Update, 10:57 a.m., Friday, May 3: Former St. Louis County Executive Steve Stenger pleaded guilty to three charges of theft of honest services, bribery, and mail fraud on Friday morning. The former county official resigned Monday following a federal indictment that was issued the previous Thursday. Prosecutors will not be seeking further charges. Stenger will be sentenced August 9.
Update, 12:59 p.m., Thursday, May 2: Former St. Louis County Executive Steve Stenger is scheduled to plead guilty in front of U.S. District Court Judge Catherine D. Perry on Friday. Stenger was indicted on three charges of theft of honest services, bribery, and mail fraud on Monday. He resigned the same day. He will appear at the Thomas F. Eagleton Courthouse at 10:30 a.m. tomorrow morning.
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Original story:
The official government page of the now-resigned St. Louis County Executive Steve Stenger displays the following quote:
“We Move Forward With Common Purpose In Establishing Extraordinary Goals, During What Are Anything But Ordinary Times.”
Anything-but-ordinary times indeed.
Shortly before 10 a.m. on Monday, Stenger resigned after an unsealed federal indictment issued on Thursday revealed that a grand jury is charging him with three counts of theft of honest services, mail fraud, and bribery. The 44-page document alleges that from October 2014 to December 31, 2018, Stenger awarded contracts to John Rallo, a St. Louis businessman with ties to the insurance industry, in exchange for campaign contributions, and then attempted to cover up the deals, among other charges.
In a letter to County Counselor Peter Krane, Stenger wrote: “It has been an honor to serve the people of St. Louis County as St. Louis County Executive. The past four years have been some of the most fulfilling years of my professional career. I have determined after much thought that it is in the best interest of our County and my family that I resign as St. Louis County Executive effective immediately.”
Stenger then appeared in court at 1 p.m. with his lawyer Scott Rosenblum and entered a not-guilty plea. He was released without bail, surrendered his law license, and it’s unknown when his next court appearance will be.
In an emergency County Council meeting held Monday at 6:30 p.m., Council Chairman Sam Page was voted in as Stenger’s replacement, serving as interim county executive until the November 2020 election. Page won the slot with a vote of five ayes.
Who is Steve Stenger?
Stenger, a Democrat, lawyer, and accountant, was first elected to the St. Louis County Council (6th District) in 2008, winning 53 percent of the vote against Republican John Campisi. He served as second term, winning re-election in 2012. He won the Democrat nomination for county executive in 2014 and beat Republican Rick Stream by just 1,768 votes. He won re-election as county executive in 2018.
What does the indictment charge?
The indictment is broken down into three parts. First, it states that Stenger, a public official, solicited and accepted money for campaigns from Rallo, who owned Cardinal Creative Insurance Group, LLC. The State of Missouri Revised Statute 576.010 (Bribery of a Public Servant) states that it’s a felony for a person to discuss a benefit with a public servant for his or her recommendation, decision, or action.
Further, the indictment says that Stenger “provided favorable action” on Rallo and his companies’ behalf. Stenger allegedly directed county employees to award contracts to Cardinal Insurance; told the St. Louis Economic Development Partnership’s ex-CEO Sheila Sweeney to award a Port Authority consulting contract to Cardinal; told Sweeney to award land sale contracts to another one of Rallo’s companies, Wellston Holdings, LLC; and also told Sweeney to award a lobbying contract to an unnamed company, identified in the indictment as Company One.
Last, it charges that Stenger, Sweeney, and Rallo made an effort to hide these activities. It states that they didn’t tell the Port Authority Board that Rallo contributed to Stenger’s campaign, didn’t tell the board that Stenger had told Sweeney to award the consulting contract to Cardinal Insurance, advised Rallo to remove his name from Cardinal Consulting Group, and lied in public statements.
Who is John Rallo?
Rallo, of Clayton, owned St. Louis bars and nightclubs before starting Cardinal Creative Insurance Group in 2006. In October 2014, the indictment states, Rallo and Stenger were introduced and had dinner at Sam’s Steakhouse in South County. Stenger was campaigning for his county executive seat and accepted $5,000 from Rallo with the mutual understanding that if elected, Stenger would help Rallo get insurance contracts in the county.
“During that dinner, Rallo told STENGER that he was tired of giving money to politicians and not getting anything in return,” the indictment states.
Rallo also bought Stenger’s dinner.
Throughout 2015, 2016, 2017, and up to April 2018, Rallo made political donations to Stenger. He was a member of Stenger’s “trustee” program, and donated $2,500 every three months, according to the indictment.
Who is Sheila Sweeney?
Sweeney, the former CEO of the St. Louis Economic Development Partnership, left the organization in January of this year. She was appointed on Stenger’s recommendation. Sweeney was also the executive director of the Port Authority.
The indictment states that Rallo and Sweeney first met in October 2015 to discuss a consulting contract. Eventually, Sweeney pushed through, via the Port Authority board, Cardinal’s bid: a six-month renewable term at $100,000 per term. The entire bid was a one-and-a-half-page letter, and there were bids lower than Cardinal’s.
“Port passes your contract. Good to go,” Sweeney wrote to Rallo on May 10, 2016.
Also in 2016, Rallo approached Stenger about buying and developing two vacant properties, Wellston Industrial and Plymouth Industrial, the indictment states. The Land Clearance for Redevelopment Authority, whose board Sweeney served on, held the properties. Stenger, the indictment alleges, directed Sweeney to work with Rallo to purchase the properties.
The indictment also indicates that Sweeney asked Rallo to cover up their dealings. In December 2017, and in response to a series of investigative stories by the St. Louis Post-Dispatch, Sweeney asked Rallo to remove his name from Cardinal Consulting’s Missouri Secretary of State records.
“Got to cover him [STENGER],” she wrote to Rallo. “And me too!!!!”
Rallo replied, “I know, I’ve got you covered.”
Are there any guesses as to whom “Company One” could be?
The St. Louis Post-Dispatch reported that Company One, the unnamed lobbying company Stenger allegedly told Sweeney to award a contract to, is likely John Bardgett & Associates according to St. Louis Economic Development Partnership records. In an email to the Post-Dispatch, Bardgett said: “This has occurred through the administrations of 5 county executives of different party affiliations — we do not, have not and never will place any conditions on any contribution to any organization.”
How long did the investigation into Stenger take?
A year, and it’s still ongoing. Federal prosecutor Hal Goldsmith said that the U.S. attorney’s office started building a case against Stenger in 2018, and the FBI, Postal Inspection Service, and IRS cooperated in the investigation. Witnesses also cooperated with some meetings and phone calls being recorded.
The St. Louis Post-Dispatch, largely through the reporting of Jeremy Kohler and Jacob Barker and Tony Messenger’s column, have been detailing Stenger’s moves for years. Robert and P. David Glarner, who donated $365,000 to Stenger’s campaign, received millions in public subsidies to rebuild Northwest Plaza in St. Ann, where the county holds a longtime lease on office space, the paper reported.
Better Together, the organization proposing a St. Louis city-county merger, originally picked Stenger to be its transition metro mayor, should the issue pass on the November 2020 ballot. When Stenger’s administration was subpoenaed in March, Better Together withdrew its amendment from the Secretary of State’s office and removed Stenger’s name.
Why is Stenger being charged with mail fraud?
The indictment states that Stenger used the mail in an attempt to carry out the bribery scheme, mailing one check for $5,000 from Cardinal Creative Consulting on October 17, 2016, a second for the same amount on November 15, 2016, and a third for the same amount again on December 19, 2016.
How long of a prison sentence could Stenger face?
At least “a handful of years,” according to the St. Louis Post-Dispatch.
Who is replacing Stenger, at least temporarily?
At an emergency County Council meeting Monday night, the council approved its chair, Sam Page, a Democrat from Creve Coeur, to act as interim county executive until the November 2020 election. Page is a physician at Mercy Hospital and anesthesiology professor at St. Louis University’s medical school. He has served as the chairman of the council since 2017, ran for lieutenant governor during the 2008 election, and previously served three terms as a state representative. Over the past six months, he has been critical of Stenger, as has the rest of the council. Councilman Tim Fitch called for Stenger to resign in early April.
The council did not allow public comment in the meeting, which was the subject of controversy. Hazel Erby, a Democrat from University City, was the only “no” vote for Page; she took issue with the lack of public comment as well as the rushed nature of the meeting.
The next race for the county executive seat won’t be until 2020. To fill Page’s vacant seat, an election could be held as early as August. Party leaders of the townships in the 2nd District, which covers the area from Hazelwood to Creve Coeur, would select the candidates.
