Sunday, June 29, 2008

Star Botches Pence's Misstep On East Chicago RICO Case

A lot of us have wondered how the state's newspaper of record could allow the huge misstep of Democratic Attorney General candidate Linda Pence in criticizing Attorney General Steve Carter's Office for his handling of a RICO case against various East Chicago players without mentioning she represented one of the defendants in the case to go unreported. Today, the newspaper insults our intelligence by trivializing the matter by the way it reports on it in its weekly political gossip column, "Behind Closed Doors." This is how the column describes Pence's misstep:

When she announced her candidacy, Pence was asked by a reporter from The Times of Northwest Indiana whether she would continue the ongoing civil racketeering case against former East Chicago Mayor Robert Pastrick.

Pence said she'd have to review the case.

She didn't mention her client -- an omission that drew the attacks from the blogs and criticism from the Times editorial page.

Yes, her omission did draw attacks from the blogs. The blogs were the first to report that Pence represented one of the defendants in the case, Reith-Reilly. The company settled out of court with the Attorney General's Office in 2007, agreeing to repay taxpayers $625,000. After reading the reports on the blogs, Patrick Guinane of the Northwest Indiana Times did what a good reporter would do and checked out the facts. What he learned was that Pence's client's $625,000 payment was the largest to date of the $1.3 million in settlements recovered by the Attorney General in the case. He also got Pence to concede that she might be required to refer the case to outside counsel for review because of her conflict of interest. Guinane wrote:

Pence said she would be willing to entrust the East Chicago case to subordinates or outside counsel if her review identified a potential conflict of interest.

Although Rieth-Riley admitted no wrongdoing in its 2006 settlement, the state had accused the company of playing a central role in a scheme to help East Chicago officials legitimize the paving bonanza that preceded Pastrick's 1999 re-election. The original civil lawsuit said the company signed off on a phony contract after other contractors already had helped pour free driveways, patios and sidewalks for city voters.

In 2005, Pence filed a countersuit in the case, contending that Rieth-Riley's contract with the city contained a clause protecting the company from liability if any part of the pact was deemed "contrary to the law." A year later the company forged a settlement that included a pledge to cooperate with investigators."

Of the $1.3 million recovered in the RICO case, Rieth-Riley paid a significant settlement of $625,000, which is the largest to date and represents twice the amount paid to outside counsel," Carter spokeswoman Staci Schneider said Thursday.

In the Star's "Behind Closed Doors" column, Pence says she is indignant at the notion she was trying to hide anything. "I never hid anything in my life," she said indignantly. She tries to minimize the seriousness of the matter by noting it is a civil and not a criminal case. "Pence said she could not discuss details because of attorney-client privilege but said companies often settle cases not because they have done something wrong but because it's less expensive to put the matter to rest than to litigate," the column says. "I had no involvement in the criminal case," she said. Again, the point is that she did comment on the case when asked a question about it and never mentioned her obvious conflict of interest in the matter. She knocked the Attorney General for using costly outside counsel without noting the counsel had more than paid for his fees through the settlements he collected from her client and others. Nor does Pence mention she made big bucks working as outside counsel for the State of Indiana in the past. She makes matters worse by this arrogant response in the column. "If it's a good case, my guess is I could do it better," said Pence, who formerly worked for the U.S. Department of Justice. "I'll make sure everything is done ethically. My whole life is ethics," Pence said. "If anybody says I believe in corruption, that's just a flat-out lie." No, Ms. Pence, you will not have a thing to do with this case if you are elected Attorney General because you have a conflict of interest. And if your "whole life is ethics", you wouldn't have to be reminded of that fact.

The Star's treatment of this matter is a complete embarrassment and disgrace to journalism. It is obvious there are people at the newspaper who are tight with Pence and who set out with this lightweight piece of journalism with the intention of glossing over Pence's huge misstep at the outset of her campaign by making it a mere trivial matter for discussion in its political gossip column. The Northwest Indiana Times and its editorial writers get it. The Star's reporters and editors need a good kick in the ass on this one.


Jeff said...

Couple of Questions on this one.

1. "She knocked the Attorney General for using costly outside counsel without noting the counsel had more than paid for his fees through the settlements he collected from her client and others." I might be wrong and will have to see what I can find but I think Reith actually settled before the Chicago outside counsel was hired. So that settlement should be credited to the AG's Office and staff.

2. How can anyone from the D side talk about ethics in this case when it is about Bob Pastrick who is still a power player in the party and the DNC delegate from Indiana?

3. As we are talking about RICO what ever happened to the concrete price fixing case in Hamilton County? Would not the same RICO statute allow the state to go after our money there also? And if so why not?


Anonymous said...

You're bashing an attorney based on her representation of a client?

Haven't you represented some illegal immigrants?

Gary R. Welsh said...

No, I'm not bashing her because of the client she represented. I'm criticizing her because she criticized the AG's Office for its handling of a case where she represented a client adverse to the State without noting her conflict of interest.

Gary R. Welsh said...

Jeff, You raise a good point on the price-fixing concrete case. As I recall, that case has been prosecuted entirely by the feds. I would think there is some restitution involved, but I'm not sure about that.