Justice Department

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.

 

 

 

 

Spy vs. Spy?

In 2015, the Russian news service landed in North County to cover the troubles at West Lake Landfill and Coldwater Creek. The question now is whether the CIA mounted a counter-intelligence operation here.

KWMU reporter Vérinique La Capra aims a microphone at  Mary Oscko as cameras captured the moment in August  2015 at the Hazelwood Community Center.

It’s hard to imagine a more unlikely place for an espionage operation to take place than the Hazelwood Civic Center. But recent revelations by the U.S. intelligence community suggest that it may have been one of the locations in North St. Louis County where a secretive propaganda battle quietly played out in August 2015.

Hundreds of people gathered at the civic center for a community meeting that month had no inkling they were bit actors in this Cold War revival. The overflow crowd that jammed the conference room on August 20 attended  out of concern for the health of their families and the safety of the community. Radioactive contamination leftover from the Manhattan Project and its aftermath still plagued the St. Louis suburbs and residents wanted answers from government officials about the long-delayed clean ups.

Questions were asked, testimonials were given and frustrations were vented at the event, all captured on video by camerapersons, including at least one with ties to RT America, the Russian foreign news service.

In the heat of the moment, those present were not aware that they were pawns in a larger political struggle between the U.S. and Russia. Evidence of the covert chess game didn’t surface until January of this year, long after the meeting had faded in the community’s collective memory.

That’s when the CIA took the unprecedented step of releasing a classified report on alleged Russian interference in American politics. The unusual act by the agency was spurred by the continuing controversy over Russian interference in the 2016 presidential election. Those allegations remain the focus of  congressional investigations, and a probe by an independent counsel appointed by the Justice Department.

Allegations of the hacking of email accounts of Democratic presidential candidate Hilary Clinton and her campaign staff by Russian operatives prompted the CIA’s release of the report. But the majority of the declassified information in the report is unrelated to the furor over whether Donald Trump and his cronies benefited from the alleged Russian intrusion.

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RT honcho Margarita Simonyan briefs Russian Prime Minister Vladimir Putin in October 2012 in Moscow. (photo courtesy of the CIA’s declassified report)

Instead, the CIA released an intelligence assessment put together in 2012  that details how RT America is allegedly used by the Kremlin as a propaganda tool to cast the U.S.  government in a bad light.

The obvious question this now raises is whether the CIA mounted a domestic counter espionage campaign to offset the perceived damage being inflicted by the negative image that the Russian news service allegedly broadcast not only in America but to a global audience via the Internet.

The CIA report was compiled in 2012 three years before the Russians showed up in North St. Louis County and four years before the U.S. presidential campaign. Though classified, it can be assumed that its contents were shared with the White House and other federal departments and agencies.

It is therefore reasonable to surmise that the CIA and other government agencies were not simply monitoring Russia’s interference in America — but actively combatting it with their own surreptitious operations.

If this is true, it begs the question as to whether American intelligence assets were present at the Hazelwood Civic Center that sultry, late summer evening back in 2015.

Only The Shadow knows.

Correction: Originally, this story identified the meeting as taking place at the Machinist Union Hall in Bridgeton. Instead, the meeting took place at the Hazelwood Community Center. 

 

LETTER TO THE LAW

Rep. Jim Talent asks the Justice Department to come clean on its investigation of the EPA’s Times Beach cleanup

BY C.D. STELZER

first published in the Riverfront Times (St. Louis), Oct. 29, 1997

The U.S. Justice Department has quietly initiated a criminal inquiry into the controversial 1995 stack emissions test of the Times Beach dioxin incinerator, The Riverfront Times has learned. In a letter dated Sept. 22, 1997, U.S. Rep. Jim Talent (R-2nd Dist.) asked U.S. attorney Edward Dowd about the status of the federal investigation.

An anonymous source provided a copy of the letter to the RFT last week. Spokespersons for the congressman and the U.S. Justice Department in St. Louis declined to comment on the matter. A representative at the regional office of the Environmental Protection Agency (EPA) in Kansas City said the agency was unaware of any probe. Talent represents the congressional district in west St. Louis County, which includes the site of the now-completed EPA Superfund project.

His written request to Dowd reads in part: “The purpose of this letter is to inquire about the status of the Justice Department investigation regarding the possibility of criminal behavior surrounding the dioxin stack test for the permitting of the Times Beach incinerator. I would like to confirm if the investigation started by your office is still underway or if it has concluded.”

Last year, the RFT reported that separate Missouri Department of Natural Resources and EPA reviews of stack test data had discovered serious lapses in scientific protocol — lapses that cast doubt on whether the incinerator could have been legally considered protective of human health (Why the Times Beach Incinerator Should be Shut Down, Nov. 20, 1996). Talent asked the EPA last October to shut down the incinerator pending a re-test. His request followed another RFT story that revealed International Technologies (IT), the incinerator operator, partially owned Quanterra Environmental Services, the laboratory that handled the stack test emissions samples (Twice Burned, RFT, Aug 28, 1996).

The close relationship between IT and Quanterra presented the obvious appearance of a conflict of interest. Moreover, documents obtained by the RFT showed numerous errors and omissions in the stack test data. In one instance, it took seven to eight days for test samples to reach Triangle Laboratories in North Carolina, according to the EPA. In another unexplained anomaly, five test sample containers disappeared. Members of the Times Beach Action Group (TBAG), an organization that opposed the incinerator, sifted through mounds of technical data to uncover the inconsistencies in the stack emissions test.

When contacted last week, Steve Taylor, a TBAG organizer, was hesitant to talk about Talent’s letter to Dowd. Asked whether he was the source who leaked the letter to the RFT, Taylor says: I’ve been instructed not to comment about any FBI or Justice Department investigation. So I can neither confirm nor deny. … I have been told that if the media got hold of it, the investigation would end. I know that an investigation has been going on since January.”

Given the EPA’s questionable past practices, Taylor is disturbed that the agency is being allowed to proceed with the clean up of another recently discovered dioxin site on Lemar Drive in Ellisville with no public input into the process. The announcement of the toxic discovery in St. Louis County came shortly after the Times Beach project had been completed.

“The people on Lemar are getting pushed around,” says Taylor. “It’s just amazing that the EPA is allowed to move soil with all the inconsistencies and deceptions with the incineration.”