Bayh embraces Pastrick

Indiana U.S. Senate candidate Evan Bayh embraces longtime political ally and former East Chicago Mayor Robert Pastrick during a July campaign rally in Hammond.

We've all heard the phrase, "Politics makes strange bedfellows." But more often than not, our political process actually unites familiar bedfellows.

In Northwest Indiana, the familiar also has meant the corrupt.

We're seeing that history repeat itself heading into the 2016 election as unsavory individuals — who should be political Kryptonite because of past transgressions against taxpayers — are literally being embraced by some big-ticket political names in a quest to win Lake County political support and votes.

We saw it most visibly last month in Hammond when former Hoosier governor and U.S. Sen. Evan Bayh announced his return to politics by launching a new Senate bid.

About a week after that announcement, Bayh attended a rally at a Hammond factory where the Senate hopeful spent part of the time conversing with and embracing former East Chicago Mayor Robert Pastrick.

Disgraced is a word that can and should precede Pastrick's name.

Pastrick's administration presided over the corrupt concrete-for-votes scandal of 1999 — you remember, when the city poured free concrete at private residences to curry favor with East Chicago voters.

Seven East Chicago city officials, including three elected councilmen, were criminally convicted in federal court in that scandal.

Pastrick, though never criminally charged, was named in a first-of-its-kind federal racketeering lawsuit, and along with others was ordered to reimburse the city for the unscrupulous largess.

Pastrick would end up losing his longtime hold on the East Chicago and Lake County Democratic political machine, being succeeded by George Pabey, who just recently completed a federal prison sentence for unrelated crimes against his constituents.

Pastrick had all-but faded from visible politics.

But there was former Sen. Bayh last month, hugging his old friend like it was old times.

As ethically disturbing as it was to see the pictures of a U.S. Senate hopeful hugging a former mayor who clearly duped taxpayers, it's not the only alarm bell.

Another product of the East Chicago political machine, longtime Bayh friend and Merrillville lawyer Michael Pannos, appears to be making a return to the political scene.

A number of Lake County Democratic Party insiders are expressing concern — with good reason.

Pannos was one of the principal defendants in a lawsuit filed by the Indiana Attorney General more than a decade ago.

During Pastrick's mayoral reign, Pannos and fellow lawyer Thomas Cappas created a private, for-profit company known as Second Century.

Pastrick brokered a deal that ultimately funneled $16 million in public casino revenues to Second Century over a decade.

In exchange, Second Century was supposed to build housing stock in the city.

But as a private company, Pannos' Second Century wasn't beholden to any form of transparency regarding how the money was being spent.

Ultimately, the attorney general sued and then settled out of court, requiring Second Century to pay back $154,042 to the city — a mere drop in the bucket of the millions in public dollars raked in by Second Century with little or no public benefit.

Pannos alone was paid nearly $2 million between 1997 and 2008.

In the wake of the scandal, a number of Lake County Democratic Party insiders observed Pannos largely vanished from the political scene.

But then Pannos was seen late last month, escorting his old friend Bayh to a local political fundraiser for Lake County Commissioner Kyle Allen.

It turns out that's not all he's doing.

Several local Democratic Party insiders said Pannos is leading bi-weekly meetings of Northwest Indiana party officials in which local campaign strategies for Bayh, gubernatorial candidate John Gregg and presidential hopeful Hillary Clinton are discussed.

I asked the Bayh campaign about Pannos' involvement in the former senator's campaign late last week.

"Michael Pannos has no role in the Bayh campaign," Bayh spokesman Ben Ray told me in an email.

But Pannos, who served as Indiana Democratic Party chairman when Bayh was governor in the early 1990s, told me he is playing a role.

"I'm not the face of the local campaigns," Pannos said. However, he acknowledged he is helping introduce people from the campaigns to local politicos and wants to help the candidates win office.

Hammond Mayor Thomas McDermott Jr. confirmed Pannos has been selected by local Democratic Party officials to lead the bi-weekly strategy meetings. McDermott said he would like to see Pannos, and his wealth of local political knowledge, ascend to the Lake County Democratic Party chairmanship in the future.

Meanwhile, several other party leaders and insiders privately lament Pannos' return, given the political corruption baggage he carries.

They're right to be concerned.

Offering footholds to people who have clearly perpetuated past political corruption is no path to reform for a Region clearly in need of a new direction.

When he spoke to me last week, Pannos denied any wrongdoing in the Second Century business deal. It's true he was never criminally charged.

Pannos even said that Indiana Attorney General Greg Zoeller cleared him of any wrongdoing.

Not so, according the October 2014 press release in which Zoeller announced the $152,042 in Second Century settlement money that would be repaid to East Chicago taxpayers.

The press release, which names Pannos specifically, noted "the company's principals used funds intended for local economic development to enrich themselves."

"It is a shame the Second Century defendants exploited a weakness in the local development agreement law and steered casino revenue to their own personal benefit with no transparency rather than to the benefit of the community...," Zoeller was quoted as saying in the press release.

Zoeller spokesman Bryan Corbin told me last week that the attorney general stands behind those 2014 statements.

So it appears Pannos, at a minimum, was twisting the facts about his supposed exoneration by the attorney general.

Let's hope he's not allowed a new seat at the Lake County political table in which he also can twist the process to his own personal gain.

Investigative Editor Marc Chase can be reached at (219) 662-5330 or marc.chase@nwi.com. The opinions are the writer's.

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Marc is a veteran investigative reporter and editor of more than 15 years, including 10 years at The Times, where he is the investigative editor. He is also the founder of the Calumet Region Civil War Preservation Project.