Stenger Pleads Not Guilty In Federal Pay-To-Play Charge, Resigns As St. Louis County Executive | St. Louis Public Radio

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

Apr 29, 2019

Updated 4:15 p.m., April 29 with more information from Stenger's court appearance — Former St. Louis County Executive Steve Stenger has pleaded not guilty to federal charges that he steered county contracts to big campaign donors.

Stenger appeared in front of U.S. Magistrate Judge Noelle Collins Monday, hours after resigning as county executive. He was released without having to pay bond, but will not be allowed to travel outside of eastern Missouri without permission.

Stenger did not address the media after his initial appearance. His attorney, Scott Rosenblum, said the charges were not a surprise.

“We’ve been in contact with the United States attorney’s office for quite a while, so we’re familiar with the case, and we plan to orchestrate our next move from there,” Rosenblum said. “That’s all I’m going to say.”

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

A federal grand jury charged Stenger with honest services bribery and mail fraud. If convicted, he could face a maximum penalty of 20 years in prison and a $250,000 fine.

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“It was a pay-to-play scheme obviously that involved bribes paid through political donations in exchange for his official acts in awarding, or directing others to award contracts either through St. Louis County, or the St. Louis Economic Development Partnership and the Port Authority,” said Assistant U.S. Attorney Hal Goldsmith, who is prosecuting the case for the federal government.

Goldsmith said the investigation, which started in early 2018, is ongoing, and would not rule out future indictments, or more charges for Stenger.

“The undercover investigation involved the cooperation of any number of witnesses and concerned citizens. It involved court-ordered search warrants and court-ordered pen orders. It involved actually the review of thousands of emails, the thousands of text messages,” he said. Pen orders authorize wiretaps or other forms of electronic monitoring.

Stenger was released without having to pay bond, but he will be under pretrial monitoring. Goldsmith said Stenger is also expected to surrender his Missouri law license.

Neither Goldsmith nor Stenger would comment or whether federal prosecutors were involved in the decision to resign and surrender his license.

The charges

Stenger is accused of five separate schemes to “defraud and deprive the citizens of St. Louis County of their right to his honest and faithful services, and the honest and faithful services of the St. Louis Economic Development Partnership’s Chief Executive Officer, through bribery and the concealment of material information,” federal prosecutors wrote in a statement issued Monday in announcing the indictment. They include ensuring:

  • Cardinal Insurance, led by Stenger supporter John Rallo, received insurance contracts from the county in 2015 and 2016;
  • Rallo’s consulting company, Cardinal Creative Consulting, got a 2016 contract to work with the St. Louis County Port Authority;
  • In 2016 and 2017, Rallo and his company Welston Holdings LLC had the option to purchase two properties in Wellston from the Land Clearance Redevelopment Authority;
  • An unnamed company got a state lobbying contract from the St. Louis Economic Development Partnership in exchange for campaign donations

Inside the Stenger indictment: 5 things you should know about the federal charges against the St. Louis County executive

Stenger’s adversaries have long accused him of granting contracts to campaign donors. For instance: Mark Mantovani made the Northwest Plaza deal a major emphasis of his unsuccessful 2018 Democratic primary campaign. Stenger also came under fire for how he interacted with the St. Louis Economic Development Partnership.

Stenger has long denied any wrongdoing with how he handled county contracts. He said earlier this year that overlap in who donates to him and who secures contracts is inevitable with the high costs of running a county executive campaign.

Rallo, with Cardinal Creative Consulting, also did not respond to a request for comment.

St. Louis County Councilman Sam Page (right) is a potential candidate to take over the county executive's office from Stenger.
Credit File photo | Andy Field | St. Louis Public Radio

Succession plan

St. Louis County’s charter directs the county council pick a Democrat to fill out the rest of his term.

The council could effectively choose any Democrat they want — including sitting state lawmakers or a non-elected official as Mantovani. But a more likely scenario is that a member of the council would be Stenger’s replacement.

One strong possibility is Page, a former state lawmaker who has been the council’s chairman for the past three years. If Page would want to take on the job, he would likely get strong support from the rest of the council — including the three GOP members.

But Page has indicated in the past he wasn’t interested in becoming county executive. The county charter mandates that he would have to give up his job as an anesthesiologist, which would mean he would have to take a substantial pay cut even if he’s only county executive through 2020.

Another possibility is Councilwoman Hazel Erby, a University City Democrat who is the council’s most-senior member. After Stenger was elected, Erby was the only consistent Stenger critic on the council — meaning she had little influence to get her priorities to Stenger’s desk.

But Erby’s influence over policy increased dramatically after the 2016 election season. She got the council to approve a longstanding desire to deliver more contracts to women and minorities. And she recently secured county money to help overhaul the America’s Center Convention Complex in downtown St. Louis.

If Erby, Gray or Councilwoman Lisa Clancy were selected as county executive, they would be the first woman to hold the post. The person picked for the job would serve until after a special election during 2020.   

St. Louis County Councilman Tim Fitch called for Stenger's resignation weeks ago. With Stenger out, county government can now focus on its budget issues, Fitch said.
Credit File Photo I Carolina Hidalgo | St. Louis Public Radio

Local politicians react

Mark Harder, a Republican from Ballwin who represents the council’s 7th District, said he and his colleagues have a big decision to make.

“We’re all trying to understand our positions, understand the important task we have before us. And whoever we pick will be the county executive for the next year and a half — and could go on to an election situation,” Harder said.

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Third Ward Councilman Tim Fitch, R-St. Louis County, said the announcement was not a surprise to him.

“That’s why I called for his resignation several weeks ago,” Fitch said. “I felt it going in that direction based on my experience with the criminal justice system.”

Fitch said he hoped Stenger’s resignation would allow the county to move past the “dysfunction” of the last four months and focus on its serious budget issues.

Fifth Ward Councilwoman Lisa Clancy, D-Maplewood, said she would wait to comment on the news until she had a chance to read and digest the indictment. Erby called the news “sad” and that she was reeling from the announcement. Council members Rochelle Walton Grey, D-Black Jack and Ernie Trakas, R-St. Louis County, did not immediately respond to requests for comment.

St. Louis Mayor Lyda Krewson, who had been a close political ally of Stenger, said on Twitter that he had made the right decision to step down, and that she would work with whoever was picked to be county executive.

“These are very serious charges. This clearly would’ve had a negative effect on the county executive’s ability to govern. That affects the whole region," she said.

St. Louis County Executive Steve Stenger speaks to reporters after narrowly winning a primary election in August 2018.
Credit Carolina Hidalgo | St. Louis Public Radio

Full collapse

The indictment marks a startling collapse of political support for Stenger. When he narrowly won election to the county executive post in 2014, he had the support of six of the seven members of the St. Louis County Council — giving him free reign to institute his agenda.

But that stout majority began to crumble quickly, especially when the council’s two Republicans started voting against Stenger’s initiatives. Once council members Gray and Trakas were elected in 2016, Stenger no longer had a functioning majority of allies on the council.

Previous supporters, like Councilman Page, turned against him after the 2016 election. Page, D-Creve Coeur, accused Stenger of being duplicitous and vindictive. Page ultimately became a leader of an opposition bloc of council members that bedeviled Stenger on a multitude of issues. After the 2018 election, every single member of the county council was considered a Stenger antagonist.

Despite the acrimony, Stenger was able to get reelected by narrowly edging out Mantovani last August. And he was primed to become the ‘metro mayor’ under a city-county merger plan, which would have given him substantial power over the direction and operation of a united St. Louis and St. Louis County.

But things quickly evaporated for Stenger after his administration got hit with an extensive federal subpoena. Although it denied a connection, the Better Together merger organization changed its petition to effectively remove Stenger as the first metro mayor. And Stenger basically went underground, barely talking to reporters as news of the subpoena descended on his administration.

Read the indictment

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Follow Jason and Rachel on Twitter: @jrosenbaum; @rlippmann

St. Louis Public Radio's Chad Davis contributed reporting for this story.

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