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Friday, March 12, 2010

Ind. Decisions - Federal Judge orders Pastrick, allies to pay $108M to East Chicago

Some quotes from Dan Hinkel's report today in the NWI Times:

HAMMOND | Region political icon Robert Pastrick and two former allies have been ordered to pay more than $108 million to the city of East Chicago in the landmark civil case centered on the sidewalks-for-votes scandal that capped Pastrick's 33-year mayoral reign.

Hammond federal Senior Judge James Moody filed his opinion Thursday afternoon, calling for Pastrick, former aide James Fife III and missing former City Councilman Frank Kollintzas to pay the city $108,007,584.33 in damages for the alleged racketeering scheme.

Indiana Attorney General Greg Zoeller, who inherited the state's lawsuit against Pastrick from former Attorney General Steve Carter, said Thursday in a written statement he was "enormously pleased" with the $108 million judgment the state's lawsuit secured on behalf of the city. That amount will symbolize the "brazen and shameless" corruption of the Pastrick administration, Zoeller said.

"This case is historic; never before has a city government been adjudged a corrupt organization under federal racketeering laws," Zoeller said.

"This is a victory for the state of Indiana," Zoeller said.

Speaking on behalf of current Mayor George Pabey, East Chicago spokesman Damian Rico said: "The city of East Chicago is grateful the court has indicated the importance returning the money to the city, which will further enhance our efforts to continue moving East Chicago in the right direction. That includes furthering our efforts to create jobs, and especially in our economic development effort.

"We're also hopeful that the attorney general considers returning the proceeds of the performance bond that the city purchased from the past administration, totaling half a million dollars."

Pastrick's attorney, Mike Bosch, said the former mayor has few assets and the judgment is "uncollectable." Kollintzas disappeared years ago, and Bosch said he believes Fife also does not have significant assets the government could take. * * *

Moody's decision was not a total legal victory for the state. He devotes much of the second half of the 53-page opinion to denying the state's claims. He denied certain claims for damages. Moody denied the state an injunction banning the defendants from public office. The state asked Moody to order a "forensic audit" of Second Century and the Foundations of East Chicago, the beneficiaries of a casino revenue deal engineered by Pastrick that remains controversial today. Moody denied that request, writing that he would not order such an accounting without violating due process. Moody also declined to rescind the agreement between the city and Second Century.

Moody did order the defendants to pay the state's legal fees. The state hired Chicago lawyer Patrick Collins to handle the RICO case, and a hearing will be held to determine the fees that will be awarded.

"So now we're going to get a chance to find out how much the attorney general of Indiana was willing to spend to get what I believe to be an uncollectable judgement," Bosch said.

Zoeller continues to pursue Second Century, most recently pushing city officials not to settle their legal fight with the for-profit company over millions of casino cash. Mayor George Pabey, who remains under federal indictment on charges he embezzled city funds, wants to settle the court battle. Zoeller seeks an accounting from the organizations that have reaped the casino money.

Here is AG Zoeller's press release.

Here, via the AG, is a link to Judge Moody's 53-page opinion in State v. Pastrick.

Posted by Marcia Oddi on March 12, 2010 09:15 AM
Posted to Ind Fed D.Ct. Decisions