift a stay that had been put in place earlier in the year on the years’ old litigation, originally filed by AG Steve Carter against East Chicago Second Century. The suit is aimed at getting the organization to fully account for $16 million in revenue it had received during the course of a decade from its .75 percent cut of the revenue from the city’s riverboat casino. Second Century opposes the disclosure, but the Indiana Supreme Court last year ruled the lawsuit could go forward. The AG’s Office in July blocked the city’s attempts to settle the litigation and split the approximately $8 million in revenue that remains in a separate account, without an accounting of the money. Judge Shaheed has not yet ruled on a request to release the segregated funds to pay Second Century’s attorneys fees.

Zoeller intends to subpoena documents and records from Second Century, and he also intends to support legislation in 2011 that requires financial transparency of all entities receiving casino money from local development agreements that led to this situation. Similar legislation has failed in the past two legislative sessions.

While not directly connected to this case, Zoeller maintains this funding relates to larger corruption patterns in East Chicago that has been ongoing for years – evident from a $108 million default judgment against former mayor Robert Pastrick because of a paving-for-votes scheme, and a federal jury verdict on theft and conspiracy in September against Mayor George Pabey, who’s now been removed from office following the verdict that he used city money to pay for personal home improvements.

Rehearing "Court revives casino revenue lawsuit" IL Aug. 4-17, 2010

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