Sheila Sweeney, John Rallo also charged in Stenger corruption scandal

Pictured above: St. Louis Economic Development Partnership CEO Sheila Sweeney speaks at the June 16, 2015 ribbon-cutting ceremony of The Pavilion at Lemay, the recreation center and aquatic center that opened in Lemay with casino money.

By Gloria Lloyd
News Editor
glorialloyd@callnewspapers.com

Former County Executive Steve Stenger is not the only former county official that will plead guilty in a corruption scandal that has enveloped St. Louis County government.

Federal prosecutors say that former St. Louis Economic Development Partnership CEO Sheila Sweeney, who was forced out by the partnership’s board in January, will plead guilty at 3:30 p.m. Friday in the same courtroom where Stenger did a week earlier, in the courtroom of U.S. District Judge Catherine D. Perry.

Pictured above, from left to right: Sheila Sweeney, County Executive Steve Stenger and city of St. Louis Mayor Lyda Krewson. Stenger posted this photo on his 2018 campaign website, at the same time federal investigators were looking into his relationship with Sweeney and whether he directed her to give county contracts to his campaign donors.

Indictments against Sweeney and businessman John Rallo will be unsealed Friday morning, a spokeswoman for the U.S. Attorney’s Office of the Eastern District of Missouri said.

Rallo will also appear at noon before U.S. Magistrate Judge David D. Noce for an initial appearance and arraignment in “United States v. John Rallo,” prosecutors said.

Prosecutors did not say whether Rallo will ultimately plead guilty, or what he is charged with.

Stenger, a Democrat, pleaded guilty last week in a plea deal with a recommended sentence of three to four years for a sweeping corruption scheme that permeated county government, as he commanded department heads and the head of the city-county joint economic development agency to steer county contracts to his campaign donors so that he could stay in power.

The county executive, 47, resigned minutes after an indictment a federal grand jury handed down April 25 was unsealed Monday morning, April 29. He pleaded not guilty at his arraignment later that day, while agreeing to voluntarily give up his law license.

But he pleaded guilty in “United States of America v. Steven V. Stenger” Friday morning, May 3, acknowledging that everything federal prosecutors alleged in the 44-page indictment was true. (Read his plea deal.)

Former St. Louis County Executive Steve Stenger exits the Thomas F. Eagleton U.S. Courthouse in downtown St. Louis Friday after pleading guilty to three charges of theft of honest services/bribery and mail fraud. Stenger initially pleaded not guilty to the charges at an arraignment Monday, April 29, after an April 25 indictment was unsealed that morning, prompting Stenger to resign as county executive minutes later. Photo by Erin Achenbach.

Assistant U.S. Attorney Hal Goldsmith said that the yearlong investigation was kept undercover to not interfere with either of Stenger’s elections last year. Rallo and Sweeney both appeared to cooperate in the investigation against Stenger, with conversations and text messages with them appearing in the indictment.

Prosecutors accuse Stenger of five schemes violating the public trust, all centering around Sweeney and her roles as CEO of the Economic Development Partnership, executive director of the Port Authority and board member of the Land Clearance Redevelopment Authority. Four of the schemes revolve around businessman John Rallo, who over four years repeatedly pestered Stenger to give him county contracts in exchange for Rallo’s $10,000 a year in campaign donations. Overall, Stenger amassed more than $4 million in his campaign account for county executive for last year’s races against Democrat Mark Mantovani, then Republican Paul Berry III.

The indictment chronicles events starting in October 2014, when Stenger was running for county executive, to November 2018, when he went on a profanity-laced tirade against the CEO of the St. Louis Economic Development Partnership, Sheila Sweeney, for refusing to go along with his demands to give a law firm a state lobbying contract. At first, events are described generally, then through text messages, and finally, conversations last year are quoted verbatim in conversations captured at his office and house.

Stenger first met Rallo at a dinner at Sam’s Steakhouse in Affton Oct. 23, 2014, when Stenger was just weeks away from defeating Rick Stream in the 2014 general election for county executive. They were introduced by one of Rallo’s closest friends, a mutual friend the indictment only identifies as “S.W.,” but which the Post-Dispatch identified as Sorkis Webbe Jr., who had himself gone to prison in the 1980s for a cable-television franchise scheme.

At the meeting, Rallo paid for Stenger’s dinner, gave him a $5,000 campaign donation and complained that in the past, he had repeatedly given campaign donations and yet couldn’t get anything from politicians in return. Stenger promised Rallo that he would help land him county contracts if Stenger was elected county executive.

“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.

For the first several years of his time as county executive, Stenger pursued switching a county insurance benefits contract to Rallo’s company Cardinal Insurance, a scheme that apparently never went through due to intervention from then-Administration Director Pamela Reitz.

That didn’t go over well with Stenger, who told Wagener July 24, 2016, that Reitz was “either tired or just not our friend. Either way I really want her gone ASAP…. I am absolutely done with her. As soon as a replacement can be found I want her gone.”

With the insurance contract on the backburner, Stenger turned to other ways to enrich Rallo that actually succeeded. First, he got Sweeney, who also served as executive director of the St. Louis County Port Authority, to push a $100,000 marketing contract through the Port Authority board for Rallo and his friend Montel Williams, allegedly to help rehab the county’s reputation post-Ferguson. But Rallo didn’t have any marketing experience, and no work was done on that contract other than an op-ed from Williams that even misspelled Stenger’s last name.

County Executive Steve Stenger posted this photo of himself and U.S. Rep. Lacy Clay to Twitter last year.

Sweeney increased that contract to $130,000 without board approval so that she could launder money through Rallo to pay $30,000 to “J.C.,” a political operative friend of a politician unnamed in the indictment who had come through for Stenger with a key endorsement in the 2014 election. The description of the politician matches U.S. Rep. William “Lacy” Clay, who represents the city of St. Louis and North County, and the Post-Dispatch identified “J.C.” as John Cross, a Clay associate. This particular scheme is where federal prosecutors allege mail fraud, since Rallo mailed three checks to Cross.

Rallo also wanted to buy two parcels of county-owned land in Wellston for business ventures. Stenger directed Sweeney to help Rallo buy the land through the Land Clearance Redevelopment Authority, which Sweeney was on the board of. Sweeney put the sites out to bid, proofed the bids ahead of time for Rallo and his partner, Corey Christanell, and told them how much to bid based on whether anyone else was bidding. The county had spent several million dollars clearing, grading and preparing the  properties. Rallo and his partner bought the sites for $256,000 and $275,000.

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—.”

With federal agents again apparently listening in, Stenger outlined his philosophy on governance to his top staffers in November 2018, while discussing whether they could pressure Sweeney into approving the law firm, identified only as “Company One” in the indictment, that had previously held SLEDP’s state lobbying contract again instead of a competing bid from “Company Two.”

“I am a political person, I have to be, I’m in politics. That’s what we do. It’s not the art of f—ing over your friends,” Stenger said.

He later added, “It’s the art of staying in power. It’s about your agenda, and your administration, and (Company Two’s) not in my administration. Never got there. They’re an ancillary player. And (Company One) knows our issues, can get s— done.”

In the same conversation, he calls Sweeney a “nightmare b—-” and said “if she’s going the wrong thing on this, I’m firing her before she makes the decision. Seriously, we can’t have that.”

If she chose Company Two, the board would reverse her because “we’ve got too many people on the board.”

He added of Sweeney, “I’m about this close to just pulling the trigger and saying get the f— out of here” and “(Sweeney’s) a political creature, she was appointed by a politician, and by people who were appointed by politicians to take this role. She took the role. Now you’re in it. You’re either going to do it or you’re not. Get the f— out. You’re a political person.”