Sunday, May 14, 2006

Yet Another Gaming Scandal

There's another gaming scandal brewing in northwest Indiana, and it involves another former Democratic mayor, Scott King of Gary. At issue is a deal then-Mayor King signed with riverboat owner Don Barden, who purchased Donald Trump's neighboring riverboat casino at Buffington Harbor for $253 million. The agreement slashed by 25% the amount of money the casino shared with the city of Gary, saving the casino at least $1.2 million a year. After resigning as mayor, King has accepted a job as special consultant for Barden.

King's successor, Rudolph Clay, wants to undo the agreement according to the AP's Mike Smith. "Mayor Scott King went behind closed doors to shortchange the taxpayers of $1.2 million. And before the ink was dry, he went to work for the man," Clay said. "That just don't smell good to me." King slipped up in executing the contract by failing to forward it to the city's Board of Works for review and approval. King denied any collusion with Barden, even though the contract was executed just months ago. "It well predates any professional relationship I developed with Don Barden," said King.

Under a prior agreement, Trump's casino shared 4% of its monthly adjusted gross income with the city, while Barden's shared 3%. The differential dates back to the awarding of the original licenses, which encouraged minority ownership. Barden, as a minority-owned casino, got a break on the revenue sharing. Under the agreement King executed with Barden on October 19, 2005, the revenue sharing for the Trump casino got reduced to 3%, and it capped Barden's payments to the city at $6 million.

King obviously negotiated the deal in secret. Not only did the contract not get sent to the Board of Works for approval, the city's finance director did not become aware of the new agreement until he noticed the monthly checks in February were considerably smaller than usual.

King's not likely to escape this one unscathed. In fact, this one could well land him in jail if Clay's allegations of collusion between King and Barden are proven true. Last month, AI reported on another gaming scandal involving money that was being shared by the East Chicago riverboat with a not-for-profit company and development firm with persons closed to former Mayor Robert Pastrick.

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