ST. LOUIS COUNTY (KMOV.com) – Former St. Louis County Executive Steve Stenger is expected to plead guilty to charges leveled in a federal indictment which painted a picture of a broad pay-to-play scheme.
The US Attorney’s Office announced Monday that a grand jury indicted Stenger Thursday on three counts of mail fraud. Prosecutors said it stems from an overall scheme to deprive the citizens of St. Louis County of honest services through a bribery scheme.
Stenger resigned his position Monday.
In a press conference following Stenger's court appearance, prosecutors said the year-long investigation was conducted by multiple agencies, including the IRS and the United States Postal Inspectors.
Prosecutors had multiple cooperating witnesses and went through thousands of emails.
The investigation, which began in 2018, went through both the primary county elections and those held in November. It is Department of Justice policy to not "adversely affect" elections, so their investigation remained quiet.
Stenger was released on his own recognizance and did not have pay bond.
The 44-page indictment lays out in great detail what prosecutors call the scheme to defraud and deprive the citizens of St. Louis County.
Prosecutors specifically focus on Stenger’s dealing with a man named John Rallo. According to the indictment, Rallo had a background in the insurance business and for a period of time owned and operated several St. Louis area bars and nightclubs. He started a company called Cardinal Insurance.
The indictment says Stenger, a Democrat who was elected to his second term in November, and Rallo were introduced in October, 2014. The indictment then lays out several communications and interactions between the two of them. Rallo, according to prosecutors, made his first donation to Stenger’s campaign on the night they met and made several more contributions in the months and years thereafter.
Prosecutors say the donations were made “with the understanding from Stenger that in exchange he would help Rallo and Cardinal Insurance get insurance contracts with St. Louis County and, ultimately, help Rallo get a consulting contract with the St. Louis County Port Authority.” The indictment further alleges that Stenger also helped Rallo and a group known as Wellston Holdings, LLC obtain land in Wellston, Missouri for development purposes.”
The indictment also alleges that Rallo donated tens of thousands to Stenger’s campaign and hosted several political fundraisers for Stenger.
The indictment names Rallo in detail, but also outlines interactions with Shelia Sweeney. She was previously head of the St. Louis Economic Development Partnership, at Stengers recommendation. Stenger reportedly told Rallo that Sweeney would do what Stenger told her to do.
Communications between Rallo and Stenger, outlined in the indictment, show them discussing a possible consulting contract with the Partnership. Rallo’s company was awarded the contract, through the Partnership’s Board, for $100,000, though Sweeney later increased the amount to $130,000 without board approval.
Throughout all the communications, Stenger continued to solicit political donations from Rallo.
In one conversation, Stenger wrote: “John can we receive your trustee check before the end of the quarter so I can count it. :) “
Rallo twice sought a contract with the county insurance services, but was not selected either time. The County Director of Administration, Pam Reitz, determined not to award the contract to Rallo’s company. Stenger had discussions with several of his top staff about firing her, because she was not following his directives, prosecutors say.
According to the indictment, things started to unravel when, in August of 2017, a St. Louis Post Dispatch reporter submitted public records requests for information about Wellston Holdings. Sweeney directed Rallo not to speak with the reporter.
According to the indictment, Sweeney stated: “Don’t talk if they call you. F---. No don’t meet him. F---."
The Post-Dispatch continued its reporting into 2018, at which time, prosecutors also say Stenger directed Rallo not to talk with reporters.
Stenger wrote: “You can’t talk to the [expletive] press. I bent over [expletive] backwards for you, and I asked you simple [expletive] thing, don’t talk to the [expletive] press. And I am you, you’re gonna [expletive] kill yourself, alright, you’re gonna kill yourself with this [expletive].”
The indictment is very detailed and delves much further into conversations between Stenger’s top staffers, Sweeney and others. It’s clear, although not expressly stated, that some of the verbal conversations were recorded.
It also appears to leave the door open for additional investigation or possible indictments.
Stenger has repeatedly denied wrongdoing.
If convicted, each charge carries a possible sentence of up to 20 years in prison.
Stenger will be in court Monday afternoon for an initial appearance and arraignment.
Stenger resigned his post as County Executive via a letter to the council on Monday morning.
The letter reads:
Dear Mr. Krane,
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 an my family that I resign as St. Louis County Executive effective immediately.
Steven V. Stenger
Page named interim executive
At an emergency meeting Monday night, the St. Louis County Council voted 5-1 (with one abstention) to name District 2 Councilman Sam Page as the interim executive. Hazel Erby was the only dissenting vote. A special election will be held for the post in November 2020.
Late last month, St. Louis County was served a subpoena for federal investigation into Stenger’s administration. The subpoena commanded the county to produce all text communications, notes and phone records between the county executive Steve Stenger, senior staff and current and former county employees regarding county contracts.
Since the subpoena was issued, Councilman and former St. Louis County Police Chief Tim Fitch called for Stenger to step down.
Over the past few weeks, two members of Stenger’s administration, Lance LeComb and Bill Miller, announced their resignations.