The company at the heart of the federal indictment of former County Executive Steve Stenger has been portrayed by prosecutors as existing solely to obtain a sham marketing contract with the St. Louis County Port Authority as part of an alleged pay-to-play scheme.
The company, Cardinal Creative Consulting LLC, was created in 2015 by John Rallo, a businessman the indictment says had no prior marketing experience, and produced no actual work from the $130,000 Port Authority contract. And according to a search of Missouri public records, only one political campaign has hired Cardinal Creative during its four years in existence: the election committee for St. Louis Aldermanic President Lewis Reed.
From December 2016 to August 2017, the Committee to Elect Reed paid Cardinal Creative Consulting $17,800 over six payments, for printing, insurance, and campaign marketing and literature, the committee reported in Missouri Ethics Commission statements.
Reed, responding via text message, said his campaign came upon Cardinal Creative legitimately, only used the firm for one campaign to "print at least one targeted mailer and lapel stickers" and never hired it again.
He said the "work/product was received in a fair exchange (paid with campaign funds NOT public dollars)." The aldermanic president since 2007, Reed was running for mayor in 2016 and early 2017, ultimately losing a decisive March 2017 Democratic primary. He won re-election as aldermanic president in April 2019.
Reed said Cardinal Creative "cold called" his campaign seeking to bid on printing services. He said he doesn't know Rallo "well at all, but his company did offer a competitive price."
During the same period, Reed’s campaign also hired another firm for printing services, James Mulligan Printing Co., which received nearly $8,000 from January 2017 to March 2017, according to state records. Unlike Cardinal Creative, Mulligan, a downtown firm in business since 1865, also got printing work from other campaigns, including two in 2015 and six in 2016, according to the records.
Reed said his campaign didn't give Cardinal Creative Consulting all its printing work "because we needed to be sure they could perform."
He also said work produced by Cardinal Creative was subpar, only using a "truncated" version of his mailing list for a direct mailing, so he never hired the firm again.
The Reed committee’s treasurer, attorney Erin Zielinski, did not respond to requests for comment.
Cardinal Creative Consulting isn't a contributor to any of Reed's political campaigns, according to public records. But another company, Cardinal Insurance Group LLC, in June 2016 contributed $200 to the Reed committee, records show. Rallo was that firm's registered agent until 2012, according to state records.
Reed said he didn't recall the Cardinal Insurance contribution.
The indictment, unsealed Monday, said Rallo, a donor to Stenger's campaigns, in 2015 created Cardinal Creative "for the specific purpose of obtaining" a marketing contract with the St. Louis County Port Authority in which no actual work was done. At the direction of Stenger ally and ex-Economic Development Partnership CEO Sheila Sweeney, Cardinal Creative received the contract in July 2016, according to the indictment.
Attempts to reach Rallo were unsuccessful.
Cardinal Creative Consulting’s contract with the county Port Authority was for $100,000, according to prosecutors, and was “to purportedly provide marketing to address the negative publicity leftover from the Ferguson unrest following the shooting death of Michael Brown.” The indictment said Rallo was friends with television personality Montel Williams, and Stenger and Rallo discussed teaming with Williams on the contract.
The indictment said Sweeney bumped up the amount to $130,000 because Stenger wanted "JC," a close associate of a public official who had helped Stenger in the 2014 election, to be paid with the extra money. Rallo paid JC $25,000, not the $30,000 Sweeney had instructed Rallo to pay JC, according to the indictment. The St. Louis Post-Dispatch, based on anonymous sources, reported that JC is political operative John Cross, and that the public official is St. Louis-area Congressman Lacy Clay.
"Rallo and (Cardinal Creative Consulting) did no actual work for the" port authority contract, the indictment said.
Stenger resigned Monday and pleaded not guilty to three federal corruption charges. He's expected to plead guilty Friday. No other charges have been filed in the case.
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