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Thursday, October 23, 2008

Ind. Courts - "E.C. developer claims feds took a pass on Second Century" [Updated]

Today the Supreme Court heard oral arguments in two different cases, City of East Chicago v. East Chicago Second Century, and Steve Carter v. East Chicago Second Century (see more info about the cases here).

Patrick Guinane of the NWI Times has a story this afternoon on the argument in the latter case. Some quotes from the story:

INDIANAPOLIS | East Chicago Second Century, a politically connected developer embroiled in a feud for control of local casino subsidies, was investigated but not charged by federal prosecutors, a lawyer for the firm said Thursday.

Attorney Maggie Smith divulged that information to the Indiana Supreme Court in an effort to blunt the state attorney general's attempt to force the development firm to open its books. If federal authorities haven’t filed criminal charges, she reasoned, Second Century must not be doing anything wrong. * * *

The state Supreme Court heard arguments Thursday in Indiana Attorney General Steve Carter’s attempt to force a public accounting of Second Century finances. The for-profit firm has refused to disclose how it has spent millions in riverboat casino-funded economic development subsidies it has reaped through a 1994 deal brokered by Pastrick.

“All actions over the many years have failed to find how the $16 million was spent,” Carter said after Thursday’s hearing. “The Indiana Supreme Court is the last hope the public will ever have of knowing where it went.”

[Updated 10/25/08] Christin Nance Lazerus reported 10/24/08 in the Post-Tribune:
A lawyer representing East Chicago Second Century Inc. during oral arguments Thursday in the Indiana Supreme Court said the U.S. Attorney's Office investigated the developer and decided not to file charges.

Second Century, which is a private, for-profit corporation that has received millions of the city's casino revenue, is being sued by Attorney General Steve Carter in an effort to open its books.

Second Century attorney Maggie Smith argued that if any of the allegations of misappropriated funds were true, federal prosecutors would have found something. Smith said Second Century was part of the probe that investigated corruption by former Mayor Robert Pastrick and his associates.

Chief Justice Randall T. Shepard questioned Smith about the motivation behind Second Century's unwillingness to open its books.

"It's a court of law to be sure, but you resist at every point the notion that the people of East Chicago should see where that money is being spent that was being generated for their benefit ... It almost has to be some reason other than, 'We're good guys,' " Shepard said. "You make everybody wonder whether in a gaming world where everyone is very concerned about corruption, whether that isn't the thing that's being closeted by your refusal to let anybody examine where the money went."

Posted by Marcia Oddi on October 23, 2008 07:01 PM
Posted to Ind. Sup.Ct. Decisions