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Saturday, August 16, 2008

Ind. Decisions - More on "Court Agrees to Review Attorney General’s Lawsuit Against Second Century, Inc. "

Updating this ILB entry from yesterday, stories today in both region papers. Any Grimm of the Gary Post Tribune has this story, which begins:

The Indiana Supreme Court has given Attorney General Steve Carter another chance for a look at the records of East Chicago Second Century, a private, for-profit corporation that has received millions of the city's casino revenue.

Carter's lawsuit against the foundation, chartered in 1995 by allies of former Mayor Robert A. Pastrick to boost economic development in the city, was dismissed in Marion County and by the Indiana Court of Appeals in March.

Under terms of the deal with the city, Second Century was to receive .75 percent of the city's casino revenue, some $16 million before the Indiana Gaming Commission voided the agreement in 2006 at the urging of Carter and Gov. Mitch Daniels.

Patrck Guinane of the NWI Times writes:
The Indiana Supreme Court agreed Thursday to review state Attorney General Steve Carter's attempt to pry open the books of a politically connected East Chicago developer that has reaped $16 million in local casino subsidies.

"The public deserves to know what happened to this money," Carter said Friday in a statement. "There is little evidence that these funds, intended for economic development, have not been wasted."

Carter so far has struck out in his attempts to order a public accounting of the casino cash that East Chicago Second Century, a for-profit firm, received through a 1994 economic development deal then-Mayor Robert Pastrick brokered to bring riverboat gambling to his lakefront city.

The company, run by Pastrick allies Thomas Cappas and Michael Pannos, was created to help revitalize the struggling steel town.

But Cappas and Pannos instead enriched themselves and family members by taking "enormous" salaries, according to a partially redacted state investigation The Times obtained last year.

Carter contends that the $2 million annual casino subsidy to Second Century was created to foster a public good and that the company therefore should be forced to make public its finances. The Indiana Court of Appeals and a Marion County judge have rejected that argument.

Attorneys for Second Century maintain that their clients, as managers of a private business, are under no legal obligation to open their books.

Posted by Marcia Oddi on August 16, 2008 09:02 AM
Posted to Ind. Sup.Ct. Decisions