Attorney general asks Supreme Court to review East Chicago casino case

EAST CHICAGO, Ind. – The Indiana attorney general has asked the state Supreme Court to order a development group that has received $16 million in casino subsidies to open its books.\nThe state Court of Appeals and the Marion County Circuit Court have both already ruled in favor of East Chicago Second Century Inc., finding the private company does not have to account for the casino money it has received since 1997.\n“There is a strong basis for moving forward and continuing to present the arguments that this entity should be accountable for $16 million that appears to have vanished,” said Attorney General Steve Carter. “There has been no proof that these funds intended for economic development have not been wasted. The public is left to wonder how the $16 million has actually helped them.”\nJ. Lee McNeely, attorney for Second Century, called the move by Carter a continuation of the tactics of the city and the state to use taxpayer funds to prolong the legal battle in hopes of bankrupting Second Century.\n“We’ve won every court decision at every level,” McNeely said. “The city is using taxpayers’ money to spend hundreds of thousands if not millions of dollars on this pointless litigation and the state of Indiana has joined with them, apparently.”\nMcNeely pointed out that the state appeals court in its decision March 12 said Carter mischaracterized the agreement in his arguments. The court said Second Century was formed as a for-profit corporation to assist the initial casino operator as a “catalyst” for economic development in the city. The appeals court also said Second Century was formed as a for-profit corporation.\nA state attorney general’s office investigation suggested that the money should have paid for more economic development activities. The review also said the agreement might violate industry integrity because it directs money intended for public benefit to a private company that has used its for-profit status to resist public oversight of its activities.\nThe Indiana Gaming Commission, citing the investigation, terminated Second Century’s more than $2 million annual casino subsidy in June 2006. But the subsidy, a 0.75 percent cut of the East Chicago riverboat’s annual revenues, is mired in litigation.\nEast Chicago Mayor George Pabey wants the Second Century payments redirected to the city, and the two sides remain locked in a court battle. Roughly $4 million is being held in escrow pending a resolution. The casino payment agreements were negotiated under former longtime Mayor Robert Pastrick, whom Pabey defeated in 2004.