09/29/2020
State Auditor Nicole Galloway today released the audit of St. Louis County government and the St. Louis Economic Development Partnership (SLEDP), an audit requested by the St. Louis County Council in 2019. The report finds former County Executive Steve Stenger and former SLEDP CEO Sheila Sweeney abused their positions as part of a pay-to-play scheme involving procurements and the awarding of contracts, and inadequate oversight by the County Council and the SLEDP Board enabled them to do so. Stenger, Sweeney and two others pleaded guilty to federal charges last year for their roles in the scheme.
"Steve Stenger used his position to his personal and political advantage and abused taxpayer dollars. That scheme rightly resulted in prison time and heavy fines for him, Sheila Sweeney and others," Auditor Galloway said. "My report shines a light on the lack of oversight that allowed that fraud to take place. The county must take action to ensure that the appropriate safeguards are in place for the future."
The audit found Stenger held several contracts that had been approved by the County Council for as long as eight months before signing them, meaning projects often were delayed and contractors and federal funding were lost. Stenger's actions served to unilaterally cancel contracts in some cases. The audit said significant weaknesses in the county charter and ordinances, as well as inadequate oversight from the County Council, enabled him to do this.
Stenger also gave himself more influence over county contract decisions by manipulating procurement procedures and processes. This included adding employees from his staff to committees that selected contractors to ensure certain contractors were selected, and by circumventing normal procedures for leasing county office space from developers who contributed to his political campaign.
The audit found that lack of adequate oversight by the County Council allowed Stenger to take actions that were not in the best interest of taxpayers. Because of the lack of due diligence, the audit said, the county has committed to a 20-year lease that is expected to cost $67 million over the lease term, the county exchanged property appraised for $1.3 million for property appraised for $560,000, the County's Executive's Office was able to shift almost $4 million in personnel costs to other departments, and the County Auditor position has been ineffective in providing oversight of county operations.
The audit also found that Stenger used his position to set the salary for Sweeney as CEO of the SLEDP at $260,000 annually, a level that was 45 percent higher than her predecessor. Sweeney then colluded with Stenger to assist certain contractors in winning SLEDP contracts, including one awarded to a Stenger contributor. Sweeney also oversaw the payment of $348,000 in unauthorized bonuses in 2016 and 2017 to herself and other SLEDP employees. The audit found the SLEDP Board provided insufficient oversight over Sweeney's activities, contributing to her ongoing abuse of her position as CEO.
The audit came after the County Council unanimously passed a resolution in May 2019 requesting Auditor Galloway perform a review of county operations. Under state law, the resolution was necessary before the State Auditor could conduct the audit. The complete audit of St. Louis County is available here.
