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Plenty of blame: Audit slams Page, council and county auditor for failures that enabled Stenger schemes

Plenty of blame: Audit slams Page, council and county auditor for failures that enabled Stenger schemes

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County Council Meeting

St. Louis County Executive Steve Stenger, left, responds to a public comment on the death of a county jail inmate while District 2 councilman Sam Page listens during a county council meeting on Tuesday, April 2, 2019 in the County Administration Building. (Colter Peterson, cpeterson@post-dispatch.com)

CLAYTON — Weak oversight by the St. Louis County Council under then-Chairman Sam Page and by County Auditor Mark Tucker contributed to the abuses of former County Executive Steve Stenger, according to a blistering report by Missouri Auditor Nicole Galloway’s office.

But the audit also found several instances — before and after Page succeeded Stenger as county executive — in which he and the council had shored up vulnerabilities Stenger had exploited.

A draft of the audit, which Galloway’s staff presented on Tuesday to the County Council during a closed-door meeting, was obtained by the Post-Dispatch. The council has 30 days to respond to the audit’s findings, and the final report is scheduled to be issued this fall.

The audit discussed multiple cases in which Stenger and his close advisers manipulated or subverted the county’s procurement process or meddled with contracts issued by the St. Louis Economic Development Partnership and St. Louis County Port Authority.

Stenger pleaded guilty to three federal counts in a pay-to-play scheme in which he asked for and received campaign contributions from people seeking to do business with the county. He was sentenced to 46 months in prison, a term later reduced to 27 months. In his plea agreement, Stenger admitted his actions caused a loss to taxpayers of between $250,000 and $550,000. The council voted 5-1 to select Page to succeed Stenger on April 29, 2019, hours after Stenger’s resignation. In his bid to fill the second two years of Stenger’s unexpired term, Page will face Republican Paul Berry III, Green Party candidate Elizabeth “Betsey” Mitchell and Libertarian Party candidate Theo Brown Sr. on Nov. 3.

Page’s chief of staff, Winston Calvert, said in a statement, “We knew county government needed to be reformed and we have worked to do that in the past year. We are grateful for the state auditor’s help identifying more work to be done.”

As for the council’s oversight, Calvert said it was the leadership of Page that “helped bring down a corrupt Stenger administration.”

The audit highlighted the failure of the council to provide oversight in the 20-year lease for office space at the former Northwest Plaza shopping mall in St. Ann owned by friends of Stenger who had donated $365,000 to his political campaign.

After a Post-Dispatch investigation in early 2018 found the project was much more costly than Stenger initially had let on, the council launched an inquiry into the deal and now is in mediation with the mall’s owners, brothers Robert and P. David Glarner, to renegotiate the terms.

The state audit found the council could have done much more at the time the Northwest Plaza deal was signed in 2016 to prevent the situation from happening. (The chairman of the the council at that time was Mike O’Mara, D-4th District.)

Even though many county employees thought the Northwest Plaza deal was abusive, the council allowed Stenger to circumvent established procurement procedures without being questioned and failed to request an appropriate analysis of the deal before approving the lease, the audit found. The night of the 5-1 council vote approving the contract in July 2016, Page said the site was a great location for the county election board and a “great value” for taxpayers.

And in a case in which the council signed off on a swap of properties in west St. Louis County with another Stenger donor, the audit found the council had “delegated its authority to (Stenger) without adequate oversight.”

Holding contracts

The state audit found Stenger made a regular practice of abusing his authority by sitting on contracts instead of signing them to allow the work to be started, giving himself more control of the process.

Among 21 contracts tested by auditors, Stenger held back 13 of them for at least two weeks, and four of them for longer than 100 days, with the longest being held nearly nine months. The practice frequently resulted in frustrated phone calls or messages from vendors or county employees wondering what was holding up a job. Because of Stenger’s reticence, the county in 2015 lost federal funding for a $164,000 sidewalk project.

Allowing the county executive to unilaterally cancel a contract served no purpose and harmed transparency, the audit found. And the problem has yet to be fixed. Allowing the council to execute contracts without the executive’s signature would help prevent delays and add more transparency, the audit found.

Political appointee pay

The state audit also ripped county executives for increasing pay for some positions without the job titles changing.

For example, director of communications Doug Moore is paid $110,885, 48% more than the position paid in 2015. The audit found that several appointees had received wage increases during countywide wage freezes, but it was not clear under which county executive those occurred.

The audit criticized a longstanding practice of county executives — that continues under Page — to pad their executive staffs and charging salaries to other departments.

And it said the County Council does not review the political appointments or advantage of its power to set the rate of pay for those positions, allowing the county executive to shift about $1 million in salaries to other county government departments.

As a result, the state audit found, the county’s budget does not present the public with a true picture of the county executive’s staffing.

The state audit also found the county’s personnel division does not verify certifications and qualifications required by the charter for appointed employees, which could result in unqualified people in appointed jobs. Of 22 appointed employees, eight were required by charter or ordinance to have a certification — but six did not.

The audit found that none of Stenger’s political appointees had job descriptions needed to clarify duties, qualifications and a chain of command. Page has made some improvements, the audit found, but 46 of 60 appointees did not have job descriptions.

Focus on county auditor

The state audit was especially critical of the county auditor’s office under Mark Tucker, a 2017 Page appointee whom Stenger routinely mocked and criticized as being unqualified, but whom Page routinely defended.

Tucker, who reports to the County Council, could not be reached for comment on Wednesday.

The audit said “improved oversight from the County Council and the County Auditor would have helped identify some portion of the inappropriate and criminal actions of the former County Executive.”

The state audit found the council “is not using the County Auditor to investigate concerns that are brought to the attention of the council. It found that the county’s requirements for the auditor’s qualifications do not ensure the auditor will “possess the knowledge, skills and other competencies to ensure the position is adequately staffed and allowed (Tucker) to hire personnel without any auditing experience.”

It found that Tucker has been “unable to complete audits planned” and conducted audits that were not in compliance with government and internal auditing standards. The office completed audits of just three of the nine areas it had planned to audit in 2018, and the following year issued “at most 2 audits” and that Tucker could not even say how many there had been.

“For comparison purposes, during calendar year 2019, the St. Charles County Auditor issued 8 audits while the personnel budget for the St. Charles County Auditor was approximately $125,000 less than the personnel budget for the St. Louis County Auditor,” the audit said.

Despite Tucker’s claims on his office website, audit reports and discussions with state auditors that his office had conducted audits in accordance with the Institute of Internal Auditor’s Code of Ethics and Standards and with the U.S. government “Yellow Book” auditing standards, the state audit found Tucker’s office had not. His staff has not complied with periodic peer review or met the Yellow Book’s continuing professional education requirements.

‘Best and final’ failure

The state audit also found that the county’s procurement division did not have a formal policy for asking bidders for “best and final” offers. As a result, the county could not ensure the bidding process was fair to all companies.

Pointing to the controversy earlier this year over a contract for inmate calling services at the county jail, the audit found that companies competing for a contract had been asked for inconsistent best offers and that a comparison could not be made between similar proposal types. The breakdown prevented a scoring committee from fairly evaluating the proposals.

The audit found that the council should establish formal policies and procedures for best and final offers.


St. Louis County Executive Steve Stenger's fall: Some background reading

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

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