ST. LOUIS — The businessman at the center of former St. Louis County Executive Steve Stenger’s pay-to-play indictment was sentenced in federal court on Thursday to 17 months in prison, plus two years probation.
John Rallo, who federal prosecutors say gave campaign donations to Stenger in exchange for real estate deals and a sham contract with economic development agencies, is the final person to be sentenced in an investigation that rocked regional politics. The investigation also led to charges against Stenger and his chief of staff, Bill Miller, as well as Sheila Sweeney, the former head of the St. Louis Economic Development Partnership.
In U.S. District Judge E. Richard Webber’s courtroom Thursday, with about 30 family and friends in attendance, Rallo apologized to the residents of St. Louis County.
“I let my ambition get the better of me, and it clouded my judgment,” he said.
Rallo, who lived in west St. Louis County and now lives in Utah, first met Stenger at Sam’s Steakhouse, during the politician’s initial 2014 run for county executive. The meeting was arranged by Sorkis Webbe Jr. — a former St. Louis alderman who was charged in the 1980s for vote fraud and harboring a fugitive.
Rallo, an insurance businessman, made his first $5,000 contribution to Stenger that night in exchange for assurances that Stenger, if elected, would help Rallo win a county insurance contract.
When that plan failed to work, Stenger and his staff turned to the St. Louis County Port Authority, an agency run by the Economic Development Partnership. In 2016, the port authority awarded a sham $130,000 marketing contract to Rallo. In 2017, another Partnership-run agency, the St. Louis County Land Clearance for Redevelopment Authority, sold two large pieces of real estate on Page Avenue in Wellston to Rallo and his business partners.
The Wellston deal and Port Authority contract were first reported by the Post-Dispatch in 2017 and 2018. A federal search warrant for Stenger’s phone said an investigation began in March 2018, shortly after the marketing contract story was published.
County sells two sites for far under values; $30,000 in gifts is traced
Rallo’s lawyer, John Rogers, asked the judge to give Rallo probation on Thursday, noting he has no criminal record, is employed and has five children, two of which are 10 and 11.
“He coaches the teams; he brings the kids to school,” Rogers said.
The media attention from the case has already damaged Rallo’s reputation. He and his immediate family have left the region, and one of his businesses has surrendered its insurance license. The family name — once prominent in the construction business, with some relatives even working as subcontractors on the Thomas F. Eagleton U.S. Courthouse where he was sentenced — has been impacted, Rogers said.
Rallo “understands the embarrassment he has has brought to the family,” Rogers said.
He said Rallo has been diagnosed with thyroid cancer, which is now in remission. Rallo, who pleaded guilty in July, has had his sentencing delayed several times.
But Assistant U.S. Attorney Hal Goldsmith said Rallo’s crimes were not a “one-off,” with “bribes” in the form of campaign contributions continuing for years. Rallo, Stenger and Sweeney attempted to conceal their scheme, making false public statements to the press and amending business filings. Though foiled by the federal investigation, Rallo had hoped to flip the Wellston land — still owned by a company Rallo was affiliated with — potentially making “millions of dollars,” Goldsmith said.
He contributed “to a general sense of distrust of St. Louis County government” by its residents, the prosecutor said, arguing there was “a need to deter other businessmen and other elected officials” from pay-to-play politics.
Rallo could have faced up to 27 months in prison. Judge Webber said it was not a case where a businessman “unintentionally got entangled in a corrupt” enterprise. But he noted that Rallo, his business and his family have suffered.
Not considered in the case was the Missouri’s Commissioner of Securities’ June decision ordering Rallo to repay $1.2 million to investors in a company Rallo was affiliated with. A complaint said Rallo had actually funneled the money, intended for Food for Health International LLC, to other businesses.
Outside of court, Rallo did not respond to questions from the media, but Rogers said he appreciated “the conscientious decision of the court.”
John Cross, whose initials appear in federal indictment, also worked at the St. Louis Economic Development Partnership for a year.
Asked whether the investigation was ongoing, Goldsmith declined to comment.
Updated at 2 p.m.
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