Zoeller doesn't want to settle East Chicago lawsuit

Nick Rees Mar. 3, 2010, 4:00pm


INDIANAPOLIS (Legal Newsline) - Indiana Attorney General Greg Zoeller has voiced strong opposition to the settling of a lawsuit by the city of East Chicago with a company that earned $16 million in casino revenue over 10 years.

Both Zoeller's office and the city of East Chicago are plaintiffs in the long-running lawsuit against Second Century, Inc., which seeks to make the company divulge how $16 million of its East Chicago riverboat casino revenue were spent over the 10 years since the company's creation.

Second Century's casino revenue was meant to provide economic development in East Chicago, Zoeller says. To date, Second Century has refused to reveal who received the grants it dispensed or to divulge how the money was used.

Zoeller had previously attended an East Chicago City Council meeting on Feb. 22 to urge its members to reject a settlement deal proposed by Major George Pabey.

The settlement would end the city's litigation against East Chicago Second Century Inc. Zoeller was not involved in the negotiations for the settlement and Zoeller's portion of the lawsuit remains active in court.

The council's vote deadlocked at 4-4 at the meeting, though another vote on the proposed deal is scheduled for this week.

"What I told the City Council last week still applies: Settling out of court for money but without transparency with the for-profit entity created by the corrupt (Mayor Robert) Pastrick political machine is the wrong thing to do," Zoeller said.

"Nothing has changed since last week to cleanse this settlement of its tainted appearance."

Mayor Pabey's proposed settlement would pay out an estimated $8 million-$10 million escrowed in an account since the filing of the lawsuit. The city would receive 54 percent of that money with Second Century collecting 46 percent and not required to provide transparency of records.

"The terms as discussed by the Council last week are far too generous to Second Century and would do nothing to compel transparency or to provide an accounting for where the money went," Zoeller said. "My office vigorously objects to this proposed settlement and will urge the court to reject it."

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