St. Louis County Council

A Good Day for a Hanging

Former County Executive Steve Stenger pleads not guilty to bribery, mail fraud, and theft of honest services, as giddiness infects the press gallery and U.S. Marshals hand out steno pads.

All Smiles: Former St. Louis County Executive Steve Stenger (fourth from left) poses with other dignitaries on Dec. 13, 2018 at the NGA Land Transfer ceremony held at the St. Louis Public Library Central Branch. Immediately behind Stenger is Deputy Assistant Secretary of the Air Force Richard K. Hartley, a former CIA operative attached to the National Reconnaissance Office, 1997 to 2003.

Assistant U.S. Attorney Hal Goldsmith stayed on script Monday afternoon, responding tersely to questions posed by a gaggle of reporters during a news conference held on the sidewalk outside the Thomas Eagleton Federal Courthouse in downtown St. Louis.

“We are confident of our case,” Goldsmith said, referring to the three-count criminal indictment issued by the U.S. Justice Department against former St. Louis County Executive Steve Stenger. Following this vague answer, a veteran broadcast journalist turned aside and muttered to himself: “Great sound bite — six words.”

The dearth of prosecutorial verbosity and courthouse histrionics did not deter the assembled press, however, from relishing the proceedings in an amicable atmosphere akin to the camaraderie shared by farmers of bygone days who went to town to witness a hanging in the public square.

To commemorate the auspicious event, U.S. Marshals offered free notebooks and pens, but there were few takers. The journalists in attendance seemed satisfied to gloat rather than scribble. KMOV-TV hired a sketch artist for the occasion.

The only thing missing were picnic baskets.

After pleading not guilty to bribery, mail fraud and theft of honest services, Stenger was released on his own recognizance by Judge Noelle  C. Collins. Celebrated defense attorney Scott Rosenblum represented Stenger during the arraignment.

The second term Democrat resigned from public office Monday morning following the release of the indictments. He had won reelection in November but continued to be dogged by allegations of corruption involving favors granted to campaign contributors, including businessman John Rallo. The scandal, which played out in the pages of the St. Louis Post-Dispatch and before the St. Louis County Council over the course of the last year, centered on the actions of Stenger underling Shelia Sweeney, CEO of the St. Louis Economic Development Partnership.

Five Post-Dispatch reporters contributed to the story today. A pack of TV and radio reporters were also present.

One of the many questions not asked of Goldsmith at his sidewalk press conference was whether federal investigators are probing the contract between the St. Louis Economic Development Partnership and Kit Bond Strategies, the lobbying firm of former U.S. Sen. Kit Bond and his wife.

In January 2016,   Linda Bond, the former senator’s wife, signed a contract with St. Louis Economic Development Partnership CEO Sheila Sweeney. The Development Partnership is a joint government agency of the city of St. Louis and St. Louis County, which wields broad powers and operates largely in the shadows with the benefit of millions of dollars in annual payments from  casino interests raked in by the St. Louis County Port Authority, an agency that shares the same staff as the Development Partnership. The County Port Authority’s purpose has nothing to do with ports. Instead, it acts as a conduit for the casino payments.

In 2016 and 2017, the St. Louis Economic Development Partnership funneled $230,000 of public funds to Kit Bond Strategies, according to federal lobbying reports. Part of that total went to pay for the failed congressional effort to turn the West Lake Landfill Superfund Site over to the U.S. Army Corps of Engineers — an agency that expressed serious reservations about assuming the responsibility for taking control of the project in the first place. The exact amount spent specifically on the West Lake lobbying effort is uncertain. A request under the Missouri Sunshine Law for further details was denied last fall.  But this much is known:  the development agency’s contract called for KBS to be paid $10,000 a month for its services. The lobbying records show that the public money was doled out to the lobbyist in quarterly payments. The St. Louis Economic Development Partnership paid the lobbying firm an additional $60,000 in 2018 , but by then the effort to persuade Congress to turn the West Lake clean up over to the Corps had been dropped.

Note: Stenger pleaded guilty on May 3. 

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 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.