Part II in a series

E.C. mayor hopes to trade casino money's checkered past for brighter future

2013-12-23T00:00:00Z 2014-03-27T11:04:11Z E.C. mayor hopes to trade casino money's checkered past for brighter futureBy Bill Dolan, (219) 662-5328
December 23, 2013 12:00 am  • 

EAST CHICAGO | The odds are good that casino cash is comping part of the municipal services most East Chicago residents rely on.

The city has received more than $274 million in wagering and casino admission taxes, according to state records, since its first casino opened in April 1997.

That's more than $570 per resident per year.

Riverboat money has been a lifeline for, and on one occasion a curse on, city officials who now rely on it to replace revenues from the steel and heavy industry base.

Most of it supports the pay and benefits of city workers while a smaller fraction goes to infrequent expenses such as street resurfacing, railroad relocation as well as equipment and other supplies -- down to postage stamps.

East Chicago Mayor Anthony Copeland wants to redirect the priorities.

"In the last two years, I've concentrated on ending our dependency on it. I've made it my goal to restore this money back to what it should be used for -- major public works projects."

East Chicago's riverboat was born in controversy from the time politically connected officials began quitting City Hall jobs to invest in the expected casino bonanza even before a gambling license was issued.

Some corrupt officials found the city's casino share handy when they spent more than $24 million on free concrete given away to residents for driveways, patios and sidewalks as well as free tree-trimming during the tightly contested 1999 mayoral election.

Federal authorities later convicted three East Chicago city councilmen, a city controller, a parks superintendent and a city engineer among others for being part of a scheme to buy votes with the concrete giveaway. Former Mayor Robert Pastrick never faced criminal charges, but a federal judge did brand Pastrick's administration as corrupt and ordered Pastrick and former political allies to pay $108 million in damages for the sidewalks-for-votes scandal.

Pastrick initially brokered a deal with the casino that 1 percent of its revenues would be given to the city, 2 percent to the Foundations of East Chicago, which distributes donations to city schools, churches and nonprofits, and .75 percent to Second Century, a private development firm run by run by Pastrick allies.

After Pastrick left office, the city sued to undo his handiwork and capture more of the casino revenues going to the Foundations and Second Century. With the help of the Indiana Attorney General's office, city officials eventually raised the city's share of annual casino revenues to 1.625 percent.

The gaming dollars were spread liberally across 17 city departments between 2009 and last year, according to the Gateway database furnished by the Indiana State Board of Accounts reports and city records.

It includes:

$10.9 million between 2009 and 2011 on economic development

$9 million in 2012 and this year on public safety

$6.25 million from 2009 to the end of this year on unspecified projects in the city's engineering department

$4 million between 2009 and 2011 for police and fire protection, and city street, sidewalks and sewer work

$3.6 million to pay city vendors

$3.5 million to repay municipal debt

$3.5 million annually to the Northwest Indiana Regional Development Authority

$3.2 million over the same time period on liability insurance and lawyers defending the city against lawsuits between 2009 and 2011

$2.8 million to supplement city employees' insurance benefits

$2.1 million used as so-called local matching funds needed to attract unspecified federal grants

$1.4 million in judgment bonds or loans typically associated with court settlements and awards.

$895,000 on computers and software used by the city's information technology department between 2009 and 2011

$626,000 on the East Chicago marina

$485,000 on the city building department and vehicle management

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About East Chicago

Office of the Mayor

4527 Indianapolis Blvd. East Chicago, IN 46312

Police Department

2301 E. Columbus Dr. East Chicago, IN 46312

Fire Department

3901 Indianapolis Blvd East Chicago, IN 46312

East Chicago Park Department

1615 E. 142nd Street East Chicago, IN 46312

School City of East Chicago

210 East Columbus Drive East Chicago, IN 46312
Phone: 219.391.4100