EAST CHICAGO | Mayor George Pabey's lucky streak continued Tuesday's with another court judgment that could allow him to rack in tens of millions of dollars in new casino revenues for the city.
The Indiana Court of Appeals announced Tuesday it has upheld a 2007 state law giving the mayor and the East Chicago City Council permission to gain control of an additional 2 percent of Ameristar Casino and Hotel's adjusted gross receipts.
It came as a blow to The Foundations of East Chicago, an agency created under former Mayor Robert Pastrick, that had been receiving the 2 percent in casino revenues and distributing it to charities, churches, private schools and other public agencies until the money became tied up in litigation two years ago.
Carmen Fernandez, the city's corporate counsel, welcomed the ruling, saying Tuesday, "We have shovel-ready projects waiting for that money."
Foundations' attorney, Peter J. Rusthoven, said his client will appeal to the Indiana Supreme Court.
This comes one week after city officials welcomed an Indiana Supreme Court ruling giving them hope they can win -- through a parallel lawsuit -- additional millions of dollars previously channeled to Second Century, a politically connected East Chicago development firm also favored by Pastrick's administration.
Lee McNeely, an attorney for Second Century, said Tuesday he hopes future appeals by Foundations and Second Century are successful or much of the charitable and economic development in the city will come to an end.
Fernandez said Foundations and Second Century have either failed to spend casino funds in the community's best interests or wasted money in high overhead costs.
Pastrick brokered deals with Foundations and Second Century in 1994 that had subsidies flowing freely to the entities. Then Pastrick's 2003 re-election was overturned by the Indiana Supreme Court, and Pabey won office the following year in a special election.
Pabey successfully lobbied passage of a new law giving his administration the ability to rewrite the casino deals and cut the Foundations and Second Century out of future casino funds.
Foundations sued to have that law declared unconstitutional. Appeals court judges decided in a 2-1 ruling that East Chicago always had the authority to reshuffle the casino deals.
While city officials won in court Tuesday, a House-Senate conference committee rejected an attempt by state Sen. Frank Mrvan, D-Hammond, to force casino-funded groups to file annual financial reports.
