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.

Smith said the federal inquiry was part of a broad corruption probe into the administration of eight-term former East Chicago Mayor Robert Pastrick. Second Century is run by Pastrick allies Thomas Cappas and Michael Pannos.

"The investigation began in 2003. It commenced with hundreds of hours of grand jury testimony, hundreds of thousands of documents reviewed, and all of the other indictments were handed down. The latest was in 2005," Smith said after Thursday's Supreme Court hearing. "There's never been anything handed down against Second Century."

A spokeswoman for the U.S. Attorney's Office in Hammond could not immediately be reached for comment Thursday afternoon.

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."

For more on Thursday's hearing, check nwi.com and read The Times on Friday.