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Stenger Campaign Donor Pleads Guilty In Corruption Case

John Rallo (left) walks out of federl court after pleading guilty to federal corruption charges Tuesday
Carolina Hidalgo | St. Louis Public Radio
John Rallo (left) walks out of federal court after pleading guilty to federal corruption charges Tuesday.

Updated 9:45 p.m.  Tuesday with effort to strip pension from Steve Stenger — An insurance executive who received contracts with St. Louis County in exchange for campaign contributions to then-County Executive Steve Stenger has pleaded guilty to federal corruption charges.

John Rallo admitted to bribery, mail fraud and theft of honest services in an appearance Tuesday in front of U.S. District Judge Richard Webber. He will be sentenced Oct. 15. He could face more than two years in prison, although Webber does not have to follow federal sentencing guidelines.

Neither Rallo nor his attorney commented as they left the federal courthouse in downtown St. Louis. Federal prosecutors also did not comment, citing the ongoing nature of the investigation.

Rallo donated thousands of dollars to Stenger’s campaigns for county executive. In exchange, Stenger and Sheila Sweeney, the former head of the St. Louis Economic Development Partnership, made sure that Rallo got a consulting contract with the county, despite having no marketing experience. Sweeney also helped ensure that another company of Rallo’s could purchase two properties in Wellston, near the St. Louis County and Municipal Police Academy.

Rallo had also pushed Stenger to award his company, Cardinal Insurance Group, the contract for employee voluntary benefits, although that deal never materialized.

Sweeney was ousted from the development agency in January, several months after the St. Louis Post-Dispatch reported on the consulting contract Rallo received and other questionable bidding practices at the Partnership. Stenger resigned after being charged in May.

Stenger and Sweeney have already pleaded guilty to their roles in the scheme and will be sentenced in August.

Rallo, who now lives in Salt Lake City, has an active license to sell insurance in Missouri. A spokeswoman for the state Department of Insurance, Financial Institutions and Professional Registration said Rallo is required to notify the department of his conviction. Regulators will investigate to determine if he will face professional discipline.

County pensions

Also on Tuesday, the St. Louis County Council took the first step to stripping both Stenger and Sweeney of their pensions.

The legislation, sponsored by Councilman Tim Fitch, R-Ballwin, blocks anyone convicted of a variety of felonies related to their role as an official or employee of the county from receiving a pension after their conviction date. It also allows the county to ask for a refund of its contributions, although employees would get to keep the benefits they have already received.

Fitch told St. Louis Public Radio in May, “I do believe that it’s wrong for someone to be convicted of a felony, of multiple felonies, while serving an elected office and then be able to at some point collect their pension.”

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Rachel is the justice correspondent at St. Louis Public Radio.
Jason is the politics correspondent for St. Louis Public Radio.