Reed wants city out of development pact with county

CITY HALL — The scandal around the resignation and guilty plea of Steve Stenger as St. Louis County executive last week spilled over into city politics.

St. Louis Board of Alderman President Lewis Reed put out a news release on May 2, saying the city should void its Intergovernmental Cooperation Agreement originally formed with St. Louis Economic Development Partnership.

In an interview following the May 3 St. Louis Board of Aldermen meeting, Reed mentioned problems the Stenger connection might bring. But he also complained the city isn’t getting enough representation on the partnership board and that it’s not steering enough business to the city. 

“In light of some of the latest charges and things that happened with the indictment, it is clear to me that we need to take a look at transparency issues within the organization,” Reed said.

Reed said that a split is especially important because of contracts mentioned in the indictment issued by the partnership. “The City cannot continue to remain in this agreement in good faith. We need to protect our investments and taxpayer dollars. I urge the City to take these matters seriously,” he said.

Stenger pleaded guilty to three counts of theft of honest services bribery/mail fraud on May 3 in U.S. Court for the Eastern District Missouri for steering contracts to a contributor, John Rallo, from the St. Louis County Port Authority and the St. Louis Economic Development Partnership. 

Sheila Sweeney was the chief executive officer of the economic development partnership and the executive director of the port authority.

Among the other things mentioned in a grand jury indictment is an effort by Stenger to get a contract for one of Rallo’s companies to sell county employees voluntary benefit insurance.

Checks and balances are important to ensure that money can’t be added to a contract, Reed said. “I think we’d be better off taking the millions of dollars that we spend over there and spend them at home,” Reed said. 

“We have a lot of development issues across our city, and it is absolutely critical that we spend those millions for the taxpayers of the city.”

The city and county still can work together on various issues, Reed said. Meanwhile, there should be conversations with city leaders and new County Executive Sam Page, he said. 

Reed also complained that the city has only four out of 13 votes on the partnership and that the city doesn’t get enough contracts. 

“If we’re not getting a seat at that table, then why are we at that table?” he asked.

The indictment said that Rallo and Stenger first met shortly before Stenger was elected in 2014. In return for an initial $5,000 donation, Stenger promised to help Rallo get insurance business from the county. According to the indictment, Stenger got the economic development board to give a company Rallo owned contracts for about $525,000 for two properties in Wellston. He also got the port authority board to give a media consulting company Rallo owned, Cardinal Creative Consulting, a $100,000 contract. That amount was raised by $30,000 without going back to the port authority board. Out of that, $25,000 went to a political consultant as payback for supporting Stenger’s election, according to the indictment.

As it happens, Reed’s campaign committee also did business with Cardinal Creative Consulting.  Campaign finance reports filed with the Missouri Ethics Commission in 2017 show that the Committee to Elect Reed spent at least $17,800 with Cardinal Creative in his unsuccessful bid for mayor.

But Reed said any suggestion that he did anything improper was  “ridiculous.”

Reed said his campaign paid the firm to produce a flawed mailer. It contained a picture that mistakenly included a picture of Toronto’s City Hall on fire.

“We used them that one time for that one mailer,” he said. “My campaign was paying them. They weren’t give me anything to incent me to do anything.”

Efforts to reach spokespersons for Mayor Lyda Krewson and Page for comment were unsuccessful.

Jim Merkel

Author: Jim Merkel

Born and raised in St. Louis, Jim Merkel covered communities throughout the area from 1991 to 2013 for the old Suburban Journals of Greater St. Louis. He is the author of four books about the Gateway City published by Reedy Press. He and his wife, Lorraine, live in the Bevo Mill neighborhood of south St. Louis. For more about Jim, visit www.jimmerkelthewriter.com.

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