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Council Bluffs faces special tax if it loses case

December 5, 2012

DES MOINES - The city of Council Bluffs may be forced to levy a special tax to pay two men who claim the city and two police officers targeted them for the murder of a retired white police captain because of their race.

Terry Harrington and Curtis McGhee, both of Omaha, Neb., filed a lawsuit against the city after they were sentenced to life in prison in 1978 for a murder conviction. The men, both black, were accused of killing John Schweer, a retired police captain. Harrington and McGhee were freed in 2003 when the Iowa Supreme Court found prosecutors committed misconduct by concealing evidence of another possible suspect.

Pottawattamie County later agreed to pay $12 million to settle claims against two former prosecutors, but did not admit wrongdoing. That settlement did not resolve claims against Council Bluffs and former police detectives Dan Larsen and Lyle Brown.

The trial in U.S. District Court in Des Moines began Nov. 1, and jurors likely will begin deliberations later this week or early next week.

Schweer was working as a security guard for local car dealerships, and the two Nebraska men say the detectives used threats against a group of young car theft suspects, all black, to trump up evidence, targeting them because of their race.

Harrington is seeking more than $60 million and McGhee more than $50 million.

Council Bluffs had insurance policies to cover against lawsuits and other liabilities, but courts have held that policies from two of the city's insurers contained exclusions that relieved them from paying obligations.

Without coverage, the city will be responsible for paying if jurors return a verdict against the city. State law allows cities to impose a special tax to raise enough money to pay such judgments.

City officials and attorneys involved declined to discuss the potential tax liability or how the city would proceed if a judgment is returned against it.

The city appealed the case involving two insurers to the 8th U.S. Circuit Court of Appeals. Arguments are set for Dec. 12 in St. Paul, Minn.

Lorraine May, a Des Moines appellate attorney who will argue for Council Bluffs before the appeals court, also said she could not discuss pending litigation.

In a separate case, the appeals court in May upheld a federal judge's ruling that Genesis Insurance Co. was not obligated to pay Council Bluffs because McGhee and Harrington were charged in 1977 but the policies were in effect in 2002 and 2003, which means the liability did not occur within the policy's coverage period.

City Attorney Richard Wade declined to comment on the lawsuit against the city or the insurance issue and referred questions to Council Bluffs attorney Mike Sciortino, who also said he wouldn't comment.

"I haven't made any comment on this case since it started and I really don't want to make one now for a lot of different reasons," Mayor Tom Hanafan said of Harrigton and McGhee's case.



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