Zoeller's objection heard in casino money issue

Nick Rees Apr. 20, 2010, 11:59am


INDIANAPOLIS (Legal Newsline) - Indiana Attorney General Greg Zoeller's objection over the dismissal of claims in a lawsuit between East Chicago and for-profit company that received millions of dollars in casino revenue was heard Tuesday by a Marion County Court.

Zoeller requested that the court undo the dismissal of claims between East Chicago's administration and the for-profit East Chicago Second Century, Inc.

Judge David Shaheed heard arguments from all sides in Marion Superior Civil Court 1 before taking the matter under advisement. Judge Shaheed could rule as soon as next month on Zoeller's request to vacate the court's earlier order.

"The State of Indiana's claims remain alive, and we want the opportunity to prove that Second Century's records should be opened to scrutiny," Zoeller said.

"East Chicago residents should be able to see how this for-profit company that was supposed to dispense grants to benefit the public actually spent the money."

Zoeller and East Chicago have been plaintiffs in a long-running lawsuit against Second Century that seeks to require the for-profit company to account for $16 million in casino revenue it received from the East Chicago riverboat casino in the 10 years since the company was created during former Mayor Robert Pastrick's administration.

The 0.75 percent of casino revenue that went to Second Century was meant to benefit the people of East Chicago. Second Century has refused to publicly name who received the grants it dispensed or to divulge how the money was used. More than $8 million of the casino revenue remains in an account.

Current East Chicago Mayor George Pabey was originally a partner in the lawsuit but announced plans in February to settle the suit with Second Century, ending the litigation in exchange for a payout to the city.

The deal would have released the remaining $8 million, giving 54 percent to the city's administration and 46 percent to Second Century's owners.

The company's casino revenue would also have been redirected to the city.

Zoeller opposed the settlement, personally attending a meeting of the East Chicago City Council on Feb. 22 to urge council members to reject the deal. The council deadlock 4-4 on the resolution to ratify the settlement, later voting 5-4 at their March 3 meeting to defeat the deal.

Despite the rejection of the settlement, the Pabey administration and Second Century jointly filed a notice in the lawsuit on April 6 that purported to dismiss that city's claims against the council majority's wishes.

The state of Indiana is also a plaintiff in the lawsuit, but Zoeller's office was not consulted and did not have a chance to file an objection prior to the court granting the dismissal on April 8, Zoeller said. Zoeller subsequently filed an objection the next day that led to Tuesday's motion.

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