City fights Barden deal

May 30, 2006 4:12 AM

A contract change between the city of Gary, Ind., and riverboat casino owner Don Barden is being challenged by Mayor Rudy Clay who claims the deal is illegal.

Prior to resigning, Clay’s predecessor Scott King negotiated the arrangement that resulted in the casino paying the city less than it previously had. Then King went to work for Barden as a "special consultant."

The new arrangement can cost the city as much as $1.2 million.

Clay was quoted by the Associated Press as saying, "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”¦that just don’t smell good to me."

Barden, who also owns and operates Fitzgerald’s Casino in downtown Las Vegas, bought Donald Trump’s riverboat in Gary that is situated adjacent to Barden’s Majestic Star Lakefront Casino. Following the purchase, Barden renegotiated his agreement with the city that reduced his monthly payments by some 25%.

Although the deal was signed on Oct. 19, 2005, Husain Mahmoud, Gary finance director, said he was not aware of the change until February, 2006, when one of the monthly checks was significantly smaller than usual.

A copy of the document didn’t reach city officials until April 12.

By law, city officials said, the new contract was illegal since it did not go before the Board of Works for approval.

King, who resigned March 24 after 11 years in office, said he did not know why the contract was never forwarded for the board’s approval. He denied any collusion and said the contract predated "any professional relationship I developed with Don Barden."