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John Rallo

Businessman John Rallo leaves federal court in St. Louis on Tuesday, July 16, 2019, after he pleaded guilty to three felony counts of honest services mail fraud/bribery. Photo by David Carson, dcarson@post-dispatch.com

It was as though Assistant U.S. Attorney Hal Goldsmith was personally chiseling the epitaph on the gravestone of Steve Stenger’s political career.

Goldsmith stood before Senior U.S. District Judge E. Richard Webber on Tuesday afternoon as former St. Louis businessman John G. Rallo pleaded guilty to three felony fraud charges related to a scheme by which he gave campaign donations to Stenger, the former St. Louis County executive, in order to obtain government contracts.

These are the words Goldsmith used to describe the scheme orchestrated by the two men, who still await sentencing for their crimes:

Bribery. Corrupt. Cover up. Fraud. Theft. Sham. Pay-to-play.

It all started with a steak dinner. There’s irony in that.

For at least as long as Stenger has been in politics, there have been debates in Missouri, mostly at the state legislative level, about limiting the ability of elected officials to receive gifts from lobbyists and others. For as long as I’ve been reporting on this issue, the response from most politicians who opposed limits on such gifts, including free meals, was some version of this: “I can’t be bought for the price of a steak dinner.”

Perhaps not. But what about a steak dinner plus $5,000?

According to Rallo’s plea agreement, that’s what he gave Stenger that night in 2014 at Sam’s Steakhouse. Rallo had conditions.

“During that dinner, Rallo told Stenger that he was tired of giving money to politicians and not getting anything in return,” Goldsmith wrote in the plea agreement, which cites the facts of the case.

Truth be told, Rallo’s sentiment is hardly unheard of in politics.

Nearly every businessman who gives money to a politician expects something in return, even if it goes unsaid: access, a phone call, some vague consideration on future matters.

Take Sam Hamra. In 2006, the Springfield businessman wrote then Gov. Matt Blunt an angry letter. Hamra, who invests in low-income housing tax credits, was unhappy that his company wasn’t getting what he thought was his fair share of the credits, doled out annually by the Missouri Housing Development Commission. In his letter to the governor, Hamra pointed out that he had been a generous campaign donor.

To his credit, Blunt dismissed Hamra’s letter.

I wrote about the incident. Some time later, Hamra, who also owns fast-food franchises, sent me a letter that included two coupons to Wendy’s. This is just the way he believed business was done in America. He’s hardly alone.

In fact, Stenger learned that lesson early in his career.

It was 2009 and he was a member of the County Council representing south St. Louis County. A gaming company was seeking rezoning for property in North County for a proposed casino. The biggest St. Louis casino operator, Pinnacle Entertainment Inc., opposed the rezoning. Significantly, Pinnacle operated the River City Casino in Stenger’s district.

CEO Dan Lee flew in from Las Vegas for the meeting. Lee met personally with Stenger to lobby him to oppose granting a rezoning that would benefit the casino’s competitor.

Stenger voted for the North County casino rezoning.

Lee went ballistic.

He very publicly went up to Stenger’s assistant near the council dais and told her that Stenger “just made the worst mistake of his political career. I won’t forget this.”

Shortly thereafter, Lee resigned. An investigation by the Missouri Gaming Commission ended with no discipline of the former CEO.

Here’s how Lee’s attorney, Jim Deutsch, characterized what happened at the time:

“Not all inappropriate behavior is a violation of statutes or regulations,” Deutsch said, “and they’re not authorized to punish bad ideas or bad behavior.”

Rallo, Stenger and others aren’t being punished for bad behavior, but for breaking the law in awarding a “sham” contract from the St. Louis Port Authority to a consulting company Rallo set up to help complete the “bribery scheme.”

Most of the Port Authority’s money comes from the casino that Lee used to run.

Revenge, they say, is best served cold.

St. Louis County Executive Steve Stenger pleaded guilty to pay-for-play charges: Some background reading

Here's a collection of Post-Dispatch stories looking at some of the controversies surrounding the St. Louis County Executive.

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