SCHNEIDER | A garbage-to-ethanol plant proposed for this rural town will be taxpayer-owned the day it opens for business, county officials confirmed.

But a politically connected and sometimes controversial lawyer, Michael Pannos, a former state Democratic Party chairman, did legal work to help secure the land in Schneider for the plant, the owner of the trash-to-ethanol enterprise, Earl Powers, said.

Lake County Solid Waste Management District Director Jeffrey Langbehn sought to dispel reports that Pannos has a controlling stake in the plant, which is being developed and funded by Powers, president and CEO of Powers Energy of Evansville.

"Mike Pannos has no interest whatsoever in the plant, no ifs, ands or buts about it, and the district's future ownership takes care of 99 percent of whatever shenanigans there may be," Langbehn said.

The solid waste district inked a contract last year that will direct the county's municipal waste to the plant at a cost of $17.50 a ton for the next two decades.

Langbehn said last week he wants to reassure the public that although no public money is being spent on construction of the $285 million project, the county waste district will own the land and buildings as protection against its being abused by anyone for private gain at public expense.

Langbehn said the contract between Powers and the solid waste district requires Powers to raise private money to build the plant, which would use heat and fermentation to process organic waste into ethanol and separate out nonorganic materials for sale.

"This way we didn't have to go out and write our own check for $280 million," Langbehn said.

"The day before Earl turns it on, it is transferred over to the district. Earl owns the licensing agreement. Earl has the total authority over the sale of ethanol, the sale of the recyclables and revenue from it. We get $2.50 a ton to the district and host community fees, the taxes. He gets to operate the plant."

Langbehn said there is no liability to the county's taxpayers if Powers pulls out unexpectedly or technical difficulties arise.

"We could turn around and sell something we didn't have to pay for," Langbehn said of the county.

Political connections

Powers acknowledged last week he has hired Pannos, a veteran attorney, to do legal work on acquiring the plant's 275-acre site, the Huber Sod Farm near U.S. 41. He said that he, not Pannos, is in charge of the effort to create as many as 600 jobs, save county municipalities $122 million in garbage-disposal fees and reduce the country's reliance on foreign energy.

The Indiana attorney general's office has been locked in a legal battle with Pannos and fellow East Chicago political insider Thomas Cappas, alleging they have reaped "enormous" salaries while at the helm of East Chicago Second Century Inc., an embattled private development firm accused of squandering millions in public casino revenue.

Pannos and Cappas, who were investors in the original East Chicago Showboat casino that opened in 1997, are believed to have made millions when Harrah's bought the East Chicago riverboat a year later. Shortly after, they won a deal from the administration of former East Chicago Mayor Robert Pastrick to form Second Century, which received a share of public development dollars generated by the casino.

Second Century attorney J. Lee McNeely, who has defended Pannos and Cappas in state and federal courts, said Pannos and Cappas are victims of a political vendetta by current East Chicago Mayor George Pabey, and that they have promoted economic development in East Chicago. Pannos could not be reached for comment.

Schneider Town Council members did not return Times calls seeking more information about the proposed ethanol plant. Part of the farm rests inside the town while another portion rests on unincorporated land.

In order for Powers to buy the land, Schneider will have to annex the unincorporated farmland next year.

Powers said anyone thinking he is a front man for Pannos is mistaken.

"It's laughable," Powers said. "We are using my money, and I think I'm going to run my own money.

"I've met Mike Pannos three times. Mike Pannos is Neil Fribley's attorney, of Platinum Financial. I met him once ... for lunch, him and Neil Fribley. I did hire him because he is an attorney and in Lake County but only on a limited basis."

Corporation records released by the Indiana secretary of state's office indicate Neil W. Fribley is resident agent for Platinum Financial Services LLC, 9223 Broadway, Merrillville.

Langbehn said of Fribley, "I understand he is the just the guy Earl contracted with, the financial guy who is getting the money. The money, as I understand it, is coming out of the hedge funds market in New York."

Fribley could not be reached for comment.

Clifford Duggan, attorney for the Lake County Solid Waste Management District, declined to provide The Times with documents regarding the plant's financial backing, saying they contained confidential, proprietary information.

Ethanol plant advocate

Lake County Commissioner Gerry Scheub, D-Schererville, who introduced Powers to Lake County and has championed the ethanol plant for more than three years, said he has heard some concern regarding Pannos' reported involvement in the ethanol plan. Scheub expressed a mixture of concern and anger regarding the reports.

"Conspiracy theories? That's Lake County, and there are more names than Pannos coming in," said Scheub, a key member of the solid waste board of directors.

Scheub said he and the board have taken great pains to investigate the feasibility of Powers' ethanol process and the project's financial viability to protect the county's interests.

"After three years of due diligence, Mike Pannos' name never surfaced," Scheub said. "Then Earl and Mike (Pannos) came to talk to me down in Culver (Ind.) about six months ago. Earl wanted to see my farm, and he was staying with Mike, who lives on the lake. It was a 15-minute meeting. We never discussed the ethanol plant. Earl (later) told me that Mike is not involved in it."

Scheub said his interest in garbage disposal alternatives arose from his battle 13 years ago to kill a proposed landfill east of Lowell. He said he also wants to avoid municipalities having to pay as much as $60 a ton to have waste trucked to downstate landfills.

"Earl Powers, because this would be the first plant in the United States, locked in his rate at $17.50 a ton for 20 years," Scheub said. "How can I walk away from that?"

Times reporter Christine Kraly contributed to this report.