The Indiana Supreme Court has agreed to determine whether East Chicago's casino money should be sent to a private corporation that hasn't produced an accounting of how that money is spent.
The court should see the folly of directly distributing what is, in effect, tax money to a private, for-profit entity. That practice needs to end.
Attorney General Steve Carter's lawsuit against Second Century Inc. contends that the for-profit business has received more than $16 million in East Chicago riverboat casino revenues, yet it has never provided an accounting to East Chicago citizens of where that money went.
The Foundations of East Chicago has earned criticism for having paid, not volunteer, board members, siphoning too much of its casino revenues for overhead costs.
But at least the foundations have provided reports on how the money was spent.
Mayor George Pabey has been fighting for control of that casino money and has made a strong case for it. East Chicago is the only city in the region with this kind of setup for distributing the casino revenues.
In his petition to the court, Carter said, "The court should grant transfer in this case to update Indiana law concerning constructive trusts, and in particular whether a constructive trust is warranted to remedy the injustice of a deal siphoning millions of dollars of casino gambling revenue to associates of a public official."
In other words, Carter is asking the court to order Second Century to show where the money went, a side argument to the city's request.
The city is against sending millions of dollars of casino money to allies of former Mayor Robert Pastrick.
Second Century was established with the understanding that the money would be used for economic development in the city.
"The public deserves to know what happened to this money," Carter said in announcing the Supreme Court's decision to hear the lawsuit. "There is little evidence that these funds, intended for economic development, have not been wasted."
Ordinarily, private corporations have no obligation to show the public how they have handled their money. But without showing the public how the casino revenues have been spent, how is the public to know its money has been spent properly?
The money, after all, is for the citizens of East Chicago. It is not for the sole benefit of Second Century.
The Marion Circuit Court dismissed the case, and the Indiana Court of Appeals affirmed that decision. It is now up to the Indiana Supreme Court to protect East Chicago's residents and rule on this case.
That money belongs with the city, as Pabey has contended. That way, if the money is not spent properly, the public will find out. And then they'll have recourse, too -- booting the mayor out of office.
That's not the case with the money going to Second Century, which hasn't opened its books for public inspection.
