Friday, March 30, 2007

Attorney General Carter Wants Answers: Casino Netted Attorneys $16 Million

Indiana Attorney General Steve Carter (R) is trying to find answers as to why politically-connected attorneys Thomas Cappas and Michael Pannos were paid $16 million in casino revenues as a result of a deal brokered by a former East Chicago mayor. The Northwest Indiana Times' Bill Dolan reports:

The state is demanding two politically connected lawyers account for $16 million they received in casino money under a deal brokered during the Pastrick administration.

Indiana Attorney General Steve Carter alleges in a lawsuit his office filed Thursday in Marion Superior Court in Indianapolis that Thomas Cappas and Michael Pannos "and their families have been unjustly enriched."

Carter's office demands Cappas and Pannos detail what they have done with the money but isn't alleging Cappas or Pannos have done anything illegal.

Carter said this city's casino has paid the millions to Cappas and Pannos during the last decade under an agreement designed to leverage economic development in this depressed steel city, producing few results.

"I've never seen the evidence. I don't know of anyone else who has. I can't find any public records that have. We've asked for it, and we've been stonewalled," Carter told The Times.J. Lee McNeely, legal counsel for Second Century, the private corporation Cappas and Pannos created to manage the casino money, said Thursday, "We will respond. We will prevail, and our only hope is that this doesn't interfere with our ongoing efforts to resolve this matter by settlement.

"McNeely said the city and attorney general have consumed two years and hundreds of thousands of dollars in legal fees in a failed effort to wrest control of the casino funds away from Second Century.

McNeely has presented testimony that Cappas and Pannos have helped build millions of dollars worth of new housing and would to do more if Mayor George Pabey's administration wasn't blocking initiatives.

Second Century was a side agreement to the deal that brought one of Northwest Indiana's five floating casinos to this city.

The casino, now called Resorts East Chicago Casino, has been paying three quarters of a percent of its gambling revenue to Cappas and Pannos, political allies of former mayor Robert Pastrick, who endorsed the deal.

Pabey, who defeated Pastrick in 2004, demanded that agreement be rewritten.

Second Century sued to block that move and has prevailed in its battle with the city. The city is appealing the matter before the Indiana Court of Appeals.

I hope Carter is successful in his efforts to get to the bottom of this. I've often wondered whether there may have been similar arrangments with other Indiana riverboat casinos which netted political insiders millions.


Anonymous said...

Uh, I thought Pannos was in jail. Did I miss something? I went on vacation for awhile...

Anonymous said...

you may be confusing him with fellow NW Ind Greek American Democrat Peter Mannous.

Anonymous said...

I absolutely love the old school Pastrick machine. Years ago when I was on staff at the Dem State Committee I recall Mike was just getting out of law school and was involved in politics thru Young Democrats which didn't amount to much. Looks like he's done well riding off the influence peddling learned in the Bayh camps.
Lake County politics are something they don't teach in civics class. I recall a Dem candidate for a state office dropping off $100,000 in small bills in the back of Hatcher's limo under city hall in Gary. The candidate came in third.Pastrict ran his own show and always had a couple of toes over the legal line but the guy was a helluva lot of fun. I don't think Pannos was ever in that league but somebody has to take the reins at some point I suppose.
Some always thought that they should build a moat around Lake County to seperate it from the rest of the state.
$16 mil, that's a decent amount of change!!! Best of luck to Carter. He'll need it.

Anonymous said...

Corruption? Gambling? Northwest Indiana?

I'm shocked!

Anonymous said...

Looks like we have alot of this type of behavior based upon the passage of slots at horse tracks in the Republican Senate.