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Stenger resigns after federal ‘pay-to-play’ indictment

Steve Stenger walks into court in downtown St. Louis

ST. LOUIS COUNTY, Mo. - The US Department of Justice says that St. Louis County Executive Steve Stenger has been indicted for a pay-for-play scheme. He pled not guilty in federal court this afternoon.

Stenger's attorney, Scott Rosenblum, says that he is resigning from the office of St. Louis County Executive. A letter of resignation has been obtained by FOX 2. It says: "It has been an honor to serve the people of St. Louis County as St. Louis County Executive. The past four years have been some of the most fulfilling in my professional career. I have determined after much thought that it is in the best interest of our county and my family that I resign as St. Louis County Executive effective immediately."

It is unclear who will be named the next St. Louis County Executive. There will be a special meeting at 6pm to pick a new leader. That person like Stenger will be a Democrat but does not necessarily have to be a St. Louis County Council member.

Stenger was indicted last Thursday on three counts of honest services bribery/mail fraud. If convicted, each charge carries a maximum penalty of 20 years in prison and a $250,000 fine.

"These are very serious charges. This clearly would’ve had a negative effect on the county executive’s ability to govern. That affects the whole region. The County Executive made the right decision in resigning. I will work with the new County Executive," writes St. Louis Mayor Lyda Krewson in a tweet.

One of the people specifically named in the indictment is John Rallo. The indictment says that Stenger took official action to ensure that Rallo and his companies benefitted from campaign contributions. The indictment alleges that Stenger took steps to hide the illegal activity, including making false public statements.

Steve Stenger's resignation letter.

A federal grand jury has subpoenaed records from St. Louis County earlier this month.  They requested that Stenger give them his call history texts and emails, with current and former county employees, related to contracts awarded by county departments. They were also asked to provide information regarding employment contracts for about seven senior staff members and related contracts awarded by the county to investors who donated to Stenger's campaign.

The subpoena specifically mentions the contract regarding the Northwest Plaza lease which was awarded to a company that donated over $300,000 dollars to Stenger's campaign and the contract deal for two publicly owned Industrial Parks in Wellston that were sold to investors who had donated about $40,000 dollars to Stenger's campaign.

There have been calls for Stenger to resign during this investigation.  Former police chief turned county councilman Tim Fitch issued a statement in April calling for Stenger to step aside.  Several of Stenger's senior staff members have resigned over the past few weeks.

This press conference was held on the federal courthouse steps after Stenger's hearing:

Read the entire indictment here:

This is the release issued by the Department of Justice:

"The Indictment alleges that beginning in October 2014 and continuing through December 31, 2018, Stenger and various individuals and companies schemed to defraud and deprive the citizens of St. Louis County of their right to his honest and faithful services, and the honest and faithful services of the St. Louis Economic Development Partnership’s Chief Executive Officer, through bribery and the concealment of material information. The purpose of the scheme was for Stenger to secretly use his official position to enrich himself through soliciting and accepting campaign contributions from individuals and their companies in exchange for favorable official action, and for individuals and their companies to enrich themselves and their companies by secretly obtaining favorable action for themselves and for their companies, through corrupt means.

Specifically, the Indictment alleges that Stenger, in exchange for campaign donations and several fundraising events, took official action to insure that John Rallo and his company, Cardinal Insurance, obtained insurance contracts through St. Louis County during 2015 and 2016. Further, the Indictment alleges that Stenger took official action to insure that John Rallo and his company, Cardinal Creative Consulting, obtained a 2016 consulting contract through the St. Louis County Port Authority. Additionally, Stenger took official action to insure that John Rallo and his company, Wellston Holdings, LLC, obtained options to purchase two properties in Wellston, Missouri which were held by the Land Clearance for Redevelopment Authority of St. Louis County during 2016 and 2017. The Indictment also alleges that Stenger, in exchange for campaign donations and fundraising activities, took official action to insure that “Company One,” as set forth in the Indictment, obtained a 2019 - 2021 state lobbying contract from the St. Louis Economic Development Partnership. The Indictment alleges that Stenger took steps to hide, conceal and cover up his illegal conduct and actions, including making false public statements.

Stenger is scheduled to appear at 1:00 p.m. for his initial appearance and arraignment on his Indictment before U.S. Magistrate Noelle Collins, Courtroom 15 North, Thomas F. Eagleton Courthouse, 111 S. 10th Street, St. Louis, Missouri.

If convicted, each charge carries a maximum penalty of 20 years in prison and a $250,000 fine. Restitution is also mandatory. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.

As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.

This case is being investigated by the Federal Bureau of Investigation and the Postal Inspection Service with the assistance of the Internal Revenue Service Criminal Investigations. Assistant U.S. Attorney Hal Goldsmith is handling the case for the U.S. Attorney’s Office."

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