After more than three years, a regional carpenter's union is poised to settle all of the civil litigation surrounding a bribery-fueled land purchase in the Coffee Creek subdivision.
Imprisoned real estate salesman Kevin Pastrick, who admitted bribing a union pension board official to get support for the sale, has agreed to pay $150,000 to settle the union's civil lawsuit against him.
Meanwhile, Lake Erie Land Co. -- the real estate holding company owned by NiSource Inc. -- has struck an undisclosed settlement with the union. Lake Erie sold the land to the union through Pastrick.
The settlements were revealed in federal court paperwork Monday. The news comes as NiSource is considering bids to sell off NIPSCO, the northern Indiana utility that served as a platform for the energy company's growth into a Fortune 500 company.
The wide-ranging scandal began with a criminal investigation by the Department of Labor that started shortly after the Northwest Indiana Regional Council of Carpenters Pension Trust Fund bought 55 acres of undeveloped land near Chesterton for $10 million in 1999. Appraisers since have determined the land was worth about half that price.
Pastrick eventually admitted that he and former Indiana Democratic Party Chairman Peter Manous, a former attorney for the union, bribed union leader Gerry Nannenga with $45,000 from their $600,000 sales commission on the deal.
Nannenga was sentenced to 18 months in prison and is paying a $125,000 civil settlement to the union. Manous spent more than two years in prison and is paying $125,000 to settle the case against him. Pastrick, the son of former East Chicago Mayor Robert Pastrick, is still serving his three-year sentence at the federal prison in Oxford, Wis.
A fourth person, C. Paul Ihle Jr., served more than a year in prison and is paying $75,000 to settle the claims that he hid evidence and lied to investigators to hide the actions of Pastrick, who was his business partner in Sand Creek Sales and Development.
Though the four people directly involved in the bribery were sent to prison, the union pursued civil litigation against NiSource's Lake Erie Land Co., alleging the company was indirectly responsible for concealing the inflated purchase.
Jerry Mobley, former president of Lake Erie Land, admitted in court records he knew someone received a secret $200,000 "referral fee" in the deal. Mobley failed to disclose that Manous had received the $200,000 fee, despite direct questioning from the union and a disclosure requirement in his own sales contract.
