Updated at 1 p.m. with comments from the sentencing.
An insurance executive who donated thousands of dollars to then-St. Louis County Executive Steve Stenger in exchange for county contracts was sentenced to 17 months in prison for his role in the pay-to-play scheme.
The sentence handed down Thursday to John Rallo, the president of Cardinal Insurance and Cardinal Creative Consulting, is slightly below federal guidelines of 21 to 27 months for the crime. U.S. District Judge Richard Webber also ordered Rallo to pay $130,000 in restitution to the St. Louis Economic Development Partnership and spend two years on supervised probation when he is released.
Before he issued his sentence, Webber said Rallo intentionally pushed himself into a scheme with Stenger to benefit his companies. Webber also said he had to issue a fair sentence to deter others from engaging in similar conduct.
Rallo admitted last July that he donated to Stenger with the expectation of getting business for his companies. In exchange for the campaign contributions, Stenger and Sheila Sweeney, then head of the St. Louis Economic Development Partnership, made sure that Rallo got a consulting contract for $130,000 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 benefits, though that deal never materialized.
Rallo did not comment to reporters after sentencing. Before Webber sentenced him, Rallo told the court his “code of conduct was unbecoming to say the least.”
“I offer you my humble and heartfelt apology,” Rallo said.
Sweeney was ousted from the development agency in January 2019, 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.
The prison time for Rallo is in line with the punishment given to Bill Miller, Stenger’s former chief of staff, who got 15 months. He is in prison in Kentucky and scheduled to be released Nov. 28. Stenger received a sentence of nearly four years but is now scheduled to be released Dec. 27, 2021. His attorney, Scott Rosenblum, told the St. Louis Post-Dispatch that prison officials allowed Stenger to enroll in a treatment program for substance use disorder, which can shave up to a year off a defendant’s sentence.
Sweeney was placed on probation. All four pleaded guilty.
Hal Goldsmith, who handled Rallo’s case for the U.S. Attorney’s office, didn’t comment after the sentencing. A spokesperson for the U.S. Attorney’s office would not comment on whether the investigation around Stenger’s misdeeds is ongoing.
Rallo asked for probation
Goldsmith said in court that Rallo’s actions by any standard were serious and contributed to the decline in trust of St. Louis County government.
Out of the people involved in Stenger’s pay-to-play scheme, Goldsmith said Rallo was the second most culpable.
“This defendant was the quid, and Stenger was the quo,” Goldsmith said.
Rallo’s attorney John Rogers had asked Webber for probation and, possibly, home confinement instead of prison. Rogers mentioned that Rallo had thyroid cancer, and that his health should be taken into consideration while sentencing.
While Rogers said Rallo’s conduct was not to be admired, “he had lived a remarkably admirable life.” He pointed to many letters of support for Rallo, with his friends and loved ones calling him a dedicated family man who is respected as a businessman and entrepreneur.
“John’s conduct has been criminal, but his life has been remarkable,” Rogers said.
Many of the court documents filed by Rallo’s attorneys in the run-up to Thursday’s hearing were filed under seal, meaning they were not publicly accessible. But in those that were, Rallo’s attorneys attempted to downplay their client’s culpability in the scandal.
In one, the defense lawyers inform Webber they will be asking for a sentence below the federal guidelines.In another, attorneys for Rallo object to the fact that the government determined that Rallo was more responsible for the scheme than Miller, who they say acted as Stenger’s right-hand man “as a licensed attorney, former administrative law judge and a salaried government employee. None of those considerations is present with respect to defendant Rallo.”
Federal prosecutors did not ask for a specific sentence but urged Webber to consider the “more than one million residents of St. Louis County who had their trust in county government and its officials shattered by this illegal pay-to-play scheme.”
Reporter Jason Rosenbaum contributed to this story.
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