St. Louis Mafia

Banished

St. Louis Globe-Democrat reporters Al Delugach and Denny Walsh won the Pulitzer in 1969. Their reward: One-way tickets out of town. first published in the St. Louis Journalism Review, June 1, 2008

It’s been a while since the last St. Louis newspapermen garnered a Pulitzer Prize for reporting–39 years to be exact. St. Louis Globe-Democrat reporters Denny Walsh and Albert L. Delugach received the honor on May 5, 1969.

Al Delugach won the Pulitzer Prize for reporting in 1970.

Their award now hangs on the wall behind the reference desk at the Mercantile Library at the University of Missouri–St. Louis. Surrounded by unrelated bric-a-brac, journalism’s highest honor and its recipients are easily overlooked.

The St. Louis Media Halls of Fame are also located at the Mercantile, which acquired the Globe-Democrat files after the newspaper folded in 1986. But when the group’s third annual awards are presented at a gala dinner on June 7 at the Khorassan Ballroom of the Chase Park Plaza Hotel, Walsh and Delugach are not on the list — again.

Their former boss, the late G. Duncan Bauman, however, was among the first to receive the laurel three years ago. On its lower level, the Mercantile displays a permanent exhibit of his memorabilia, including his desk. As publisher of the Globe-Democrat, Bauman was most likely seated at that desk when he decided to kill Denny Walsh’s story that linked then-St. Louis Mayor A.J. Cervantes, Jr. to the St. Louis underworld.

And it’s also where he probably sat when he refused to allow Walsh and Delugach to report on stymied federal indictments of the steamfitters union, which they had investigated. They gave their story to the Wall Street Journal, a ploy that broke the indictments loose and resulted in their winning the Pulitzer Prize.

The reporters were an odd couple–Walsh looking like a boxer and Delugach like a shy botany professor. Bauman, who became their nemesis, had such an ego that he had himself named the city’s Man of The Year in what he thought would be the Globe-Democrat’s final Sunday magazine in 1984. It included 33 photos of him.

In 1995, Bauman told St. Louis Post-Dispatch columnist Jerry Berger that he halted publication of that story to save the integrity of the newspaper.

“I found he went to great lengths to link Mayor Cervantes to organized crime,” said Bauman. “I then made some personal phone calls to the sources that Walsh said he was using and found out Walsh was not reflecting the views of those sources accurately. So, I told Walsh we would not print that installment of the [series]…. Walsh became angry and quit.”

“He lied to Berger,” counters Walsh, who, at 72, is still a working reporter for the Sacramento Bee. “He couldn’t have talked to any of my sources. They weren’t in St. Louis, and they wouldn’t have talked to him. The sources were all federal. I believe he let his unsavory connections in the community guide his stewardship of the Globe,” Walsh adds. “I know that he told Cervantes that he had taken care of that series.”

After leaving the Globe-Democrat, Walsh joined the staff of Life Magazine, taking his spiked story and notes with him. His eight-page investigative report–“St. Louis, the Mayor, the Mob and the Lawyer”– appeared in the magazine’s May 29, 1970, issue. The account named names, dates and places and included information from FBI reports and wiretap transcripts.

The story that Bauman had prevented from running locally had gained national exposure.

Walsh alleged the mayor had mobbed-up business ties and main-rained a “steady liaison” with organized crime figures through Anthony Sansone, his campaign manager. Sansone, a successful real estate broker, was the son-in-law of Jimmy Michaels, leader of the Syrian faction of St. Louis’ underworld. Michaels, in turn, was a criminal associate of Anthony “Tony G” Giordano, don of the St. Louis mafia.

Anthony Sansone Sr.

Walsh reported Sansone arranged a 1964 campaign-strategy session between Michaels and the mayor. After Cervantes won the mayoral primary, according to Walsh, Sansone attended another strategy meeting with Michaels and Giordano.

The lawyer mentioned in Life’s headline was St. Louis criminal defense attorney Morris Shenker, part owner of the Dunes casino in Las Vegas and counsel to numerous mobsters and corrupt labor bosses, including Teamster President James R. Hoffa and Lawrence Callanan, the head of Steamfitters Local 562 in St. Louis. Despite these questionable associations, Cervantes had brazenly appointed Shenker, a political crony and Democratic power broker, to head the city’s Commission on Crime and Law Enforcement.

The mayor and his backers reacted to the Life story as if Walsh had set off a bomb inside the rotunda at City Hall. Cervantes complained that he was not only defamed, but that the reputations of the entire city and all its inhabitants were under attack. Shenker and Sansone denied wrongdoing, labeling the accusations as false. The mayor subsequently sued Walsh and the magazine for libel but failed to recover damages. In the court of public opinion, however, local broadcast and print media overwhelmingly sided with Cervantes.

 

The St. Louis Post-Dispatch, for instance, editorialized that “… visible evidence of everyday affairs in St. Louis does not support the correlative accusation of Life that organized crime flourishes here. On the contrary the city appears to be unusually free from the usual symptoms of such crime….”

The idea that St. Louis had been spared the deleterious influence of organized crime must have come as news to Delugach, Walsh’s former partner. They shared the 1969 Pulitzer Prize for doggedly investigating Local 562. The byline of Delugach and Walsh appeared at the top of more than 300 stories from 1965-1968. Their collaborative effort revealed a pattern of labor racketeering that resulted in multiple federal indictments having to do with a kickback scheme related to the sale of insurance to the union’s pension fund.

By the time Walsh’s Life article appeared, Delugach had also left the Globe-Democrat, joining the staff of the Post. His tenure was brief, however, lasting only a year-and-a-half. Shortly after the Post absolved the mayor and declared the city free from organized crime, Delugach quit in protest.

“If I had thought that this was just the opinion of the editorial page of the Post, I might have borne up under it,” he told SJR, which covered his resignation in its first issue.

Instead, Delugach found that the same attitude permeated the newsroom.

“I didn’t want to work for a newspaper that had this view of organized crime and that had this way of dismissing the most serious accusations against its top (city) official.” Delugach found the premise that organized crime was non-existent in St. Louis untenable.

“I think it has been voluminously proved that it is a major factor in all kinds of crime–in all cities,” he said.

When he made this statement, Delugach was 44 and had been a staff reporter at three daily newspapers in Kansas City and St. Louis for nearly two decades. After leaving the Post, he moved to the West Coast, where he continued as an investigative reporter for another 20 years, retiring from the Los Angeles Times in 1989. Reached by phone at his home in Los Angeles, the 82-year-old retiree still expressed outrage over the affair.

“It was really an insult for them to come out with that attitude in print,” says Delugach. “I took it very personally. I figured there was no future here for me. The Globe-Democrat had people that had an interest in not stirring things up, but the Post-Dispatch, they were just so aloof. Even after what we did–getting the Pulitzer Prize–they didn’t act like it had any validity at all. They didn’t demonstrate at all that they considered it important after they hired me. I don’t know why they bothered.”

Delugach recalls the Post sent him to Alaska to cover the oil boom for two months. It was a plum assignment, but far from the beat that had nabbed the Pulitzer. In retrospect, it almost seems like the Post used its deep pockets to send him into exile.

By contrast, Delugach and Walsh had the full support of Richard Amberg, the previous publisher of the Globe-Democrat who originally teamed them up. But after Ainberg died and Bauman took over in 1967, Walsh noticed a change in course.

“Al and I were having a lot of difficulty with Bauman,” says Walsh. “He began to squeeze us on what we were doing, in respect to the steamfitters.”

The impasse reached a critical stage after Walsh learned through his sources in Washington that top Department of Justice officials had quashed the federal criminal prosecution of those involved in the $1 million steamfitters’ kickback conspiracy case.

“We wrote that story and handed it in,” says Walsh. “He (Bauman) killed it.”

Walsh says he then leaked the piece to Wall Street Journal Reporter Nicholas Gage. After the Journal ran the story, Delugach and Walsh were free to report on it in the Globe-Democrat. More important, the news coverage forced the Justice Department to reverse its decision and go forward with the prosecution.

“We wouldn’t have won the Pulitzer Prize had the indictment not been returned,” Walsh says.

The defendants included the president of the First United Life Insurance Co. of Gary, Ind., and two officials of Local 562. Court documents named Shenker and Callanan as beneficiaries of the scheme, but they weren’t charged. John “Doc” Lawler, another top steamfitter official, also allegedly benefited from the kickbacks.

John O’Connell Hough, Lawler’s personal attorney and un-indicted co-conspirator, agreed to cooperate with federal prosecutors, but never got the chance to testify. The Clayton-based lawyer disappeared in the Miami area on Aug. 12, 1967. Two months later, fishermen discovered his body in a secluded pine grove near the Inter-Coastal Waterway several miles north of Bal Harbour, Fla. Hough had been beaten and shot to death with .38-caliber handgun. The homicide remains unsolved.

After Hough’s murder, two prosecution witnesses refused to testify, and the defendants were acquitted.

In the intervening decades, the Post’s editorial position has been accepted as unequivocal. Nowadays it is taken for granted that organized crime no longer exists in St. Louis.

Walsh refuses to speculate on whether the mob is dead or alive here.

“I’ve been gone for 40 years. I don’t know what’s going on there. I don’t know what the Post is doing or not doing.”

The veteran reporter is sure of this much: “I would not want to be a member of any organization, or any group or any entity that counts Duncan Bauman as a member. I think he’s a stain on St. Louis journalism.”

 

 

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 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 later changed his decision andpleaded 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.

 

 

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.