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 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.

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.