Businessman in Stenger case sentenced to 17 months in prison


Photo by Erin Achenbach

John Rallo exits the Thomas F. Eagleton Federal Courthouse Thursday, March 5 after being sentenced to 17 months in prison for his role in a federal corruption case involving former St. Louis County Executive Steve Stenger.

By Gloria Lloyd, News Editor

The businessman who urged former County Executive Steve Stenger to give him lucrative county contracts in exchange for campaign donations was sentenced to 17 months in prison Thursday — lower than federal guidelines.

John Rallo, 54, now of Utah and formerly of St. Louis County, is the final person — so far — to be sentenced in the pay-to-play corruption scheme surrounding Stenger and Rallo’s phony St. Louis County contracts, a scheme that sent the former county executive to prison for a four-year sentence.

Under the sentence imposed by U.S. District Judge Richard E. Webber in St. Louis, Rallo will spend 17 months in prison and two years under supervised release, the federal equivalent of probation. He paid a small court fee but will not have to pay $130,000 in restitution for the fake contract he received from St. Louis County, since Stenger already paid that restitution. Federal sentencing guidelines called for 21 to 27 months.

Rallo pleaded guilty to three counts of honest services/bribery, all felonies. Webber sentenced him to 17 months on each charge, to be served concurrently. Each charge could have carried a sentence up to 20 years in prison and a $250,000 fine.

“This defendant was the quid, and Stenger was the quo,” U.S. Attorney Hal Goldsmith said in court.

Federal authorities had no comment outside the courthouse because they say the case is ongoing. Rallo also had no comment.

Rallo’s family members attended his sentencing hearing at the Thomas F. Eagleton Federal Courthouse in downtown St. Louis, and the businessman’s arguments for avoiding prison time mostly revolved around them.

Rallo’s attorney John Rogers asked for probation or home confinement instead of the years in prison requested by federal attorneys because he said Rallo has suffered enough, is supporting his family and raising two young children and needs specialized treatment for thyroid cancer, which is currently in remission.

The pleas for leniency came despite Goldsmith’s argument in court that Rallo was the person most culpable in the scheme besides Stenger, planting the seed for multiple schemes with Stenger at Sam’s Steakhouse in South County in October 2014 and giving Stenger roughly $10,000 in campaign donations in exchange for a fake $130,000 Port Authority marketing contract.

Rallo also bought money from the county in two land deals where the bids were tipped in his favor by then-St. Louis Economic Partnership CEO Sheila Sweeney, who received probation for her role in the case.

Stenger’s Chief of Staff Bill Miller, who wasn’t around during the heydey of the Rallo schemes, was sentenced to 15 months in prison last year and is serving his time in Kentucky. Stenger is serving his sentence in Yankton, South Dakota.

The 37-page indictment handed down by a federal grand jury for Rallo is nearly identical to the 44-page one for Stenger.  

The indictment charging John Rallo alleges that beginning in October 2014 and continuing through Dec. 31, 2017, Stenger “schemed 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 Sweeney, through bribery and the concealment of material information,” according to a news release from the U.S. Attorney’s Office for the Eastern District of Missouri.

“The purpose of the scheme was for Stenger to secretly use his official position to enrich himself through soliciting and accepting campaign contributions from Rallo and other individuals in exchange for favorable official action, and for Rallo and other individuals to enrich themselves and their companies by secretly obtaining favorable action for themselves and for their companies, through corrupt means,” the office added.

Specifically, the indictment alleges that Stenger, in exchange for campaign donations and several fundraising events, took official action to ensure that Rallo and his company, Cardinal Insurance, obtained insurance contracts through St. Louis County during 2015 and 2016. 

When that plan failed, the indictment alleges that Stenger took official action to ensure that Rallo and his company, Cardinal Creative Consulting, obtained a sham 2016 consulting contract through the St. Louis County Port Authority. 

Additionally, Stenger and Sweeney took official action to rig bids and ensure that Rallo and his company Wellston Holdings LLC bought two county properties in Wellston which were held by the Land Clearance for Redevelopment Authority of St. Louis County during 2016 and 2017. 

“It’s good to have friends;-),” Rallo texted to Stenger May 9, 2015, after meeting with one of Stenger’s staffers May 6 to talk about getting a contract.

It was a relationship of mutual admiration. On Jan. 18, 2017, Stenger texted Rallo, “U r a beautiful man” after Rallo said he had recruited his business partner as a Stenger donor.

Rallo’s indictment alleges that Rallo, Stenger and Sweeney took steps to hide, conceal and cover up the illegal bribery scheme, including making false public statements.  

After Post-Dispatch reporter Jacob Barker submitted Sunshine Law requests last year for information on the Wellston land deal, Stenger was caught on audio — possibly Rallo wearing a wire — saying, “You can’t 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. And I’m telling you, you’re gonna f—ing kill yourself, all right, you’re gonna kill yourself with this s—.”