Commissioners Cancel Contract for Rudy Clay Crony; Petalas Gets Sued

Former contractor alleges that County Attorney John Dull accused Auditor John Petalas of “aiding and abetting a felony” and “committing a misdemeanor.”

November 6, 2017-A former attorney for the Gary Sanitary District has filed suit against Lake County Auditor John Petalas after the Lake County Commissioners failed to renew his contract when it expired.  David Gilyan is founder and owner of DSG Lake, LLC.  Gilyan was also the attorney for the Gary Sanitary District when it was run by Rinzer Williams in the Rudy Clay administration.   In a scathing 35 page Complaint, Gilyan alleges that Petalas caused the Lake County Commissioners to non-renew his contract because he had pursued expired and “dummy” mortgage exemptions against “politically powerful” individuals.  A mortgage exemption provides a tax break of $30 on a homestead property and $90 on a business property.

According to the lawsuit, filed in Porter Superior Court last week, former Lake County Auditor Peggy Katona engaged the services of DSG Lake, LLC (DSG) in 2010 to “examine the propriety of real property tax deductions.”  Under the terms of the contract, DSG was to retain 25% of all property taxes collected through their sleuthing efforts.  DSG worked as a contractor from September 2010 until December 31, 2016 when the Lake County Commissioners did not renew the contract according to the Complaint.

According to a source within the Auditor’s office, DSG provided a list of 4 politically active individuals whom he alleged had improper or questionable mortage exemptions.  The source explained that each of the exemptions was investigated by Auditor staff and 3 of the 4 were found to be valid exemptions.  1 exemption was removed.  The Gazette confirmed with one of the individuals on the list that he was called into the Auditor’s office in late 2016 and asked about the mortgage exemption.  “I provided them documentation and everything was fine” the individual told the Gazette.

During the course of the contract negotiations, Gilyan enlisted the aid of former Director of the Gary Sanitary District and politically connected attorney Rinzer Williams.  Gazette readers will remember Williams as the Attorney for Calumet Township Trustee Kimberly Robinson who went on the infamous Aruba trip.  According to the source, Rinzer approached Commissioner Kyle Allen who attempted to push through a one year extension to the DSG contract.  Gilyan states in his Complaint that Commissioners Kyle Allena and Micheal C. Repay signed an extension of the contract but did not do so in a public meeting.  Commissioner Jerry Tippy did not sign off on the contract.  The Commissioners have repeatedly come under fire for signing contracts outside of public meetings and, earlier this year, Commissioner’s Attorney John Dull launched a polemic against Indiana Public Access Counselor Luke Britt after he suggested such actions were illegal.

Dull also is alleged to have added fuel to the fire by stating that Petalas was “aiding and abetting a felony” and “committing a misdemeanor” by interfering in the collection of mortgage exemptions.   Regardless of the outcome of the case, Lake County taxpayers are on the hook for legal fees.

You can see the full Complaint by clicking here-Gilyan vs. Petalas Complaint



  1. Another writer at another news source wrote that mortgage exemptions can save a taxpayer $3,000 a year. Hahaha! Thank you gazette for giving us the real fugues.

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