BY KEITH BENMAN,Times of Northwest Indiana
kbenman@nwitimes.com

CHESTERTON | A Carpenters Pension Fund lawsuit over the $10 million it spent on 55 acres at Coffee Creek in 1999 will be settled by Lake Erie Land Co. buying back all undeveloped parcels.

The repurchase settles a three-year old lawsuit by the pension fund that could have forced current and former officials at Lake Erie Land and NiSource Inc. to take the witness stand in federal court.

The original pension fund purchase was induced by bribes paid to a top carpenters union official, who later went to federal prison along with three others. No Lake Erie or NiSource officials were charged in the case.

NiSource Inc. spokesman Karl Brack said the price Lake Erie is paying to buy the land back is part of a confidential settlement signed by a federal judge just this week.

Lake Erie is a NiSource subsidiary.

A joint release put out by the pension fund and Lake Erie said the settlement was in the best interests of all involved.

" ... although Lake Erie did nothing wrong in connection with the original sale and believes its own claims were supported by the evidence, the repurchase of the property better serves the interests of all concerned and removes the impediment to further development of Coffee Creek posed by additional litigation," said John Martin, a lawyer for Schiff Hardin LLP, which represented Lake Erie.

The pension fund's lawyer, Drew Peel, similarly said the pension fund did nothing wrong in the deal and believes its own claims in the lawsuit were supported by the evidence.

"Lake Erie's repurchase of the properly, coupled with settlement payments and benefits received from other defendants and the avoidance of further litigation costs and risks, made settlement with Lake Erie the prudent course for the Fund at this time," Peel said.

At one time, the pension fund has sought up to $51 million in treble damages from Lake Erie. The pension fund claimed it was the victim of a racketeering scheme engineered in part by Lake Erie officials.

The Coffee Creek scandal forced then-state Democratic Chairman Peter Manous to resign in early 2003. He was later indicted and pleaded guilty to defrauding the pension fund, which he represented in the deal. He was given a sentence of 2 years and three months after agreeing to cooperate with federal investigators.

Also sent to federal prison was former Carpenters Union boss Gerry Nannenga, real estate agent Kevin Pastrick and Pastrick's partner, C. Paul Ihle.

Pastrick is the son of former East Chicago mayor Robert Pastrick.

The four sent to prison also were a target of the pension fund lawsuit. Nannenga and Manous both agreed to pay the pension fund $125,000. Ihle agreed to pay $75,000.

Kevin Pastrick forked over $150,000 in May to settle. Pastrick also agreed to appear as a witness for the fund at any trial.