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State Gambling Regulators Request Casino Revenue Records in Chicago

State Gambling Regulators have asked East Chicago to turn over records detailing how Mayor George Pabey's administration has spent millions in casino revenue.

"I wouldn't call it 'under investigation'," Ernie Yelton, the commission's executive director, said Wednesday. "We have asked the city of East Chicago to give us an itemization of their receipts and expenditures under the local development agreement with resorts, as well as invoices and billings and payments of legal fees."

Communities that host riverboat gaming receive ongoing economic development subsidies and the city's contract with Resorts East Chicago has netted more than $4.2 million since Pabey took office last year. Struggling to stay afloat financially, the city has tapped those funds to pay various attorney fees, Carmen Fernandez, corporation counsel for East Chicago acknowledged Wednesday.

Now the Gaming Commission wants to know how much economic development money the Pabey administration has diverted toward legal bills.

"All observers, incidental from the city, during this lengthy process, have been somewhat amazed by the volume of requests, filings, records that have come from the city's astute legal counsel, at least compared to all other entities involved in this," Yelton said,

The case has not cost the city more than $200,000 in legal bills thus far, Fernandez said, adding that she did not yet know how much of the tab was covered with casino funds.