Steve Stenger resigned as St. Louis County Executive this morning after he was indicted on April 25 on three federal counts of bribery, mail fraud and theft of honest services, following a yearlong undercover federal investigation. The indictment was unsealed this morning.
“It was a pay-to-play scheme that involved bribes, paid through political donations in exchange for his official acts in directing others to award contracts – either through St. Louis County or the St. Louis Economic Development Partnership,” said Hal Goldsmith, assistant U.S. Attorney.
Goldsmith spoke to the press after Stenger’s arraignment hearing at the Thomas F. Eagleton Courthouse at 1 p.m. on April 29, where Stenger pled not guilty.
“The investigation involved the cooperation of any number of witnesses and concerned citizens, court-ordered search warrants, court-ordered pen orders, review of thousands of emails, text messages, resulting in the charges today,” Goldsmith said.
The investigation, which began in early 2018, was conducted by the U.S. Attorney’s Office, Federal Bureau of Investigation and the Postal Inspection Service with the assistance of the Internal Revenue Service Criminal Investigations.
The indictment alleges that beginning in October 2014 and continuing through December 31, 2018, Stenger secretly used his official position to aid companies in getting favorable treatment from the county in exchange for campaign contributions. Several of Stenger’s top officials were named in the indictment as being directed to help his donors get county dollars. It alleges that Stenger had a “trustee program,” where individuals would donate $2,500 every quarter to Stenger for a total of $10,000 a year.
One of these trustees was John Rallo and his company, Cardinal Insurance, who obtained insurance contracts through St. Louis County during 2015 and 2016, it states. Rallo and his other company, Cardinal Creative Consulting, obtained a $130,000 consulting contract through the St. Louis County Port Authority in 2016. The indictment documents a conversation between Stenger and Chief of Policy Jeff Wagener, where he talks about the consulting contract being “PR rehab for the county” after the Ferguson unrest. Montel Williams was to be the spokesman.
The indictment alleges, “Rallo and Cardinal Consulting did no actual work under the consulting agreement.”
Rallo allegedly made up falsified information during his monthly reports to the Port Authority’s board. It also claims two other “trustees” were paid out of the contract, even though they also did no work.
When asked if other Stenger “trustees” are being investigated, Goldsmith said that the investigation was ongoing. He said generally that it’s “always possible” that other individuals will be indicted with crimes.
Stenger also allegedly ensured that John Rallo and his company, Wellston Holdings, LLC, obtained options to purchase two properties in Wellston, Missouri which were held by the Land Clearance for Redevelopment Authority of St. Louis County during 2016 and 2017. Rallo’s partner on this deal was also a “trustee.” The indictment documents conversations between Rallo and Sheila Sweeney, the chief executive of the St. Louis Economic Partnership, where she allegedly advised Rallo on how to win the bid on a Wellston property – including the amount to bid in order to beat out his competition.
The indictment also alleges that Stenger made sure a donor’s state lobbying contract was renewed with the St. Louis Economic Development Partnership. At one point, Sweeney was considering “playing it straight” and selecting the cheaper lobbyist contract, according to conversations between Stenger’s top staff in the indictment.
“She took the role,” Stenger said, according to the indictment. “You’re either going to do it or you’re not. Get the F— out. You’re a political person. Every one of our department heads is a political person. You two (Bill Miller and Wagener) are political people, I am a political person, I have to be, I’m in politics. That’s what we do. It’s not the art of f—ing over your friends. It’s the art of how do I work with people I trust and know.”
William Miller, his chief of staff, responded, “It’s the art of staying in power.”
Stenger agreed, “It’s the art of staying in power.”
Miller resigned on April 12.
In another message, Stenger said that he was going to fire her before she made the “wrong” decision. Sweeney, a Stenger appointee, left the partnership in January, though it’s unclear if she was fired.
In a statement from the partnership’s chairman Karlos Ramirez, he said their new leader, Interim CEO Rodney Crim, will continue to cooperate with federal authorities investigating Stenger.
The indictment alleges that Stenger took steps to hide, conceal and cover up his illegal conduct and actions, including making false public statements. It states that Sweeney directed Rallo not to talk with a St. Louis Post-Dispatch reporter and even directed Rallo to take his name off as the registered agent for Cardinal Consulting in the Missouri Secretary of State records.
Sweeney said, “Got to cover him (Stenger)! And me too!!!!”
Rallo replied, “I know, I’ve got you covered.”
Stenger also said to Rallo, “I bent over f—ing backwards for you, and I asked you one simple f—ing thing, talk don’t to the f—ing press.”
Stenger’s attorney has until June 13 to file any pretrial motions.
When asked if Goldsmith is hoping for a speedy conclusion to the case, he said, “In any public corruption matter, particularly one that went to the highest level of St. Louis County government, we run at these investigations. And we are working very hard, along with the FBI and Postal Inspection Services, to conduct the investigation in a proper way.”
If convicted, each charge carries a maximum penalty of 20 years in prison and a $250,000 fine. Stenger received a personal recognizance bond, which means he gave his personal promise to appear at the court proceedings, Goldsmith said.
When asked if that was standard for public officials, he said, “It’s standard for individuals, such as this defendant, who has no prior convictions and there’s no suggestion that he would continue to commit danger to the community or risk of flight.”
St. Louis County Councilman Mark Harder said in a statement, “While this is a sad day for our county government, it’s also a real opportunity for us all to move forward.”
The county council is holding an emergency special meeting tonight at 6:30 p.m. to address the appointment of the next county executive, at the St. Louis County Chamber, Lawrence K. Roos Building, 41 S. Central Ave. in Clayton.
