Stenger’s office served with a federal subpoena; says he’ll cooperate

Former+County+Executive+Steve+Stenger%2C+left%2C+talks+to+then+council+Chairman+Sam+Page%2C+D-Creve+Coeur%2C+at+the+Aug.+1+council+meeting.+Page+became+county+executive+April+19%2C+after+Stenger+resigned+from+the+position+and+pled+guilty+to+federal+corruption+charges.+Photo+by+Jessica+Belle+Kramer.

Photo by Jessica Belle Kramer

Former County Executive Steve Stenger, left, talks to then council Chairman Sam Page, D-Creve Coeur, at the Aug. 1 council meeting. Page became county executive April 19, after Stenger resigned from the position and pled guilty to federal corruption charges. Photo by Jessica Belle Kramer.

By Gloria Lloyd, News Editor

By Gloria Lloyd
News Editor
glorialloyd@callnewspapers.com

A federal grand jury issued a subpoena to St. Louis County targeting St. Louis County Executive Steve Stenger and the relationship between his campaign donors and county contracts last week, and in an extraordinary move, the subpoena was publicly revealed by County Council Chairman Sam Page.

Pictured above: St. Louis County Executive Steve Stenger recites the Pledge of Allegiance prior to his swearing-in ceremony for county executive  Jan. 1. Stenger won re-election to the county executive seat in November. Photo by Erin Achenbach.

Page, D-Creve Coeur, revealed the existence of the three-page subpoena issued March 21 over the weekend after County Counselor Peter Krane allowed him to see it March 22.

In a statement, Stenger acknowledged the subpoena’s existence and said, “We intend to provide all the information requested and cooperate fully.”

Page called the subpoena “wide-ranging and broad” and said it asked for Stenger’s phone records, text messages, emails and other communications with people including current and former county employees concerning contracts from county departments and agencies.

A council member who had not seen the subpoena at the time the Call went to press, 3rd District Councilman Tim Fitch, R-Fenton — who is the former county police chief — said it’s typical to “cast a wide net” in subpoenas.

The subpoena named about seven staffers, Page said, but two names he specifically remembered cited were two of Stenger’s newest hires: Lance LeComb, the longtime communications director for MSD who began working for Stenger in October as a $130,000-a-year director of strategy, and Patti Hageman, who is married to Stenger’s longtime campaign spokesman Ed Rhode, who also serves as the spokesman for Better Together. She began working for Stenger in January. The subpoena also asked for all county contracts dating back to 2015.

“This validates the work we have been doing on the County Council,” Page said in a statement. “We have been asking questions about transparency and accountability for two years.”

Piling on to that sentiment was 6th District Councilman Ernie Trakas, R-Oakville, who has made it his job to oppose Stenger at every twist and turn for the last two years, especially over the Northwest Plaza lease, the county Port Authority and the Economic Development Partnership — all of which were mentioned in the subpoena.

The Ethics Committee and the council took a lot of heat from the administration over the course of the last year over the course of its investigation into the Port Authority, Northwest Plaza and the Partnership,” Trakas said. “This subpoena and the federal investigation in no small way validates the council and the committee’s concerns regarding transparency and accountability in the administration.”

Page said although Krane told him that the contents of the subpoena should be kept confidential, he consulted with the council’s outside attorney Elkin Kistner of Bick & Kistner, who said there was no requirement to keep subpoenas secret. So he went public for the sake of transparency.

The subpoena was issued by the U.S. attorney’s office for the Eastern District of Missouri. Page said it was signed by Hal Goldsmith, chief of the white collar unit at the office. Goldsmith said Monday he could not confirm or deny the existence of an investigation into Stenger.

But Goldsmith said that, speaking generally, federal prosecutors have to rely on grand juries to issue subpoenas since, absent an indictment or a trial, they don’t have that power themselves. Speaking generally about the grand jury process, he said that a standing grand jury typically meets for a year and looks at an array of issues. In some instances, prosecutors could convene a special grand jury to examine one case, he said.

He also said that every federal subpoena has a “return date” by when targets have to provide the information.

Federal prosecutors also asked for the council’s audio recordings and minutes since 2015, when Stenger took office and the council approved one of the most disputed contracts, a lease for a new North County Government Center at the former Northwest Plaza, which is owned by Stenger’s largest campaign donors, Robert and David Glarner. Together, the brothers donated $365,000 to Stenger’s re-election campaign.

The subpoena also specifically asked for all communications to and from Stenger regarding a land deal in Wellston involving Stenger donor John Rallo, who landed several contracts from the St. Louis County Economic Development Partnership and was awarded the contract to buy land in Wellston after communications throughout the bidding process with then-Partnership CEO Sheila Sweeney, a Stenger ally who has since been forced out of her job by the Stenger-appointed Partnership board.

Stenger denied being under federal investigation during campaign

The Northwest Plaza lease became an issue in the Democratic primary election between Stenger and challenger Mark Mantovani last year. Mantovani said he expected Stenger to be indicted, but Stenger denied any wrongdoing and said the Northwest Plaza lease was a fantastic deal that brought business to the county.

In part, the campaign issue was spurred by the council’s Ethics Committee chaired by Trakas, who spearheaded an ethics investigation into Northwest Plaza and sent the council’s findings and thousands of documents to the state attorney general and the U.S. attorney’s office.

During the campaign, the Call asked Stenger if he was under investigation by state or federal authorities, or if he had been interviewed by any such authorities.

“No, no, no,” Stenger said in late July when asked whether he was under either state or federal investigation. “That was complete political theater. No one that I’m aware of, no one has been contacted by any of them (state or federal) thus far, and we don’t expect to be.”

Besides, Stenger added, if anyone is under investigation for the Northwest Plaza lease, it should be the council that approved it, and some of its members that also took donations from the Glarners. Page received a donation from the Glarners, as did 1st District Councilwoman Hazel Erby, D-University City, and former state auditor candidate David Wasinger, the husband of then-3rd District Councilwoman Colleen Wasinger, R-Huntleigh.

“The council is the entity that decided whether to move forward with Northwest Plaza or not, I just presented them the idea, and my administration presented them with that idea,” Stenger said. “And they were free to have as many hearings as they wanted to have, ask as many questions as they wanted to ask. They were free to accept contributions from the developers or not, and they did. And then at some point they voted 6-1.

“That’s on the council. The appropriate investigation would be on the council because they’re the ones who decided. That would have never passed if they hadn’t voted for it. At the time it was passed, Sam Page was saying it was a great value for St. Louis County, Hazel Erby was saying she fell in love with the place, and they both accepted contributions from the developers at some point, as did Colleen Wasinger’s husband.  They voted for it just like they voted for the Legacy Ice facility in Creve Coeur Park, just as they voted for the pension changes, they voted for all these things and wanted to take their vote back later once it became politically expedient for them.”

Fitch pointed out that Stenger signed the contract, even if the council approved it. But since Stenger is a lawyer, Fitch said he wasn’t surprised about the emphasis on a technicality.

Trakas called Stenger’s contention “spin,” and said the Northwest Plaza lease was the “longest and most onerous lease ever entered in county history.”

A dispute between Stenger and Trakas over the voluminous records associated with Northwest Plaza indicates how extensive the documents involved in the subpoena could be.

At the time, Trakas complained that the administration didn’t give his ethics panel the documents it requested. Stenger said, “Frankly, he’s lying. They had 13,000 pages of documents… We gave him everything.”

How an investigation would be conducted

Fitch and Trakas both said they believed the investigation was probably ongoing since last summer, but typically, U.S. attorneys do not want to interfere with elections. Trakas said federal prosecutors are not cavalier in prosecutions, and they might have intentionally avoided directly contacting anyone last summer to stay out of election-year politics. But he believes prosecutors “are now prepared to be public about it. This is just the first overt act. You cannot rule out other subpoenas,” including subpoenas for witnesses to testify before a grand jury.

Fitch said that federal prosecutors in individual cities typically have to run investigations by someone at the U.S. Department of Justice before starting an inquiry, especially when investigations involve an elected official. At this point, it would be “very typical” for prosecutors to have already conducted interviews and talked to witnesses to try to get them to turn state’s evidence, Fitch said.

Investigations can stretch on, Fitch noted — as seen in the two issues he referred to federal authorities during the administration of former County Executive Charlie Dooley, the contract for the county crime lab and the embezzlement from the county Department of Public Health. Neither of those resulted in any indictments after more than a year.

“I’ve been through it twice, and I will tell you that just because the feds are investigating doesn’t mean there will be any criminal charges,” Fitch said. “But it will be a lengthy process.”

Council members react to federal investigation

Neither Fitch nor Trakas said they were surprised that Stenger is under federal investigation.

Fitch said any time that a politician mixes government deals with donations, it creates the appearance of a conflict. It’s why he didn’t accept any campaign donations when he ran for office last year to succeed Wasinger.

“I’m not surprised about it at all,” Fitch said. “I talked about it during my campaign, and I was so concerned about it during my campaign that I would not take contributions from anyone. I didn’t want even the appearance when you take money from people and organizations, and then you turn around and do something that helps them. I’m not suggesting he did anything illegal, I’m just suggesting that the optics of it is bad.”

Trakas said he felt the investigation would extend to other arms of government and possibly totally separate government entities. Asked why the investigation might target LeComb, who wasn’t working for Stenger when the Northwest Plaza lease was approved, he implied that current county employees’ former employers might also be targets.

LeComb’s successor as the Metropolitan St. Louis Sewer District communications director, Sean Hadley, said the sewer district had not received a subpoena related to LeComb.

The Economic Development Partnership and St. Louis County Port Authority could be next, Trakas said.

“This whole thing has always been about transparency and accountability, there’s no conclusions reached here, this is an investigation,” Trakas said. “I think the public needs to know what’s going on in county government. I’ve thought that since taking office.”

As for what he hopes comes from the investigation, Trakas said, “The truth. Whatever that is.”