5 Things To Know About The Stenger Indictment | St. Louis Public Radio

5 Things To Know About The Stenger Indictment

Apr 30, 2019

St. Louis County Executive Steve Stenger was indicted by a federal grand jury on Thursday with bribery, mail fraud and depriving citizens of honest services of a public official. He entered a plea of not guilty on Monday. He also resigned from office.

Here are five key points in the allegations outlined in the indictment:

1. Stenger allegedly ‘deprived citizens of honest services’

It’s a mouthful, but “depriving citizens of honest services of a public official,” is a catch-all phrase for corruption. The idea is that if you hire someone — whether paying them or electing them to office — you are entitled to their “honest services.” In other words, you have a right to not be defrauded.

It’s part of the federal mail and wire fraud statute. Stenger is facing a mail fraud charge because one of his schemes involved sending checks through the mail.

Federal prosecutors alleged that then-St. Louis County Executive Steve Stenger provided favors on behalf of campaign contributor John Rallo, alleging he used the county’s Port Authority and the St. Louis Economic Development Partnership to secure deals for Rallo.

Rallo, who has not been charged, couldn’t be reached for comment Monday about the allegations in the indictment.

MORE: Page Picked To Succeed Stenger As St. Louis County Executive

The indictment outlines an October 2014 dinner between Stenger, Rallo and a person identified in the indictment as “SW.” During a dinner at a south St. Louis County steakhouse, Stenger accepted a $5,000 campaign contribution from Rallo.

According to the indictment, “during the dinner, Rallo told Stenger that he was tired of giving money to politicians and not getting anything in return. Stenger made statements to assure Rallo that, if elected county executive that he would work to help Rallo get St. Louis County contracts.”

2. John Rallo’s role in the bribery allegations

Rallo continued to make campaign contributions to Stenger throughout 2015, 2016, 2017 and 2018 in exchange for Stenger’s help securing insurance contracts for Rallo’s business, according to the indictment. Rallo stood to gain $50,000 in commissions from the insurance contract.

Ultimately, the county decided to stay with the old insurance provider, nixing the deal with Rallo.

Stenger also helped Rallo get a consulting contract to provide marketing to address negative publicity from the unrest in the county after a Ferguson police officer shot and killed Michael Brown. Rallo had no experience in marketing or consulting.

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“While having drinks in the lobby of the Ritz-Carlton hotel in Clayton, Rallo told Stenger that obtaining a consulting contract would make up for the insurance mishap,” according to the indictment.

Stenger appointed Sheila Sweeney to be the head of St. Louis Economic Development Partnership in 2015.

“Stenger told Rallo that Sweeney would do what Stenger told her to do,” the indictment stated.

At a meeting at Sweeney’s office, Rallo asked to be paid $350,000 for the consulting contract. Sweeney told them she didn’t think she could get that much but would ask Stenger.

Though there were other bids from companies with marketing experience, Sweeney recommended the bid from Rallo’s company. The bid consisted of a one-and-half-page letter.

MORE: Stenger Pleads Not Guilty In Federal Pay-To-Play Charge, Resigns As St. Louis County Executive

Sweeney obtained a $100,000 contact for Rallo through the St. Louis County Port Authority. She later modified the contract to $130,000 without the port authority board’s approval.

“Sweeney had added the additional $30,000 to the consulting contract because Stenger had directed her to give a job or contract to an individual, JC,” the indictment said. JC was a “close associate of a public official who had helped Stenger get out the vote in the November 2014 County executive election,” and the contract was to be “payback for that.”

It’s the payments to JC that led to the mail fraud charge, because Rallo’s company mailed them three $5,000 checks.

Rallo did no actual work under that contract, the indictment stated, instead lying about it in reports he submitted to Sweeney.

3. The Wellston Deal

Stenger also helped Rallo and a group known as the Wellston Holdings Company buy two business parks in Wellston for development purposes. In exchange for Stenger’s help, Rallo held fundraisers so his friends and associates would make political donations to Stenger.

Stenger made Rallo part of a group of high-level campaign donors in exchange for his promised donations of $2,500 a quarter, for a total of $10,000 a year. Rallo then recruited another member of Wellston Holdings to become a high-level donor. Rallo and another unnamed member donated a total of $50,000 to Stenger. They also obtained other political donations for Stenger.

Stenger told Sweeney to ensure the sale of a Wellston business park to one of Rallo’s companies and gave detailed instructions regarding the bidding process, including the amount to offer. Rallo submitted his bid late, but it was still accepted. Rallo purchased both properties for $525,000.

Throughout the purchase, the indictment alleges, Stenger continued to ask for campaign contributions.

4. The cover-up

Stenger directed Rallo to remove his name from corporate documents filed with the state. Stenger and Sweeney also hid from the port authority that Rallo was a campaign contributor.

Stenger also directed Rallo not to talk to a St. Louis Post-Dispatch reporter regarding the Wellston deal.

Stenger told Rallo not to “talk to the f---ing press. I bent over f---ing backwards for you, and I asked you one simple f---ing thing, don’t talk to the f---ing press.”

5. The penalties Stenger could face 

Each of the three charges — bribery, mail fraud and depriving citizens of honest services — carry a maximum penalty of 20 years in prison and a $250,000 fine. Restitution is also mandatory.

However, it’s unlikely that Stenger, as a first-time offender, will receive that harsh of a sentence.

Follow Beth on Twitter: @bhundsdorfer

St. Louis Public Radio's Rachel Lippmann contributed to this article.

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