Month: May 2019

Rip Off

Judges in Paradise: Headquarters of Global Security Service near Festus, which is also the residence of the owner of the business — Judge Ed Page, and his wife, Judge Lisa Pagano Page.

Global Security Service — a company founded by convicted murderer William N. Pagano — overcharged the St. Louis Parks Department $285,000 over a period of years, but when the jig was finally up, the feds refused to prosecute. Instead, they claimed the politically-connected firm had been duped. 

The swindle continued undetected for several years, with the co-conspirators funneling misappropriated funds in monthly installments to a dummy corporation located in a South St. Louis County strip mall. Gradually, the pilfering added up to hundreds of thousands of dollars. The majority of the graft involved a city contractor with a checkered history — Global Security Service. But a federal probe concluded that the firm itself was an unwitting victim in the scam.

The St. Louis Post-Dispatch, Dec. 6, 2013.

Two  St. Louis Parks Department officials pleaded guilty to the crime in 2013 and received light prison sentences. In addition to Global Security, two other city contractors avoided prosecution. 

Appearing before Judge Carol E. Jackson at the sentencing of one of the defendants, Assistant U.S. Attorney Hal Goldsmith absolved Global Security and the other vendors of complicity in the scheme, saying “we believe they were duped.” The embezzlement by the high-ranking city employees netted a total of nearly $500,000 from the St. Louis Parks Department. $285,000 of that amount was due to the creative accounting methods of Global Security.

Global Security is owned by Jefferson County Associate Circuit Court Judge Edward L. Page, who took control of the business in 1992, after his father-in-law. William N. Pagano, was charged with murder. Page is married to Pagano’s daughter, Lisa Pagano Page. William Pagano founded Global Security in 1987, while serving as the Festus, Mo. police chief. In 1991, Pagano was charged with homicide in the shooting death of  Mark Todd, a top lieutenant in Pagano’s private security guard service. Pagano was convicted of the crime, but never served time because he committed suicide in 1994, after his appeals efforts had been exhausted.

Jefferson County Associate Circuit Court Judge Ed Page, the late William Pagano’s son-in-law and current president of Global Security Service.

Pagano’s tragic death did not thwart the growth of the company he founded, however. Under his son-in-law’s ownership, Global Security thrived, and mushroomed into one of the largest private security services in the Midwest. Between 2009 and 2013, the company raked in more than $2 million from its city contract alone, providing guard services to the train station, bus depot, Soldiers Memorial and other city-owned sites.

The deal with the city started going sideways when Global Security became involved in the scheme hatched by Deputy Parks Commissioner Joseph Vacca and chief park ranger Thomas “Dan” Stritzel to embezzle city funds under the guise of acquiring additional equipment not provided for in the city budget, according to the federal indictments. The ruse continued for years, with Global Security overcharging the city and funneling the excess money to Dynamic Management Group, a dummy corporation set up by David Michael Goetz, a friend and business associate of Stritzel. But Goldsmith, the federal prosecutor, argued in 2013 that Global Security was an unwitting participant, and, therefore, not complicit.

Then-St. Louis Parks Department Commissioner Gary Bess admitted no foreknowledge of wrongdoing and apologized for the actions of his subordinates. A  little more than a year late, in January 2015, he retired from his long-held city position, and was immediately appointed director of the St. Louis County Parks Department by newly elected St. Louis County Executive Stenger.  Bess resigned his county post last month in the wake of the ouster of Stenger, who pleaded guilty to unrelated federal corruption charges.

Page was recently elected on the Republican ticket as an Associate Circuit Court Judge in Jefferson County. Jefferson County unlike the city of St. Louis and St. Louis County is not bound by the non-partisan court plan. Page’s  wife is a jurist of higher standing. Lisa Page, the daughter of the late William N. Pagano, was appointed to the Missouri Court of Appeals by then-Gov. Jay Nixon, a Democrat, in December 2015.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Mafia and Rex Sinquefield

In his bid to privatize the St. Louis airport, billionaire Rex Sinquefield jumped in bed with a consultant with mob ties, according to the feds.

Jeff Aboussie, a consultant connected to billionaire Rex Sinquefield’s scheme to privatize Lambert International Airport, has Mafia ties dating back to the 1980s, STLReporter has learned.

Aboussie’s Mafia connections are referenced in background information included in a 1988 federal appeals court ruling on a case involving convicted racketeer Sorkis Webbe Jr., a criminal associate of Aboussie’s.

Nov. 25, 1983 St. Louis Post-Dispatch

The  information is contained in an Eighth Circuit Court of Appeals ruling and is based on an FBI wiretap that captured conversations in which Aboussie discussed efforts to track down a rival gang member during a protracted turf war between competing factions of the St. Louis underworld in the early 1980s. The background in the appeals court decision names Aboussie as being associated with a Kansas City, Missouri organized crime family. The appeals court ruling goes on to say that Aboussie provided support to one of side of the gang war by “contacting the Denver and Chicago crime families.”

Aboussie, who now resides in the affluent suburban town of Wildwood, is the former head of the St. Louis Building and Constructions Trades Council. Prior to heading the council, he was affiliated with Operating Engineers Union Local 513. Aboussie resigned from the St. Louis Airport Commission in 2016 to form Regional Strategies, a consulting firm connected to Grow Missouri,  the non-profit corporation formed by Sinquefield to push the billionaire’s plan to privatize the city-owned airport. Aboussie was appointed to the commission by former St. Louis County Executive Steve Stenger in 2015. Stenger resigned last month and pleaded guilty to federal corruption charges. 

 Webbe — Aboussie’s past partner in crime —  played a pivotal role in the federal sting that ultimately brought down Stenger, introducing the politician to shady businessman John Rallo and also attending a meeting with Stenger and St. Louis Economic Development Partnership CEO Sheila Sweeney. Stenger and Sweeney pleaded guilty earlier this month for their roles in the pay-to-play scheme. Rallo pleaded not guilty to the same charges. Webbe was not charged. 

In 1983, Webbe and Aboussie were implicated by the feds in a conspiracy to harbor a fugitive wanted for participating in a series of gangland car-bombings here. The feds indicted Aboussie for lying to a federal grand jury about the plot. 

Aboussie later pleaded guilty to insurance fraud in a separate federal criminal case and received a six month sentence and five years probation. As a part of the same 1985 plea deal, the feds dropped the perjury charges. The full terms of the plea deal remain unknown.

In the current investigation, the U.S. attorney’s office here subpoenaed the personnel records of Lou Aboussie, Jeff Aboussie’s first cousin. Lou Aboussie was hired by Stenger in 2015 at an annual salary of more than $75,000. At the time of his resignation earlier this year, he was listed as working for the County Parks Department, then-headed by Gary Bess, another Stenger appointee who also quit in the shakeup of County government that took place in the wake of the federal indictments of Stenger and his accomplices. Lou Aboussie was formerly an aide to U.S . Rep. Lacy Clay.

 

 

Meet The New Boss

The recent coup in county government installed an old crop of political insiders to oversee the public use of casino cash. Has anything really changed? 

Penn National Gaming’s River City Casino in South St. Louis County.

The last six months have been tumultuous for St. Louis County government, culminating in the recent resignation of County Executive Steve Stenger and his pleading guilty to federal corruption charges.

His partners in crime included St. Louis Economic Development Partnership CEO Sheila Sweeney and businessman John Rallo. Sweeney also directed the St. Louis County Port Authority before she resigned in January. The scheme in which the three participated involved funneling rent payments from the River City Casino to the County Port Authority. The money was then passed on to the Development Partnership, where some of it ended up being used to award contracts to Rallo in exchange for his campaign contributions.

The complicated conspiracy was exposed by enterprising reporters at the St. Louis Post-Dispatch, who doggedly pursued various parts of the scam for more than a year. After the feds indicted Stenger and the two others, the U.S. Attorney’s Office took over the narrative. As stories go, this one is beginning to play out. The official version of events has been crafted in the federal indictments. Soon the newspaper coverage will dwindle and stop, subsumed by other news — leaving things to return to normal.

Shakeups such as this provide rare opportunities to glimpse under the proverbial rock to see the creepy, crawly machinations of local politics. But that chance never lasts too long.  In the aftermath of such scandals such as this, a mop-up crew is quickly dispatched to restore the status quo, place the listing ship of government once again on an even keel. The fact that the boat may have been off course to begin with is never questioned.

GI’s back in World War II invented an acronym to describe such circumstances — snafu — “situation normal all fucked up..” In this case, the 4th Estate has predictably lauded itself for exposing wrongdoing, while law enforcement and the judiciary have taken pride in meting out justice. Meanwhile, inside County government its business as usual, funny business.

The New Boss: Attorney John W. Maupin, chairman of the St. Louis County Port Authority.

Last November, in the lead up to Stenger’s ultimate downfall, the St. Louis County Council appointed members to its own St. Louis County Port Authority, which has now replaced the board appointed by Stenger. The interim director of the new and improved Port Authority is Denny Coleman, former director of the St. Louis County Economic Development Council, the precursor to the Development Partnership.  In his previous leadership capacity, Coleman was responsible for helping to score the deal that resulted in Penn National Gaming Inc. — the current owners of the River City Casino — paying an estimated $5 million in rent annually to the St. Louis County Port Authority.

Coleman will keep an eye on the casino cash with the the newly installed Port Authority board, which is now chaired by attorney John W. Maupin,  a Republican appointed to the position in November by then-District 2 Councilman Sam Page. Page, of course, is now the newly unelected County Executive who replaced Stenger.

St. Louis Post-Dispatch, June 16, 1995.

Maupin has led a distinguished career as an attorney, but his record as a public servant includes its share of controversy.

In 1995, then-State Auditor Margaret Kelly issued a scathing report that blamed the Missouri Ethics Commission — then chaired by Maupin — for failure to enforce campaign finance disclosure laws, hiding information from the public, and making an unauthorized payment, according to a story by Post-Dispatch reporter Terry Ganey. When confronted by Kelly’s findings, Maupin shirked responsibility and denied all wrongdoing by the commission and its staff.

That’s enough raise an eyebrow as to why Page and the County Council would appoint Maupin to the Port Authority in the wake of the latest flap.

But that’s not all. In 1997, with Maupin still at the helm of the Ethics Commission, the Post-Dispatch reported on a lawsuit filed by attorney Ronald Jenkins, who the commission had appointed as a special prosecutor in 1994 to probe campaign finance violations by then-St. Louis City Comptroller Virvus Jones. Jenkins had sued the commission to be reimbursed for his legal services, but the Missouri Court of Appeals ruled against him, which seems straight forward enough.

Another story in the same edition of the newspaper, however, raises questions as to why Maupin and the Missouri Ethics Commission appointed Jenkins as special prosecutor in the first place. Because by then, Jenkins, the special prosecutor, was acting as the criminal defense attorney for Amiel Cueto, the attorney and business partner of Eastside racketeer Thomas Venezia. Cueto and Venezia would both be convicted on federal racketeering charges.

Jenkins is a partner in the law firm of Jenkins & Kling along with Stephen Kling Jr. and his spouse Rebecca Kling. Stephen Kling Jr. is the son of the late S. Lee Kling. S. Lee Kling was the founder of Landmark Bancshares in St. Louis and a Democratic power broker. He died in 2008. S. Lee Kling was President Jimmy Carter’s  national campaign finance chief and a campaign financial advisor to U.S. Rep Dick Gephardt for years.

There’s always trouble in River City, but only a small bit of it ever sees the light of day.

 

 

 

 

 

 

The One That Got Away

The One that Got Away

A federal sting snares the mayor of St. Gabriel, Louisiana in a trashy scam and  links him to a St. Louis con artist who remains on the lam.  

by Will Delaney

first published in the Journal of Decompostion in 2012

As it meanders toward the Gulf of Mexico, the Mississippi River slows and bunches together as if trying to delay the inevitable. The lingering creates a closer bond with the land. St. Gabriel, Louisiana, a sleepy Delta town of 6,600, hugs one of the river’s many serpentine bends south of Baton Rouge. The burg is located in Iberville Parish, the heart of Cajun country, but two thirds of its population is African American. And nearly one quarter of the inhabitants live below the poverty level. The town is noted for being the location of two state prisons, which house more than 2,700 inmates. The other major employer in the area is the petrol-chemical industry. With the exception of Slay Transportation, which has a truck terminal in St. Gabriel, there are few ties to St. Louis, a Midwestern city more than 600 miles to the north.

But that was before Igor Grushewsky came to town.

Former St. Gabriel Mayor George Grace (right) leaving federal court in Baton Rouge.

Grushewsky, who is wanted by the feds in St. Louis, showed up in St. Gabriel back in 2004, pitching a plan to build a basalt pipe plant that would help bring prosperity to the impoverished community. The chain-smoking Russian immigrant from St. Louis quickly gained the support of then-Mayor George Grace.

In March, Grace was convicted in an unrelated case on seven counts of racketeering in federal court in the Baton Rouge. The former mayor was found guilty of accepting more than $16,000 in kickbacks between 2008 and 2010 from Cifer 5000, a fictitious trash-can cleaning company set up by the FBI as part of Operation Blighted Official. In return for the payments, Grace worked to attract millions in public and private funding for the fake company.

During the trial, Grace and others also testified about an earlier scheme, this one hatched between the mayor and Grushewsky, who touted himself as the CEO of a corporation called Global Energy on North America, allegedly headquartered in St. Charles, Missouri.

According to court testimony, Grace signed a letter indicating the city of St. Gabriel’s intention to subsidize Global Energy’s plan to the tune of $1 million. The proposed project would have recouped expenses through nabbing state and federal economic development grants, but the idea never got beyond the drawing board. During the course of the aborted scam, however, Grushewsky managed to bilk the city out of as much as $20,000 in supposedly computer-related fees, which Grace then tried to cover up.

At the trial earlier this year in Baton Rouge, federal prosecutors said that Grushewsky has been under criminal indictment in St. Louis since 2007. Grushewsky is charged with mail and wire fraud for allegedly hustling people in several states out of more than $200,000 related to the bogus sales of Russian aircraft and diamonds, according to the Baton Rouge Advocate.

A YAK 18T

Kenneth Bracht of Washington state, one of the marks targeted by Grushewsky, filed a civil suit in federal court in St. Louis in 2005, after being taken in a scam involving the purported sale of a YAK 18T airplane. In 2000, Gruwshewsky incorporated Yakolev Centers of America, an aviation sales company, with the help of a St. Louis lawyer. The following year Bracht came to St. Louis to negotiate the deal, meeting with Grushewsky at a hangar at the Creve Coeur airport. Bracht agreed to purchase the plane for $80,000, and ultimately gave Grushewsky more than $58,000, while the aircraft was ostensibly being repaired. More than a year later, Grushewsky had failed to deliver the aircraft. Instead, he cut Bracht a check that bounced.

Grushewsky, who remains on the lam, is a licensed pilot and the owner of two YAK aircraft. One of the planes is registered with the FAA as being stored at Breese Airport in Clinton County, Illinois. The registration on the plane expired in March. The co-owner of the aircraft is listed as Richard Illyes of Maplewood, Missouri. Illyes is the former head of the Missouri Libertarian Party.

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The St. Louis Chainsaw Massacre

The St. Louis Chainsaw Massacre

When a tree falls in the city does anyone hear the cash register ring?

This story first appeared in the Journal of Decomposition in 2012.

By Bill Newmann

 

The hit jobs are carried out with military-like precision in broad daylight on city streets almost every day.  As a result, thousands of St. Louis’ oldest residents have disappeared over time, targeted for disposal without warning.  Moreover, the hatchet men in these coordinated attacks operate with immunity under a blanket law that provides authority to act with no public input.

The victims are mature hardwood trees that line city streets.  The perp is the Forestry Division of the St. Louis Parks Department. The city’s urban foresters adhere to a model shared nationally by the commercial timber industry, a world in which trees are planted, grown, and harvested in a perpetual cycle.  The strips of publicly-owned land between sidewalks and curbs are akin to a plantation, and the trees, an agricultural commodity.  Removing the mature tree canopy that shields the city is an unavoidable part of this municipal agribusiness.  Adding insult to injury, a private company profits from this taxpayer-subsidized scheme.

Street trees have become a cash crop.

In mid-2009, the Forestry Division, the local plantation overseer, put out a request for bids to privatize its composting operation.  Within two weeks of issuing the notice, St. Louis Composting, Inc. secured the contract.  St. Louis Composting, an Illinois corporation that sells a variety of compost and mulch products, was founded in 1992, the same year yard waste was banned from Missouri landfills.

Patrick T. Geraty, the owner of St. Louis Composting, began by subcontracting his services at then-Peerless Park Landfill in West St. Louis County.  Now the flagship location, it is one of five similar facilities operated by the company in the Bi-State area.  In the last twenty years, Geraty’s business has grown exponentially.  St. Louis Composting now claims to be the region’s largest composter, processing more than one-third of St. Louis County’s yard waste.  In 2009, it generated $12 million in revenue, according to the St. Louis Business Journal.

The city leases the private firm its Hall Street facility for a mere $12,000. The company reciprocates by forking over a tiny fraction of its output to the city — 5,000 cubic yards of mulch per year.  In the proposed budget for 2010, Forestry earmarks $250,000 for its outsourced composting operation. The city contract also sets a specific amount that St. Louis Composting receives for each cubic yard of municipal waste it accepts. Tabulating the total that is raked in is tricky. But there’s one accounting certainty to this murky arrangement: The city pay out is not the only way the corporation makes money.  In addition to charging the city, St. Louis Composting accepts material for a fee from private customers. Moreover, after processing the raw materials it is paid to accept, St. Louis Composting then charges up to $39 per cubic yard for its finished products.

Months before St. Louis Composting submitted its bid, the city issued a street tree study.  It was conducted by a private research firm, the Davey Resource Group, and was paid for by a hefty grant from the Missouri Department of Conservation.  Rooted in national urban forestry standards, the analysis focuses on cost-benefit comparisons and property values, not tree health.

The report concludes, “St. Louis has an aging tree population skewed towards mature trees.” Then in an understated manner, the study metes out its death sentence by decreeing that the culling of the city’s oldest hardwoods is an economic imperative: “An uneven age distribution, heavily weighted in younger trees, is an age structure that provides an even flow of benefits, even if major losses in canopy or species occur.”

The mass execution order, which is buried deep in the report, is masked by forestry jargon that trumpets “sustainability,” and other green buzzwords. The lethal ends are also camouflaged under the rubric of public safety, a catchall phrase used to justify the city lumberjacks’ deeds. In that regard, the Davey report recommends Forestry enforce an “aggressive risk-tree removal program.”

Sketchy guidelines such as these provide Forestry a cover under which it can condemn any tree.  Furthermore, due to the city’s fiscal problems, Forestry is under increasing pressure to perform to validate its annually allotted tree-maintenance budget of more than $2.2million.

The final nail in the coffin is a city ordinance enacted in 2010 that yields sole authority over all street trees to Forestry Commissioner Greg Hayes and his crew. Together they represent the judge and jury and there is no public appeals process. The law vests the Forestry boss with “police-power” to control the street-tree plantation. Violators who disobey the edict face stiff fines and imprisonment.

St. Louis Composting’s contract expires August 31.  According to the terms of the agreement, if it intends to request an extension, the company is required to provide written notice to St. Louis Comptroller Darlene Green by May 31.  A spokesman for the comptroller writes in an e-mail dated June 6, “I’ve been informed that nothing has been received as of yet.”

Mum’s the Word

Sheila Sweeney declined to comment when asked about the lobbying deal she signed with Kit Bond Strategies in 2016. 

As she exited the federal courthouse in St. Louis late Friday afternoon, Sheila Sweeney, 61, refused to comment on whether federal authorities have quizzed her about her role in steering a $240,000 lobbying contract to Kit Bond Strategies in early 2016.

Sheila Sweeney outside the federal courthouse in St. Louis with her attorney Justin Gelfand, Friday May 10, 2019.

Earlier, the former St. Louis Economic Development Partnership CEO pleaded guilty before federal Judge Catherine D. Perry to three-counts of defrauding the citizens of St. Louis County in the same pay-to-play scheme that snared former St. Louis County Executive Steve Stenger. Stenger pleaded guilty last week. Their partner in crime, John “Johnny Roller” Rallo, pleaded not guilty Friday morning. They were all charged with scheming to give contracts and property deals to Rallo in exchange for him contributing to Stenger’s campaign coffers.

The pay offs to Rallo were funneled by Sweeney through the St. Louis County Port Authority, which she also headed. The port authority received the funds from Penn National, the owner of River City Casino in South County. The casino pays the port authority about $5 million a year in rent, which is then passed on to the St. Louis Economic Development Partnership.

The money paid to Kit Bond Strategies appears to have originated from the same pool of cash. Sweeney signed the contract with Linda Bond, a principal partner in KBS with her husband, former U.S. Sen. Kit Bond. The St. Louis Economic Development Partnership paid KBS to lobby Congress to turn over the clean up of the radioactively-contaminated West Lake Landfill to the U.S. Army Corps of Engineers. The effort to convince Congress to take the overall authority for the clean up away from the EPA and hand it over to the Corps involved coordinating the support of the St. Louis congressional delegation. As part of that effort, Rep. Ann Wagner (R) and Rep. Lacy Clay (D) testified together before a House subcommittee. The effort by KSB also included the support of then-Sen Claire McCaskill (D) and Sen. Roy Blunt (R). Legislation authorizing the turnover to the Corps passed the Senate, but failed to clear the House subcommittee.

 

The lobbying deal was carried out with little to no public knowledge, which raises questions as to why the effort kept on the low down. When asked about the deal on Friday, Sweeney remained mum.

After refusing to comment, Sweeney strolled across Clark Avenue with her attorneys and shared a laugh. She awaits sentencing and has been released on her own recognizance.

Life is good.

 

 

VIP Treatment

Indicted racketeer John “Johnny Roller” Rallo  limited his public exposure Friday morning with the apparent aid of the feds.

John Rallo was quietly arraigned before federal magistrate Judge John M. Bodenhausen at 9:30 a.m. Friday without public notice. He pleaded not guilty.

The U.S. Attorney Attorney’s office had charged him a day earlier along with accomplice Sheila Sweeney on three counts of defrauding the public in a pay-to-play scheme.  Sweeney is the former CEO of the St. Louis Economic Development Partnership. She pleaded guilty in federal court Friday afternoon.  Former St. Louis County Executive Steve Stenger pleaded guilty to the same charges last week.

Rallo was treated to a de facto private hearing with the apparent tacit approval of federal authorities. After his indictment was issued yesterday, he was scheduled to be arraigned on Friday, but the arraignment was not listed on the docket schedule in advance.

When reached Friday morning, the docket clerk at the federal courthouse had no listing on the docket for Rallo’s arraignment, he said. Calls to the Assistant U.S. Attorney Hal Goldsmith, the prosecutor in the case, and John P. Rogers, Rallo’s, defense attorney, were not returned.

A spokesperson for the U.S. Attorney’s Office said the arraignment had been initially scheduled for noon Friday before federal magistrate Judge Noelle C. Collins, but had been bumped up to 9:30 a.m., and switched to the courtroom of magistrate John M. Bodenhausen.

Screen Shot 2019-05-10 at 12.42.05 PM

He’s Special!: John “Johnny Roller” Rallo gets VIP treatment from feds.

The FBI Turned a Blind Eye to Rallo Mob Ties for Decades

A long-buried FBI report raises questions as to why the FBI and U.S. Justice Department ignored damning allegations by a now-very dead informant. 

 

The FBI knew that the Rallo Construction Co. had alleged ties to the Chicago Mafia for decades. In indictments filed by the U.S. Attorney for the Eastern District of Missouri against St. Louis County Executive Steve Stenger on April 25, 2019, John “Johnny Roller” Rallo was named as a participant in a pay-to-play scheme. He is scheduled to be arraigned May 10. 

 

The FBI knew about an alleged connection between the Chicago Mafia and Rallo Construction Co. of St. Louis as early as 1991, according to a classified FBI report released under the Freedom of Information Act.

Jesse Stoneking, the unnamed informant cited by the FBI in the report, died of a gunshot wound to the head in Arizona in 2003. Arizona law enforcement authorities ruled his death a suicide. Stoneking had been a top lieutenant of East St. Louis racketeer Art Berne in the 1980s, when he was working undercover for the FBI.  After he testified against Berne and other St. Louis area organized crime figures in federal court, the Chicago Mafia allegedly put out a $100,000 contract on his life.

Case Closed: Crime scene photo of the interior of the 1995 Ford Crown Victoria occupied by Jesse Stoneking on Jan. 19, 2003. The St. Louis mobster and federal informant died from a gunshot wound to the head. Arizona authorities ruled it a suicide.

Last month, the U.S. Attorney’s Office in St. Louis  issued a three-count indictment against St. Louis County Executive Steve Stenger for his role in steering lucrative contracts and property deals in return for campaign contributions from John G. Rallo, a former shareholder in one of the family-owned construction companies — CMR Construction Inc. CMR was formed 1989 by Charles N. Rallo and Michael J. Rallo, grandsons of the of founder of C. Rallo Contracting Co., which was incorporated in 1947.

John G. Rallo, also known as “Johnny Roller” for his long hours spent at the crap tables in Las Vegas, and fellow accomplice Sheila Sweeney were charged one week after Stenger  pleaded guilty. He is awaiting sentencing before Judge Catherine D. Perry in August. Until January, Sweeney headed the St. Louis Economic Development Partnership, a county agency that was used to dole out the contracts to Rallo and other political contributors to Stenger’s campaign coffers.

In May 1991, Stoneking informed the FBI that “Berne had told him that the Rallo Construction Company … belonged to the Chicago La Costa Nostra. …” The report goes on to say that “Berne told [Stoneking] that if Chicago wanted to buy property, businesses, get loans or some other such financial transaction it would be done through Rallo Construction Company in St. Louis.”

Stenger was introduced to Rallo by federal felon Sorkis Webbe Jr. in 2014, according to the federal indictment. Webbe, a former city alderman, was convicted of voter fraud and obstruction of justice in 1985.  Webbe’s father had been convicted of income tax evasion in Nevada in 1983 related to his interests in the Aladdin Casino in Las Vegas, which was then controlled by the Detroit Mafia. The Detroit and St. Louis Mafia families are related.

Given this evidence and other indictors, it is unclear why federal prosecutors in St. Louis did not now pursue the Stenger case under the Racketeer Influenced and Corrupt Organizations Act (RICO), which was crafted specifically to address such criminal enterprises. 

Hal Goldsmith, the prosecutor in the Stenger case, previously served as an Assistant U.S. attorney in East St. Louis in the 1990s, which was Berne’s territory. Goldsmith’s boss at that time was then-U.S. Attorney Charles Grace, who initiated wide-ranging probes of organized criminal enterprises during his tenure. When Berne died in 1996, he was a paid “security consultant” for Pipefitter’s Local 562, which Stoneking had also fingered as being connected to the Chicago Outfit. James O’Mara, the manager of Local 562, was the chairman of the St. Louis County Council at this time.

 

 

 

 

“You’re Guilty!”

Former St. Louis County Executive Steve Stenger reverses his plea, admits guilt to three federal counts of corruption, refuses to make any public comment following his court appearance.

Defense attorney Scott Rosenblum (foreground) leaves the federal courthouse in St. Louis with his client, former St. Louis County Executive Steve Stenger, after Stenger pleaded guilty to 3-counts, including bribery.

It was a scene out of a bad Hollywood movie. A crowd of reporters and cameramen are loitering outside the federal courthouse in a Midwestern city. Slowly the camera zooms in on the leading man, who appears to have dieted on Crispy-Creme donuts for the last six months to fit the role of a  disheveled, dogged newspaperman.

St. Louis Post-Dispatch columnist Tony Messenger (playing himself) wears a rumpled sport coat, with his shirttail hanging outside his pants, notebook and pen in hand.

His prey is his antithesis:  Steve Stenger, the once-wily politician, snared in a federal sting operation, appears dazed, but, nevertheless, dapperly dressed in a crisp, dark business suit.

Messenger:  “Are you cooperating with federal investigation?”

Stenger:  The disgraced former St. Louis County Executive  pretends not to hear the perfunctory question.

Moments later, Stenger and his attorney Scott Rosenblum do an abbreviated perp walk through the pack of journalists before jumping into a black SUV with tinted windows that pulls up on cue and whisks them away. It was all over in a minute or two.

The only part of the action on Friday morning that seemed unscripted was the appearance of a deranged woman in red, who wandered into the middle of the scene, aimed her smart phone camera at Stenger and Rosenblum and began screaming admonishments. “You’re guilty!” she yelled. “And I voted for you!” As Rosenblum quickly slammed the door of the luxury vehicle in her face, she added: “And you defended him!”

Assuming the interloper is a registered voter in St. Louis County and she went to the polls in November, she is correct on all three declarations. Earlier, Stenger had pleaded guilty to bribery, mail fraud and theft of honest services related to contracts given in return for campaign contributions between 2014 and 2018. Stenger’s guilty plea reversed the one he made only a few days before. Judge Catherine D. Perry set his sentencing date for Aug. 9.

While waiting for the judge to enter the courtroom, Assistant U.S. Attorney Hal Goldsmith smiled and appeared to look over at defense counsel Rosenblum and wink. Perhaps the prosecutor suffers from a nervous facial tick, or the two attorneys may have just been sharing a moment of professional adoration. But the question remains: What kind of deal did Stenger strike with the feds in exchange for his guilty plea?

Two individuals named in the indictments  —  former St. Louis Economic Development Partnership CEO Sheila Sweeney and businessman John Rallo — are alleged to have participated in the same criminal activities, but were not charged.

As former St. Louis County Exec Steve Stenger exited the federal courthouse on May 3, he was confronted by the woman in red who shrieked, “You’re guilty, and I voted for you!” Senior freelance blogger C.D. Stelzer is next to her. Behind Stenger on the right is Pulitzer-winning-columnist and GQ model Tony Messenger of the St. Louis Post-Dispatch. (photo credit: KTVI/Chris Hayes)