government’s sentencing memorandum...of missouri, and for its sentencing memorandum, states to...

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION UNITED STATES OF AMERICA, )

) Plaintiff, )

) NO. 4:19 CR 00312 CDP v. )

) STEVEN V. STENGER, )

) Defendant. )

GOVERNMENT’S SENTENCING

MEMORANDUM

Comes now the United States of America, by and through Reginald Harris, Attorney for

the United States, and Hal Goldsmith, Assistant United States Attorney for the Eastern District

of Missouri, and for its Sentencing Memorandum, states to this Honorable Court as follows:

1. By any standard or measure, defendant Steven Stenger’s criminal conduct calls

for a significant prison sentence. Application of the United States Sentencing Guidelines here

advises a sentence of 37 to 46 months’ imprisonment. Anything less would ignore the extent of

defendant’s criminal conduct and the substantial harm defendant’s conduct caused to the public.

2. Title 18, United States Code, Section 3553(a) sets out the factors this Court

should consider in fashioning an appropriate sentence. The first such factor to be considered is

the nature of the offense, 18 U.S.C. 3553(a)(1). St. Louis County, Missouri is the largest county

and political subdivision in Missouri, with approximately 1,000,000 residents. In comparison,

Jackson County, the state’s second largest county, has approximately 700,000 residents (which

includes 480,000 residents who reside within Kansas City), and St. Louis City has

approximately 330,000 residents. The approximately 1,000,000 residents of St. Louis County

all depended upon defendant Stenger to do the right thing as the elected County Executive, and

Case: 4:19-cr-00312-CDP Doc. #: 43 Filed: 08/02/19 Page: 1 of 12 PageID #: 208

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to provide them with his honest services. Through his extensive criminal conduct he abused

their trust in a substantial and harmful way. He placed his own personal interests and political

ambitions above all else, and engaged in a classic illegal pay to play scheme in order to fill his

own political coffers to fuel his political campaigns. Defendant’s criminal acts were for his own

personal gain, aimed at continuing his reign of power and authority in St. Louis County and,

because of the county’s significant population base, throughout the entire region and state.

3. This Court need only look to the language of the Grand Jury’s Indictment

returned in this case to get a clear picture of the nature and extent of defendant’s criminal

conduct. Defendant used his position to reward political donors with contracts and grants,

requiring subordinate employees who depended upon him for their jobs to take actions which

were illegal and unethical, many times with the threat of termination, express or implied,

hanging over the employees’ heads. Defendant’s criminal conduct relative to his pay to play

scheme began even before he was first sworn in as County Executive in January, 2015, when,

on November 25, 2014, following his election, defendant directed the CEO of the St. Louis

Economic Development Partnership to extend a lobbying contract to one of defendant’s

significant political donors. (Indictment at paragraph 31) Defendant’s pay to play schemes

continued throughout the entirety of his tenure as County Executive, at least through December,

2018 when he directed three members of his executive staff, and the CEO of the St. Louis

Economic Development Partnership, to once again ensure the extension of the lobbying contract

on behalf of the very same political donor, identified as the owner of “Company One” in the

Indictment. In many contracting situations there were one or more competing bids, and

defendant’s directive to award the contract to a political donor disadvantaged the competing

bidders, as, for example, in the December, 2018 lobbying contract situation. Those individuals


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and companies that submitted bids expecting a level playing field were also victimized by

defendant’s pay to play scheme. It is abundantly clear from the evidence gathered in this case

that one of defendant’s primary concerns was that his political donors receive the desired

contract or grant, and that he continue to personally win politically.

Defendant often appointed Board Members who he knew would take their direction from

him in order to carry out his directives. For example, defendant appointed his Chief of Policy

and his Chief of Staff, along with several other “friendly” individuals, to the Board of the St.

Louis Economic Development Partnership. Defendant recommended Sheila Sweeney be

appointed as CEO of the Partnership because he knew he could manipulate and control her, as

he did relative to the Cardinal Consulting contract through the Port Authority and the Wellston

Holdings land deals through the LCRA. Defendant’s actions and conduct were aimed at

ensuring that his directives in favor of his political donors were followed.

Defendant’s “politics” is what mattered to him. He directed that political cronies and

their family members be hired by St. Louis County as part of his effort to maintain his political

position, and to continue his scheme. As he told his executive staff on January 4, 2019, when

discussing his desire that the County Council not know which of the numerous department

budgets his various non-merit hires were being paid from:

“That’s one of the greatest powers I have. That I have 52 people who I hire and nobody knows where they’re coming from. For instance, there are 2 slots over at the jail. Nobody knows if Julia Childrey [Director of Department of Justice Services] put those people there, or I did. It’s good f---ed up. We like it f---ed up. I care about my politics.”

Defendant’s pay to play scheme in which he collected hundreds of thousands of dollars

in political donations for his own benefit was not only criminal, but also reveals a flagrant

disregard for the interests of those he was elected to serve. It matters not that the bribes were in


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the form of campaign donations, and not direct payments to defendant. The fact that he used

the bribes to fuel his political campaigns freed up his own funds to use for his own personal

lifestyle. For example, in the early years of his political career, defendant found it necessary to

loan his campaign account approximately $400,000. Through his political fundraising and

criminal scheme, following the November, 2018 general election he was able to pay himself

back that $400,000 directly out of his campaign account. For over four years he treated

important government contracts and grants as something to barter away as if they were his own

personal thank you gifts. Looking at the nature and circumstances of defendant’s offenses under

any imaginable standard, this Court should view them as serious offenses.

4. The next factor to be considered by this Court in sentencing defendant are the

history and characteristics of defendant, 18 U.S.C. 3553(a)(1). As to defendant’s history and

characteristics, one need only look to the year 2018, the most recent year of defendant’s tenure as

County Executive, to understand that defendant placed politics and personal gain over the needs

of the residents he was sworn to serve. In addition to his criminal conduct, Stenger “checked out”

during 2018, spending little time in his County Executive office, while most of his focus was on

fund raising for his own August primary and November general elections. As he told his executive

staff in a private conversation on November 7, 2018, following the general election:

STENGER: “How ‘bout that motherf---ers? I don’t show up to the Council meetings. I don’t do f---ing shit. I’ve been sitting at my house for the past two months f---ing raising money and then won by 20%! The world’s a f---ed up place.”

During 2018, in addition to fund raising, Stenger also spent a considerable amount of his

time planning and advocating for the merger of St. Louis City and County, a plan put forth by an

organization known as Better Together. Better Together’s ultimate plan to merge the City and


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County required an Amendment to the Missouri State Constitution, anticipated to be put to

Missouri voters during 2020.

The operations and activities of Better Together which were aimed at the consolidation of

St. Louis City and County were funded, primarily, by financier Rex Sinquefield. Sinquefield was

a major donor to Stenger’s 2018 re-election campaign, contributing approximately $700,000

through various of his own organizations and political action committees to Stenger’s political

efforts. Defendant Stenger was motivated to seek re-election as County Executive during 2018 in

large part by his desire to be named Metro Mayor in Better Together’s consolidation plan, as

discussed in a private conversation with his executive staff on October 9, 2018.

STENGER: “And in my second term I really don’t want to do anything, I just don’t. If we don’t get 2020 done I’d have to reevaluate, I don’t know if I want to do another four years, it just depends what it looks like.”

In order to further tie himself to the Better Together merger plan, during October, 2018,

defendant Stenger directed that the husband of Rex Sinqefield’s chief of staff be hired by St. Louis

County, and given the title of “senior policy advisor for administration and strategic initiatives.”

At defendant Stenger’s direction, this individual (referred to here as “John Doe”) was paid

$130,000 per year in his St. Louis County position. Unbeknownst to John Doe, defendant Stenger

advised his executive staff in a November 7, 2018 private conversation that he hired John Doe to

personally benefit from his own relationship with Better Together.

November 7, 2018: STENGER: “I have aligned myself, the very best way you can be aligned with these guys [Better Together], which is like John Doe, which is like, I’ll explain it to both of you [William Miller and Jeff Wagener] in person. John Doe is here for one reason and one reason only. John Doe is an insurance policy. His wife is working for Rex, it’s a good faith effort on my part, I’m saying, hey look at, I’m willing to hire John Doe at 130 Grand. She’s Rex’s assistant. Kind


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of sends a message to all of them that I trust them. And they’ve done a lot to demonstrate that they trust me and they should. They’ve given me a lot of money, they’re almost up to like 700 Grand.”

When defendant Stenger’s executive staff complained about John Doe, Stenger advised his staff

in a November 8, 2018 private conversation:

STENGER: “I just want him to shut up, and make your 130 Grand and leave everybody alone. Quit doing what he’s doing. If he doesn’t like it, I guess he could go somewhere else, but I’d rather have him stay, then I can get my money. Just enjoy himself, enjoy the chain of command. Some people are here because they’re married to the Chief of Staff of Rex Sinquefield, and you’re one of them. Calm down.” 1

Thus, just as defendant directed contracts to his political donors in his criminal pay to play scheme,

his desire to continue receiving political fundraising support drove his advocacy on behalf of the

Better Together plan, not a desire to serve the people. Further, defendant Stenger was motivated

to advocate for Better Together’s merger plan by the fact that the St. Louis County Council, whose

Members had been in conflict with Stenger for months, would no longer exist in a merged

Metropolitan City. Stenger told members of his executive staff in a November 7, 2018 private

conversation:

STENGER: “The only thing that’s really going to kill these guys [St. Louis County Council Members] is what’s coming in 2020. I’m telling you, we all need to embrace the f--- out of this. Embrace it. I mean embrace it. We’ve got to pray that we pass this f---ing thing….This answers a lot of our f---ing problems. Who wants to do another term with these people? I’d rather wipe them out.”

In the final analysis, as in his pay to play scheme, defendant was motivated to support the Better

Together merger plan for all of the wrong personal reasons, with no concern for the residents of

1 Despite John Doe’s efforts to work on County projects following his hiring, he was assigned very little substantive County work by Stenger or Stenger’s Chief of Staff, Bill Miller, and he worked primarily on Better Together matters, while being paid with St. Louis County funds.


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St. Louis County. As Stenger told executive staff members and close associates in private

conversations:

November 7, 2018: STENGER: “We’re pretty solid with leadership, with me being the person. I’m trying to get the Amendment to be drafted so I’m the leader. I’m just being overly cautious because I don’t want some f- --ing last minute change f--- me over.” * * * * December 6, 2018: STENGER: “I could give a f--- about 2020. I’m in the amendment. People are going to have me whether they like me or not….”

In further considering defendant’s history and characteristics, throughout his tenure as

County Executive, Stenger let his drive for personal political gain control his actions, as opposed

to doing what was in the best interest of St. Louis County. When a St. Louis County employee, a

company seeking to do business with St. Louis County, or someone in the political world took an

action which Stenger viewed as adverse to his own political ambitions or as undercutting his

authority and position of power as County Executive, he advocated strong retribution against that

individual or company, including the threat of termination when it was a County employee. Just

as defendant favored his political donors in his criminal pay to play scheme, defendant looked to

punish those who crossed him politically or who refused to carry out his directives. As noted in

the Indictment and in defendant’s Plea Agreement, when St. Louis County’s Director of

Administration, Pamela Reitz, refused to comply with Stenger’s directives to issue contracts to his

political donor John Rallo’s insurance company, Stenger threatened to fire her.

Another example involved the St. Louis County Counselor. During November 2018, St.

Louis County voters overwhelmingly approved Proposition Z which increased County sales taxes


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for a St. Louis Zoo development initiative. The State of Missouri Department of Revenue,

however, raised a question concerning the legality of the increased sales tax. The St. Louis County

Counselor then issued a legal opinion that the Proposition Z sales tax, passed by the voters, was

appropriate and legal. Stenger, upset that the County Counselor had issued the legal opinion in

support of the proposition, threatened to terminate him. Stenger discussed the issue with members

of his executive staff on January 2, 2019:

STENGER: “This jackoff [County Counselor] does not understand he was appointed by me. Everything he does comes back on me….Why would you ever give a legal opinion without talking to your boss. I’m his boss. If you don’t think I’m your boss, you’re going to find out in about 10 f---ing seconds….I’m the boss. F---ing don’t issue a legal opinion again without me or I’ll fire your f---ing ass. I’m f---ing done with that guy, I really am done….I’m not going to have a County Counselor who’s not mine….I appointed him for a reason, because he’s mine. We even talked to him about it, who f---ing cares, we were all happy if the Zoo didn’t get the f---ing tax. I don’t care. I hope they don’t. I really don’t f---ing care. It does nothing for me.”

A further example involved a significant minority contractor in the St. Louis area whose

mother is a former Missouri State Representative. Stenger was supporting St. Louis County

legislation that would fund the expansion of America’s Center in downtown St. Louis. The

proposed expansion would create substantial construction jobs for area companies. Relative to the

America’s Center expansion project, Stenger advised his executive staff on December 3, 2018,

that the contractor would not receive any work on the project solely as a result of his mother’s

political actions:

STENGER: “We’re not going to advance our bill if [Contractor] is anywhere near this thing, it’s not happening. Not. His f---ing Mom did commercials against me. If we let that go, we’re just the f---ing pussies of the universe. It’s not going to happen. It sends a message to him. F--- you. And to her, f--- you. He just lost out on probably 2% of a giant project. I mean, literally, that’s 7 Million Dollars to him.”


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As previously noted, during 2018 there was significant conflict between defendant Stenger

and Members of the St. Louis County Council. The Chair of the County Council during 2018 was

Dr. Sam Page, and Stenger and Dr. Page often were at odds with each other. A further example

of Stenger’s vindictive nature and character while serving as County Executive involved Dr.

Page’s employment as a physician. Stenger discussed Dr. Page in a private discussion with

members of his executive staff on October 19, 2018.

STENGER: “I’m going to meet with the head of [Page’s Employing Hospital] and let him know what’s going on with Sam. I think he already knows, but I’m gonna tell him, look man, there’s nothing personal, but this is gonna get real personal with Sam over the next two years, so you may not want him at your f---ing place any more. Get him fired. I’m serious too. It’s serious. I’m gonna f---ing unload on this guy, professionally….”

5. This Court’s sentence should also afford adequate deterrence to criminal conduct,

18 U.S.C. 3553(a)(2)(B). This defendant was the duly elected County Executive for St. Louis

County. He was charged with overseeing and running the operations of that public entity on

behalf of its one million residents. Defendant also exercised considerable authority and influence

over the County’s affiliated organizations, including the St. Louis Economic Development

Partnership, the St. Louis County Port Authority, and other similar organizations. This Court

should fashion a significant punishment not only to deter this defendant from future criminal

conduct, but in order to deter other individuals in similar governmental positions from

committing similar crimes. The government submits that a significant prison sentence in this

case will have that desired deterrent effect.

6. Upon being indicted by the Grand Jury for the instant offenses, defendant took

several actions. He resigned his position as County Executive, and surrendered his Missouri

law license and his CPA license. Within 5 days following his arraignment, defendant pled guilty


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to the Indictment. The government submits that defendant’s guilty plea was the result of the

overwhelming evidence against him, of which he and his counsel were aware. Defendant’s law

license would have been suspended pending full disbarment proceedings based upon the charges

and conviction in this case. He would have ultimately been barred from the practice of law for

a minimum of five (5) years by the Missouri Supreme Court. Likewise, defendant’s position as

County Executive would have been terminated based upon the charges and conviction in this

case. Defendant has been awarded acceptance of responsibility under the United States

Sentencing Guidelines in this case as a result of his guilty plea. The fact that he resigned his

elected position and surrendered his law license should not be the basis for any further

sentencing benefit in this case. In a public corruption case such as this, removal from public

office or resignation from one’s elected position is the ordinary and inevitable result. Similarly,

a practicing attorney who commits these types of crimes will have his license suspended and

will be barred from the future practice of law. There is nothing extraordinary about defendant’s

actions in this regard. Any suggestion by defendant that the surrender of his law license, and

his resignation from elected office should inure to his benefit at sentencing should be rejected

by this Court. Instead, this Court should hold this defendant to a higher standard of conduct

precisely because of defendant’s status as a licensed attorney and his position as having been

the highest elected official in the largest county in the State of Missouri. If the Court were to

consider these collateral consequences in framing a more lenient sentence, it would be

tantamount to favoring criminals with privileged backgrounds.

7. Defendant has an advisory guideline sentence under the United States Sentencing

Commission Guidelines of 37-46 months in prison. The government submits that there is no

basis whatsoever in the law or the underlying facts and circumstances here that would justify a


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downward variance to a sentence less than the advisory guideline sentence. It is the

government’s position that justice and fairness require a significant sentence of imprisonment

in this case. As a direct result of defendant’s criminal conduct, the adverse impact upon St. Louis

County and its residents who rely upon their elected officials to perform their jobs honorably

and with integrity has been substantial. This is not a victimless crime. The defendant’s pay to

play scheme, which went on for many years and impacted many contracts and grants, was aimed

at illegally filling his political coffers so that he could maintain his position of power and

authority, all to the detriment of the County’s residents. Our public officials should be held

accountable for their criminal conduct by appropriate prison sentences; the victim residents

deserve it, and fairness and justice require it.

8. In fashioning an appropriate sentence here, this Court needs to have a full and

clear understanding of the adverse impact defendant’s criminal conduct has had on the residents

of St. Louis County, St. Louis County Government, and the St. Louis Economic Development

Partnership and its affiliated organizations, the St. Louis County Port Authority and the Land

Clearance for Redevelopment Authority of St. Louis County. Attached as Government Exhibits

1 - 4 to this Sentencing Memorandum are four (4) letters which articulate in a way that the

undersigned cannot the truly substantial and harmful impact that defendant’s criminal conduct

had upon these individuals and entities. How does one even begin to measure the loss of trust

in its leaders by the citizens of St. Louis County as a result of defendant’s crimes?

9. Only a significant prison sentence will adequately reflect the seriousness of the

offense, promote respect for the law, and provide just punishment for defendant’s criminal

offenses as is required by 18 U.S.C. 3553(a)(2)(A). As President Roosevelt said:

There can be no crime more serious than bribery. Other offenses violate one law while corruption strikes at the foundation of all


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law. Under our form of Government all authority is vested in the people and by them delegated to those who represent them in official capacity. There can be no offense heavier than that of him in whom such a sacred trust has been reposed who sells it for his own gain and enrichment….

Theodore Roosevelt, Third Annual Message to the Senate and House of Representatives (Dec. 7,

1903). Those words are as meaningful and applicable today, in the instant case, as they were when

uttered 116 years ago. After all, public service is a public trust. Defendant broke that trust here

and should be justly punished.

WHEREFORE, the United States of America prays that this Honorable Court sentence

defendant to an appropriate term of imprisonment within the advisory guideline range, without a

downward variance, and for such other relief as this Court deems appropriate and just under the

circumstances.

Respectfully submitted,

REGINALD HARRIS Attorney for the United States /s/Hal Goldsmith

HAL GOLDSMITH #32984MO Assistant United States Attorney 111 S. 10th Street, Room 20.331 St. Louis, Missouri 63102 (314) 539-2200

CERTIFICATE OF SERVICE

I hereby certify that on August 2, 2019, the foregoing was filed electronically with the Clerk of the Court to be served by operation of the Court’s electronic filing system upon the defendant’s counsel of record.

/s/ Hal Goldsmith

HAL GOLDSMITH, #32984MO Assistant United States Attorney


Exhibit 1

Case: 4:19-cr-00312-CDP Doc. #: 43-1 Filed: 08/02/19 Page: 1 of 6 PageID #: 220

ST" L UIS COUNTY

July 24, zotg

Honorable Catherine D. PerryUnited States District Court for the Eastern District of Missourirrr South roth StreetSt. Louis, Missouri 6groz

R:e: United States u. SteuenV. Stenger, Case No. 4:t9CR3rz CDP/NCC

Dear Judge Perry:

As elected representatives of St. Louis County government, we are jointly writingto sumtnarize the defendant's negative impact on our County and its residents. Thisletter reflects our collective experience, as well as the experience of several Countyemployees, appointees, residents, and other impacted individuals, facts we uncoveredwhen we asked them to describe their experiences with the defendant. We hope this willassist you in deciding the fair and just sentence to impose in this case.

The defendant's behavior had a devastating impact on St. Louis County. Thedefendant's criminal conduct speaks for itself, but the impact of his behavior goes farbeyond the facts described in the indictment. For five years, the defendant bJhaved as ifhe was an untouchable king, particularly as he began to believe he would continue inoffice as the unelected "Metro Mayor" of a newly-combined regional government.Throughout his tenure, the defendant created and fostered a working environment forCounty employees and other elected officials that was marked by fear, intimidation,manipulation, and retribution.

The defendant con the good of St. Louis County.Early in his administratio "If you haven,t figured it outy_et, I'1n only interested in at benefit me." This remark u/trredefendant seemed to summarize the experiences many of his staffhad witlr-him. If a

e very interested in it. There is perhapsdollars to raise an unprecedented sum

The defendant treated any official decision

everything erse. ost important policy prioritybut ignored

As a chief executive and leader, the defendant failed in dramatic fashion. Hisformer staffmembers are Ieft feeling betrayed, used, demoralized, and disillusioned.

ADMINISTRATION BUILDING . 4 I S, CENTRAL AI/EMIE . CLAWON, MISSOUN 6 3 I 05

The County Govemment Center and the Council Chamber are accessible for persons with disabilities, If you need an accomodation orneed this material in an altemative format, please call Genevieve Frank, Adminishative Director, at (314) 615-5440 (voice) or call

RelayMO 7ll or l-800-735-2966 (TTY). FaxNumber: 314-615-7890


Hon. Catherine D. PerryJuly z4,zot9Page Two

The work atmosphere the defendant embraced was more that of a fraternityhouse thanan elected official's office. The defendant rarely appeared in his office, and would be

absent for weeks at a time. He did not respect the dignity of his office. When he didcome to work, he typically arrived late in the day wearing shorts, a t-shirt, and a baseballhat, and then he would immediately close the door and spend much of the day playingvideo games in his office before leaving early. He ignored offensive behavior. On atleast three different occasions, each involving a different female employee, thedefendant was present during instances of sexual harassment or learned of the instanceshortly after the conduct occurred, but the defendant never took investigative ordisciplinary action to rectify the situation. Literally laughing in the face of overt sexualharassment by campaign contributors and reporters, the defendant encouraged an

atmosphere where victims were without a voice and felt that they could not go to theCounty Executive to report inappropriate behavior.

The defendant's criminal enterprise put dedicated public employees in difficult ifnot impossible positions. The defendant's scheme often required County employees toact unethically, and sometimes put them in positions with such limited information thatthey could not have known then that what they were being told to do was inappropriate.County employees were trapped, knowing that their refusal to comply would result intermination or forced resignation. The attendant loss of tenured, experienced, andprofessional expertise left a lasting imprint on Countygovernment that is significantand widespread.

Some of the roughly 4,ooo County employees stood up against the defendant,and their courage and adherence to high ethical standards must be acknowledged. Butmany other employees were held hostage by a criminal, forced to choose betweenleaving for a less toxic work environment and remaining, accepting the stress andanxiety of hoping they would not be caught up in the defendant's corrupt behavior orunwittingly drawn into an illegal activity. Those who stayed as employees took homethe stress, anxiety, depression, and anger, which can spread like an infective virus tofriends and families, helping to create a hopelessness that St. Louis County would nevermove forward or address our real problems: racial inequities, economically devastatedcommunities, lack of opportunity, and so many more.

The defendant thrived on division. He tried to divide the County Council, pittingone Council member against another. He tried to divide Democrats from Republicans,-Democrats from other Democrats, and Republicans from other Republicans. He pittednurses against police officers, unions against other unions, and everyday people againsthis campaign contributors. Sometimes it seemed Steve Stenger couid nbf gef alo"Ig *ittany_one_ except his campaign donors. And he certainly got along well with ihem. In theend, other than with the defendant's_campaign contributors, thi defendant's leadershipstyle made County government largely dysfunctional, unpredictable, and hamstrung.


Hon. Catherine D. PerryJuly 24, zotgPage Three

The defendant's contentious relationships are legion, and they severely hamperedour region's progress. The defendant's personal animosityfor John Nations, the formerleader of Bi-State Development Corporation ("Bi-State"), his petty jealousy of formerMayor Francis Slay, his contempt for his colleagues on the County Council, and hishatred for anyone he saw as crossing him led to stalled budgets, wasted ta4payer dollars,and thwarted opportunities for regional collaboration. For instance, Bi-State long hadthe opportunity to refinance its debt and use any savings to implement new Metrolinksecurity strategies, but the defendant refused to approve the refinancing solely as a

result of his personal pique with Bi-State's leader. The opportunltyto refinance Bi-State's debt was but one of the countless opportunities that St. Louis County missed as aresult of the defendant's behavior.

He often scoffed at the expectation that he perform the duties of his office, and headamantly refused to lead on the important issues of the day. The defendant'ssentencing hearing is scheduled to ol",rr the week of Augusi 9, the fifth anniversary ofMichael Brovvn's death in Ferguson. Five years ago, the world's eyes focused on St.Irgit County. Taking office shortly thereafter, the defendant faced a County needingreal leadership, but he refused to engage genuinelywith the African-Americancommunity and he chose simply to ignore the vexing challenges that faced Countyresidents.

_ Similarly, the defendant's dismissal of decisions regarding the county's day-to-day-management and operations left the Countyparalyzed to addressing ongoingchallenges. His ilattention to Animal Care and Control's operations left it in disirray.His failure to lead the Justice Center to implement new policies and practices left it in achaotic state. His failure to address desperate budget issues, his disregard for his ownbudget director's advice, and his order that departments ignore the need for budget cutsleft the Countywith an annual operating deficit of several million dollars. His refusal toengage with the community resulted in the federal government pushing the Countytoward demolishing public housing units in Wellston. The defendant's lack of attention,care, and compassion almost led to the displacement of hundreds of Wellston residents,

Tany of which were children who could have been left homeless. In each instance, thedefendant ignored an issue where he did not see a monetarybenefit for himself or forhis political campaign.

-His selfish priorities left these and many other important policy

decisions unaddressed for years.

ay-to-play e

and wide.candidate the

countyboards and commissions. Each "r,h#;'jf,-?*:1':t::::r':ilill"Trl'Ji:ll"*County-these are just some of the results of St. Louis County's damaged biand.


Hon. Catherine D. PerryJuly 24, zotgPage Four

The defendant's systemic "pay-to-play" scheme also severely compromised St.Louis County's brand as a place for economic development and investment. Thedefendant told potential developers and potential Countyvendors that theywould"never get County business" if their proposal failed to benefit the defendant. Thereputation for "pay-to-play" behavior has discouraged ethical developers from planningprojects in the County and has discouraged ethical vendors from bidding on Countycontracts. We do not yet know the full extent of the financial damages, but we knowthat the financial toll and opportunity costs to the County over the coming years aresignificant and may be incalculable.

The defendant's conduct has taken its toll on so many good people of strongmoral character and respectable reputations who-despite their best judgment-trustedthe defendant, contributed to his campaigns, sought his help,lobbied him, or served as

one of his staffmembers, advisors, contractors, or consultants. Many of those peopleknew nothing about the defendant's criminal conduct and would not have approved of ithad they known. Nevertheless, they are left with the taint of being associated with SteveStenger. Many are unable to find work, form partnerships, or attract clients. Some areconnected to him in media reports despite their own innocence. The financial,psychological, and personal costs these individuals sustained are impossible to quantifz;money cannot compensate for their losses. It may be impossible to restore thereputations of some innocent, well-intentioned people whose only desire was to engagein public service and were shocked to find themselves working for a criminal.

_ The County also sustained significant financial losses resulting from contractsand agreements negotiated and entered into at the defendant's behest. The loss of thiscapital will have long-term effects on the liquidity, viability, and economic health of theCounty. The defendant's unbridled control of the Economic Development partnershipand Port Authority, as described in the indictment, shows his misus-e of public assets iorpersonal and political gain. As a result, real estate owned by St. Louis County either wassold to Stenger campaign contributors inappropriately or remains unsold becausepotential buyers refused to "pay up." The defendant appointed individuals withhistories of opposing minority-owned and woman-o*nid businesses participation inprocuring contracts for County business. As a result of the defendant;s misute ofdevelopment agencies, some leaders in the City of St. Louis have threatened to removethe City from the Economic Development partnership.

The defendant's behavior also impacted the general public. Our constituents losttrust in County Sovernment, its elected ofEcials, and in the democratic process as awhole.- Taxpayers saw public funds spent to reward political supporters rather thanserve the public good. The defendant's lasting impait on Counfr government,sreputation has rendered restoring trust in Countygovernment to be a generationalchallenge.


Hon. Catherine D. PerryJuly 24, zotgPage Five

In the final analysis, the defendant never behaved as if he appreciated or evenunderstood the significa- ce of his office. He never grasped the true meaning of publicservice. He was not a public servant. He violated the public trust and his oath of office.

The defendant dug an enormous hole for St. Louis County. The undersigned arecommitted to working together in pulling our County out and moving forward with apositive vision for the future. But we write now to express our hope that the Court ordera sentence that recognizes the immense negative impact Steve Stenger had on St. LouisCounty and orders restitution to compensate the people of St. Louis County for hiscrimes.

Sincerely,

Sam Page

County Executive

Walton GrayDistrict 4

G

Harder

Officer, County Council

5

District 7

Tim FitchDistrict 3


Exhibit 2


STLPARTN RSH P

Re:

August L,2O!9

The Honorable Catherine D. Perry

U.S. District Court for the Eastern District of Missouri

111 South 10th Street

St. Louis, MO 63102

lJnited Stotes of Americo v. Steven V. Stenger, Cause No. 4:19CR312

United Stotes of Americo v. Sheilo A. Sweeney, Cause No. 4:19CR375

Dear Judge Perry:

ln accordance with pleas entered by Steven V. Stenger and Sheila A. Sweeney, the defendants in the above

referenced cases (together, the "Defendants"), the St. Louis Economic Development Partnership (the

"Partnership") is a victim of crimes committed by Stenger and Sweeney. Please accept this letter as a

statement on behalf of the Partnership under 18 U.S.C. 5 377L.

The Partnership (formerly known as the St. Louis County Economic Council) is a non-profit corporation

formed, in 1984, under Missouri law and is the regional economic development agency for St. Louis. ln

2013, the Partnership adopted its current name and consolidated certain economic development

activities of St. Louis County and St. Louis City. The County Executive appoints eleven Directors to the

Partnership's Board; the Mayor of the City of St. Louis appoints four. All but a small portion of the

Partnership's activities are funded with public money. The Partnership also administers numerous

economic development political subdivisions and corporations including the St. Louis County Port

Authority ("Port Authority") and the Land Clearance for Redevelopment Authority of the County of St.

Louis ("LCRA").

The corruption scheme Stenger and Sweeney devised and executed, as described in their guihy pleas,

caused substantial direct financial loss to the Partnership, including the following:

Public contracts awarded to private parties at the direction of Stenger and approved by Sweeney,

some of which produced little or no public benefit for the Partnership and its affiliated entities

including the Port Authority and the LCRA.

Substantial and ongoing legal fees and costs for the Partnership's cooperation with the federal

investigation.

Uncalculated substantialcost of staff time to gather data and respond to investigation inquiries.

Direct out-of-pocket costs expected to be incurred as a result of the Missouri State Auditor's

impending audit.

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August L,2OL9

Page 2

ln addition to directfinancial losses of the Partnership, the Defendants'conduct has immeasurably injured

the public's trust and perception of the Partnership. Damage to the Partnership's reputation hinders its

effectiveness in accomplishing its mission to attract, retain and facilitate the growth of businesses in the

St. Louis region.

o Since approximately 2Ol7,local and national media outlets have published hundreds of articles

implicating the Partnership in the Defendants'crimes and conduct. Articles have characterized

the Partnership as "beleaguered" and at the center of political battles and the federal

investigation.

o The St. Louis County Council conducted an almost year-long, widely reported ethics investigation

of the Partnership, and withheld Partnership funding until recently.

o lndustry partners and potential Board members have expressed concerns about their own

reputations as a result of association with the Partnership.

o The Partnership had been held in high esteem by the lnternational Economic Development

Council (the "|EDC") as one of only 60 accredited economic development organizations in the

United States. The Defendants'use of the Partnership in public corruption has tainted the

Partnership's reputation within the IEDC and the wider economic development community.

Similarly, the Defendants' conduct interrupted normal Partnership functions and operational capability.

During Sweeney's tenure, from approximately September 30, 2015 to January 3,2019, more than 60% of

the Partnership's staff was replaced. By 2018, under intense public scrutiny and County Council

investigation, Partnership leadership and operations had become dysfunctional.

o Prio r to Ste nger a nd Sweeney's ten u re, the average yea rs of service of Pa rtners hip em ployees was

15 years. Today, five years later, the average years of service of Partnership employees is about 6

years.

o The total number of Partnership employees before Stenger and Sweeney administrations was 68.

Today, the total number of Partnership employees is 54.

The extraordinary loss of human capital and severe reputational damage are compounded by budget

uncertainties, all of which hinder the Partnership's ability to attract and retain talent in the economic

development field. lt is virtually impossible to estimate the time and cost to rebuild the Partnership's

reputation and capabilities.

Finally, there has been a human cost of the Defendants'crimes among current and former Partnership

employees.

Current employees express shock and anger at the betrayal by Sweeney knowing that she directly

deceived them to carry out directives from Stenger.

Employees report conflicts with family, and within their personal and professional communities

regarding their association with the Partnership

As described above, the actions of the Defendants severely injured the Partnership and its constituents

financially, operationally, and reputationally. This damage will have lasting impact on the entire St. Louis

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August L,2OL9

Page 3

region that the Pannership serves. Notwithstanding the wrongful and illegal actions of the Defendants,

the Partnership is committed to working to restore the trust of the St. Louis community in the Partnership

and to continuing its important mission to foster economic growth throughout the St. Louis region.

Thank you for considering this information.

Sincerely,

The Board of Directorc of the St. Louis Economic Development Partnership


Exhibit 3


ST. LOUIS COUNTY PORT AUTHORITY7733 FORSYTH BLVD., SUITE 22OO

ST. LOUIS, MO 63105

July 31,2019




St. Louis, MO 53102

United States of America v. Steven V. Stenger, Cause No. 4:19CR312

United States of America v. Sheila A. Sweeney, Cause No. 4:1-9CR375

Dear Judge Perry:

ln accordance with pleas entered by Steven V. Stenger and Sheila A. Sweeney, the defendants in the

above referenced cases (together, the "Defendants"), the St. Louis County Port Authority (the "Port

Authority") is a victim of crimes committed by Defendants. Please accept this letter as a statement on

behalf of the Port Authority under 18 U.S.C. S 3771.

The Port Authority is a political subdivision formed in 1978 under Chapter 58, Revised Statutes of

Missouri. The Port Authority's Board of Commissioners is appointed by St. Louis County, Missouri. The

Port Authority, which is managed by the St. Louis Economic Development Partnership, administers a

budget in excess S5,000,000 annually. At all times covered by the guilty pleas of Defendants, the Port

Authority's Board of Commissioners was appointed by and under the control of Stenger, and Sweeney

acted as Executive Director of the Port Authority.

The corruption scheme the Defendants devised and executed, as described in their guilty pleas, caused

substantial direct financial loss to the Port Authority, including the following:

a

a

A fraudulent contract between the Port Authority and Cardinal Creative Consulting was

executed at the direction of Stenger and Sweeney in the amount of 5130,000, for which the Port

Authority derived no benefit.

Other contracts that produced little or no benefit were awarded to private parties at the

direction of Stenger and Sweeney outside of normal Port Authority policies and procedures.

While still under investigation, the cost to the Port Authority of such contracts producing little or

no public benefit is as much as and potentially more than 5399,000.

More than 57,000,000 of unnecessary and ill-conceived grants of Port Authority funds were

awarded to various public and private parties at the direction of Stenger and Sweeney outside ofnormal Port Authority policies and procedures; more than 52,000,000 of such grants are being

honored for legal reasons while 55,000,000 of such grants have been cancelled to mitigate the

Port Authority's damages, albeit at substantial reputational cost to the Port Authority.

Outside consulting, Iegal and audit/accounting contracts and fees to investigate and review Port

Authority operations during the Stenger and Sweeney administrations have been entered into

and incurred, currently in excess of S250,000.

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July 31, 2019

Page 2

The impact to the Port Authority's normal operations of Defendant's corruption scheme has also been

significant. As a result of action by the County Council in response to the growing evidence of possible

malfeasance by Stenger and Sweeney, the Port Authority effectively ceased all operations and

expenditures of funds between June 2018 and April 2019, when Stenger resigned as County Executive.

The following are examples of Port Authority operations and legal obligations that were delayed or

impeded during the shutdown:

. The renewal, extension or payment of legitimate community reinvestment grants to other

organizations that relied upon such grants, including grants to Great Streets Natural Bridge

Community Development Corp.; Lemay Housing Partnership; UAW Labor Employment Training

Corp.; The Housing Partnership; NCADA Prevention First; Lemay Child & Family Center; and

Afft on Athletic Association.

o The management of a port authority improvement district and a foreign trade zone within the

port district, as described in Chapter 58, RSMo.

o Consideration of temporary and permanent easement requests for the Metropolitan Sewer

District.

. The purchase and sale of material real estate assets on behalf of St. Louis County and others.

o The redevelopment of the former Jamestown Mall.

o Completion of a major streetscape and stormwater drainage project in Lemay.

o The regular maintenance and management of Port Authority owned property, which has

resulted in numerous code citations and unsafe conditions.

o All other critical economic development activities ordinarily performed by the Port Authority.

The Port Authority has also suffered severe reputational damage as a result of Defendants'corruption

scheme, which will hinder its ability to perform its mission now and in the future. The Port Authority's

ability to effectively operate within St. Louis County and to attract local, state and federalfunding for its

projects is in large part dependent upon its credibility, and Defendants' conduct has immeasurably

injured the public's trust and perception of the Port Authority. Because the Port Authority was central

to the Defendants' schemes, it is impossible to estimate the time, effort and money that will be required

to eliminate the taint of Defendants'crimes and restore its previously outstanding reputation within the

community.

Finally, the Port Authority continues to be directly impacted by the damage done to the St. Louis

Economic Development Partnership, as it has historically relied entirely upon the Partnership for staffing

and leadership. As a result, allof the damage and impacttothe Partnership has resulted in an indirect,

but equally material, impact to the Port Authority. ln late June 2019, the newly appointed Board ofCommissioners commenced a detailed review of the records and operations of the Port Authority during

the approximately 4-year tenures of Stenger and Sweeney. Thus, the Port Authority is engaged in an

ongoing process to determine the impact of the Defendants'crimes on the Port Authority.

We appreciate the opportunity to provide this information for your consideration.

Sincerely,

The Board of Commissioners of the St. Louis County port Authority


Exhibit 4


LAND CIEARANCE FOR REDEVELOPMENT AUTHORITY7733 FORSYTH BLVD., SUITE 22OO

ST. LOUIS, MO 63105

August 1,,2019




St. Louis, MO 53102

Re United Stotes of Americo v. Steven V. Stenger, Cause No. 4:19CR31-2

United Stotes of Americo v. Sheilo A. Sweeney, Cause No. 4:19CR375

Dear Judge Perry

ln accordance with pleas entered by Steven V. Stenger and Sheila A. Sweeney, the defendants in the above

referenced cases (together, the "Defendants"), the Land Clearance for Redevelopment Authority of the

County of St. Louis (the "LCRA") is a victim of crimes committed by the Defendants. Please accept this

letter as a statement on behalf of the LCRA under 18 U.S.C. S 3771.

The LCRA is a political subdivision formed in 1956 under Land Clearance for Redevelopment Authority

Law, 55 99.300 to 99.650, RSMo. The LCRA's Board of Commissioners is appointed by St. Louis County

and is managed through the St. Louis Economic Development Partnership. The LCRA exists to eradicate

and redevelop blighted and insanitary areas as part of long-term comprehensive planning.

The corruption scheme devised and executed be Defendants, as described in their guilty pleas, caused

substantialdirect financial loss to the LCRA, including the following:

Fees and costs to review and respond to multiple deficient "development plans" submitted by

Wellston Holdings, LLC for land it acquired through the Defendants' illegal schemes.

Fees for crisis communications in connection with LCRA denials of Wellston Holdings, LLC's

deficient development plans.

Undetermined fees and costs of staff in connection with Wellston Holdings, LLC's deficient

development plans.

It is critical for the LCRA to recover the land sold to Wellston Holdings, LLC. The LCRA spent over 20 years

assembling and performing environmental cleanup on the two parcels of land sold to Wellston Holdings,

LLC. lt's estimated that the LCRA, mostly through federal grants, invested about S10,000,000 in

environmental cleanup costs to make the property suitable for development and marketable.

To recover these parcels, the LCRA's current legal mechanism is exercising a right of repurchase from

Wellston Holdings, LLC, which itself participated in the Defendants' illegal scheme. Repurchasing the

properties will result in additional financial hardship to the LCRA because the LCRA may be required to

borrow all or a portion of the amount needed to fund the repurchase.

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August 1,2019

Page 2

Finally, we respectfully suggest that the Court consider the substantial loss to the communities the LCRA

serves. Damage to the LCRA is damage to communities it serves. The LCRA has lost the oppottunity to

consider other development opportunities during Wellston Holdings, LLC's ownership of the properties.

Additionally, the LCRA has been at the center of public controversy in connection with the Defendants'

crimes, causing mistrust and loss of credibility in the communities it serves, such as the City of Wellston.

The Defendants' crimes caused delay and mistrust that will impact the LCRA's ability carry out its long-

term plan to attract investment, expand the City's and County's tax base, and create jobs in the City of

Wellston and surrounding areas.

The Defendants' scheme sought to remove benefits from the community and confer those to private

individuals in exchange for direct gain to the Defendants and others. Their illegal scheme has in fact

delayed, and will continue to hinder, development in communities with the most need. The human impact

and cost of this is virtually incalculable.

Sincerely,

The Board of Commissioners

of the Land Clearance for Redevelopment Authority of the County of St. Louis


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