09092015 - News Article - Mayor takes stand to defend self, wife

Mayor takes stand to defend self, wife

NWI Times
September 09, 2015 - 12:30 AM

http://www.nwitimes.com/news/local/lake/soderquist-case-nears-conclusion/article_2d232f9a-0aef-51c7-b8f0-27121d8ca3d4.html

HAMMOND | Lake Station Mayor Keith Soderquist admitted Wednesday to taking money from his election campaign fund and food pantry fund to gamble, but said it was money owed for expenditures he made for those accounts.

Soderquist and his wife, Deborah, are on trial in U.S. District Court on charges of improperly taking money from his campaign fund and the city's food pantry account and failing to record the money taken on federal tax returns.

Soderquist took the stand after the prosecution rested its case earlier Wednesday.

Witnesses for the prosecution used cellphone, ATM,and casino records to try to show how withdrawals were made from the city's food pantry account and Soderquist's campaign committee fund prior to them going to Four Winds Casino in New Buffalo, Mich.

"That was the convenient way to take cash out of the committee to pay me back for my expenses," Soderquist said.

Soderquist indicated the campaign expenses included paying poll workers and other campaign needs going back to 1999 when he first ran for the Lake Station City Council. In the case of the food pantry, Soderquist said he paid mileage to volunteers who picked up goods for the pantry. 

He said he didn't need the reimbursement from the campaign account at the time. He said he had his private sector job and didn't put the expenditures he made out of his own pocket in the original campaign finance reports.

Soderquist said he meant to amend his campaign finance forms to reflect the expenses he had not originally listed, but "I would always procrastinate."

The government's indictment against the Soderquists alleges that between spring 2010 and December 2012, the couple improperly took money from the campaign fund and food pantry while they were losing more than $100,000 at area casinos.

They face charges of conspiracy to commit wire fraud, seven counts of wire fraud and three counts of filing a false income tax form.

Soderquist said he would not use the ATM directly at the casino to withdraw money from the campaign committee account or the food pantry because of the perception it might create.

"Back to the perception thing," he told his attorney Scott King. "I'm not going to use the food pantry card at a casino."

Soderquist said he also did not file bankruptcy when he fell into financial troubles after the loss of his private sector job in 2009 because of perception.

He said even though bankruptcy is legal, filing for it would have ended his career as mayor.

"There are people out there who are haters," Soderquist said.

Instead, he said, he negotiated a settlement with his credit card companies after he stopped making payments for a few months. The credit card companies eventually forgave more than $38,000 worth of debt in 2010, according to government records. In some cases, the debt wiped out represented about half what the couple owed on their cards.

Soderquist said he made more than $80,000 from his private sector job and initially about $55,000 from his job at mayor.  

In addition to negotiating a settlement with his credit card companies, the Soderquists started taking money out of their retirement accounts - mainly ones tied to Keith Soderquist. By 2012, the couple had withdrawn nearly $100,000 combined from their retirement accounts.

Soderquist indicated the money was used to pay debt, but also acknowledged some of the money probably went to gambling. The couple reportedly lost about $140,000 gambling between 2009 and 2012, primarily at Four Winds.

Soderquist indicated his gambling probably increased after he lost his job, but under repeated questioning from Assistant U.S. Attorney Philip Benson he refused to say he was addicted to gambling.  

"No, I don't believe it was a full blown addiction, no," he told Benson.

Seeing the amounts of money lost by the couple that has been displayed during the trial, however, Soderquist said he realized he gambled too much.

"Looking back now, I had a problem and I gambled too much," said Soderquist. He also said he did not believe it was inappropriate to allow his wife to have an ATM card for the food 

pantry account she helped oversee even though he also now believes she gambled too much.