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Stenger indicted, arrives for first appearance in federal court

With media in tow, St. Louis County Executive Steve Stenger and his attorney Scott Rosenblum leave federal court after entering a not-guilty plea on corruption charges on Monday, April 29, 2019. Stenger resigned his position Monday. Photo by Robert Cohen, rcohen@post-dispatch.com.

CLAYTON — On March 20, the day before a federal grand jury issued a subpoena to St. Louis County seeking records in a pay-to-play investigation that ensnared County Executive Steve Stenger, a judge authorized a federal agent to seize Stenger’s cellphone.

FBI Special Agent Andrew R. Ryder was also authorized to unlock the iPhone X by pressing Stenger’s fingers into the touch ID sensor or by using the phone’s face ID feature, according to a copy of Ryder’s search warrant application which was unsealed on Tuesday by U.S. Magistrate Judge Shirley Padmore Mensah.

Ryder filed a 24-page affidavit to demonstrate probable cause for taking Stenger’s phone. There was no record of whether the FBI successfully accessed Stenger’s phone data, but the 44-page indictment unsealed April 29 quoted many of his texts. Stenger pleaded guilty on Friday to a three-count indictment of theft of his honest services. He faces several years in prison.

The agent’s statement, which had several sections blacked out before its public release, provided some fresh insights into Stenger’s schemes and the origin and scope of the probe. And it pointed to the government’s interest in another Stenger donor seeking favors from the county executive that was not mentioned in the indictment.

The document also indicated that the government had gained access to phones owned by St. Louis Economic Development Partnership CEO Sheila Sweeney and businessman John Rallo, the Stenger donor whose lucrative county contracts were at the center of the federal sting.

Stenger did not return a request for comment. A lawyer for Sweeney could not be reached. A lawyer for Rallo said he had no comment.

On Feb. 5, 2018, the Post-Dispatch published its investigation of a Port Authority contract awarded to Rallo. The headline: “Business linked to Stenger contributor won a marketing contract. But there’s little to show for it.”

The FBI opened its investigation into that same contract on March 8, Ryder wrote.

“Multiple sources of information … have described to myself and others at the FBI a pattern whereby St. Louis County Executive Steve Stenger directs contracts and grants to be awarded to individuals and companies who have made political contributions,” he wrote.

The affidavit explored how Stenger, Sweeney and others used group texts to craft false statements to respond to questions from reporter Jacob Barker about the Rallo contracts.

In a text on June 16, 2018, the affidavit revealed, Stenger ordered Sweeney not to talk to Barker until they had reviewed his questions together. The newspaper on June 23 published a story under the headline: “Documents raise questions about the St. Louis Economic Development Partnership bidding procedures.”

The story disclosed that Rallo had sought guidance from Sweeney before successfully winning two county government deals.

In a group text with Sweeney and others, including Katy Jamboretz, who was then the Partnership’s vice president for marketing and communications, Stenger wrote that the story was “basically defamatory.”

Jamboretz suggested that they emphasize a 2016 email that had been provided to the Post-Dispatch in which Steve Grelle, an assistant vice president at the Partnership, had relayed Sweeney’s instructions that Rallo get no special treatment in his request for a business loan through a program operated by the Partnership.

“It would substantially help our case,” Jamboretz wrote.

Sweeney had written to Barker the day before about the email.

“There comes a point when you have to say enough is enough,” Sweeney wrote. This is now the third go around on the same story about John Rallo and I strongly disagree with the premise. We have on several occasions provided to the Post-Dispatch an email that stated no special consideration was given to Rallo, yet the Post does not take that fact into consideration at all. This vendor did not get special treatment.”

After the story posted, Jamboretz forwarded the Grelle email to Barker’s editor: “Jacob has had it for months and this never makes it in the story.”

But Ryder noted that the email discussed by Jamboretz did not concern the marketing contract for Rallo’s Cardinal Creative Consulting. “On the Cardinal Creative deal, which is what the newspaper was asking about at the time, Rallo was treated differently because he was a donor and Stenger instructed Sweeney to get Rallo the contract.”

Jamboretz, a former news anchor for KPLR-TV (Channel 11), left the Partnership earlier this year to join Common Ground Public Relations in Chesterfield as an account supervisor. Interviewed on Wednesday, she said she still considered herself a journalist and did not mean to mislead another journalist.

“I’m speaking to them in a text chain with extremely limited knowledge of what actually happened,” she said. “Because from where I sat at that point, Sheila was telling me we dealt squarely with John Rallo and I have this email to prove it. And I said, if you have the email, go and use it.”

“As this has progressed, it has made me understand how very little I was in on,” she said. “And to be abundantly clear, I have never been contacted by any investigators, but if they want to talk to me, I would be happy to sit down and be fully transparent.”

Crafting Stenger’s lies

In March 2017, another group text dealt with how to respond to Barker’s questions about the Port Authority’s no-bid hiring of the Blitz, Bardgett & Deutsch law firm, violating a state law that says port contracts have to be competitive.

“I think this would be my response,” Stenger texted the group, according to the FBI’s forensic examination of Sweeney’s phone. “I played no role directly or indirectly in the decision to hire (an attorney from Blitz, Bardgett & Deutsch) … I have no supervisory authority over the organizations(s) or the individuals mentioned.”

But the affidavit said a source told the FBI the statement was untrue — Stenger wanted the Partnership to hire one of the firm’s attorneys because he was a close friend and donor.

The affidavit revealed that Stenger rarely came to the office after his August primary victory over Ladue businessman Mark Mantovani. Around Sept. 17, chief of staff Bill Miller went to Stenger’s house in Clayton to ask some questions about county business. Stenger yelled at him: “I’m over here trying to run an election, trying to (expletive) raise money.”

Stenger told Miller he had gotten calls “all (expletive) day” from a donor who was pressing him for updates on a rezoning issue. The donor, whose identity was blacked out in the affidavit, had given $78,000 to Stenger’s campaign.

Miller offered to handle the situation to receive what Ryder characterized as a “bribe payment.” Stenger said he would handle it himself. And his phone records showed five texts and a phone call between Stenger and the donor. (Miller, who resigned several days before Stenger, could not be reached for comment for this story.)

A week later, the affidavit said, Stenger was asked about the probability of an entity voting for something. Who and what it was about were blacked out.

Stenger responded, “about a hundred.”

Miller said, “This deal’s getting done.”

Whatever the deal was, it never did get done, Ryder wrote. It stalled when the Port Authority ground to a halt as the County Council tried to wrest it from Stenger’s control.

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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