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It was John Rallo, a businessman from a family with deep roots in local construction — and, it turned out, one of St. Louis County Executive Steve Stenger’s early campaign donors.

Joe Bannister, the Partnership’s former vice president for real estate, remembers Sweeney pulling him aside to let him know why Rallo was there. “John was a friend of the campaign, so you know, he’s going to do work,� he said Sweeney told him.

Rallo would later win a $130,000 marketing contract from the St. Louis County Port Authority, purchase 43 acres of land from a county development arm and procure a $489,000 commercial building loan from a Partnership office.

Neither Rallo nor Sweeney responded to requests for comment about Bannister’s account.

The apparent favorable treatment Rallo received was an early indication of how Sweeney would run the roughly $19 million a year city-county economic development agency.

Now, Sweeney’s run is said to be near an end, according to multiple sources. The Partnership Board recently held a closed meeting to discuss personnel matters and plans to hold another in several days. The St. Louis County Council is expected to ramp up its ongoing ethics investigation of the Partnership. Sweeney’s board released a statement saying it was “deeply concerned� about issues at the Partnership, and it sent a message to the county council saying it would take action “to ensure the long-term viability� of the organization.

Though Sweeney and board members declined to comment on her status, interviews with 12 former Partnership employees, most who spoke on the condition of anonymity for fear of harming their job prospects in St. Louis business circles, describe an office beset by low morale, high turnover, little communication, sparse job training and questionable hiring practices.

Former top-level employees say influence from Stenger’s office in decision-making was apparent, despite Stenger’s repeated claims that he holds little influence over the Partnership.

Sweeney’s hiring in 2015 to replace longtime Partnership CEO Denny Coleman raised eyebrows from the start. The Partnership board had paid a firm to conduct a national search to replace the retiring Coleman, who at one time had been chairman of the International Economic Development Council, the premier trade group for economic development professionals.

Sweeney, who received $500,000 in total compensation in the year ended Sept. 30, 2017, hadn’t managed a large organization. She owned a real estate company and had served as the longtime chairwoman of the county port authority, a Partnership-managed entity. For several years, the port authority had to spend most of its income, about $5 million in rent from the River City Casino, in the Lemay area — Stenger’s old district when he was a county councilman.

The Post-Dispatch has already reported on the Rallo deals and Sweeney’s apparent attempt to mislead the public about a proposed St. Louis Blues practice complex in a county park. The newspaper also found that a nonprofit reliant on port authority funding had hired Steven Wyatt Earp, the husband of a former Stenger staffer, despite his conviction for stealing from a campaign fund.

Text messages shared by Bannister, who was fired this year, show frequent involvement in the Partnership from Stenger’s top aides. Two of them, chief of policy Jeff Wagener and chief of staff Bill Miller, sit on the Partnership board.

“The direction that Sheila (Sweeney) would point us in, which was a combination of things from Jeff (Wagener) and Steve (Stenger), was just not very productive,� said Bannister, who worked closely with Sweeney until she fired him. “Almost every decision is run by the Ninth Floor.�

The Ninth Floor is Clayton parlance for the county executive’s office, which can appoint 11 of 15 seats on the Partnership board. The other four are appointed by the St. Louis mayor.

Though Stenger, a Democrat who was just re-elected, has said he is not involved in the Partnership’s day-to-day operations, a former employee, who spoke on condition of anonymity, said that “couldn’t be further from the truth.�

It’s normal for an economic development office to receive general guidance from the elected official above it, the former employee said. But Coleman, who led the Partnership and its predecessor for 25 years before retiring in August 2015 in Stenger’s first year in office, was “willing to push back� when elected officials went too far. That changed when Sweeney took over, said the person, who worked for both CEOs.

“The perception was there wasn’t a single substantive decision that wasn’t made by the county executive’s office,� the person said.

Texts to Stenger

In one documented instance, port authority meeting minutes indicate Stenger held up funding for Arch Grants, a startup support organization, in March 2015. A month later, after meeting with former Arch Grants Director Ginger Imster, “County Executive Stenger approved the additional funding� for Arch Grants, according to minutes. Imster is now a vice president at the Partnership.

Meeting minutes after 2015 do not seem to indicate involvement from Stenger in Partnership or port business, but Bannister and another employee who was hired during Sweeney’s tenure said that during meetings with her staff, Sweeney frequently texted Stenger or his aides to get approval on Partnership business.

“When you are texting on your phone and you say, ‘Well, Steve (Stenger) thinks we should do this, or Steve thinks we should do that,’ that should tell you who she’s texting with,� the former employee said.

In one meeting, Sweeney told staff that “we have to protect Steve because without Steve, we don’t have our jobs,� the person added.

Coleman, who has recently re-emerged from retirement to lead the County Council’s competing version of the port authority, said the county executive didn’t inject himself into the day-to-day operations of the Partnership in the six months he stayed on.

“Certainly not what I hear is the situation afterwards,� he said. “The biggest thing I would say is the difference in the tone. I had such good communications with (former county executives) H.C. Milford and Buzz Westfall and Charlie Dooley. There seemed to be a lot of suspicion that there were a bunch of Charlie’s people in the Partnership, and that’s not the way I think the professionals, including me, assumed their role to be.�

Stenger spokesman Cordell Whitlock said that it was “wholly appropriate� for the county executive to communicate regularly with an agency that receives $4 million annually from county taxpayers.

“Ultimately, though, Sheila Sweeney reports to the Partnership board, which has the final say on all of the agency’s key actions,� Whitlock said in a Dec. 21 statement responding to the Post-Dispatch’s findings. “The fact of the matter is that changes in leadership and culture of an organization are bound to make some people unhappy and lead to personnel changes. We are not going to comment on statements from disgruntled former employees.�

One of those former employees, Rick Palank, worked in finance at the Partnership and its predecessor, the St. Louis County Economic Council, for over 30 years. Palank recalls being told to stop advertising his office’s small business lending products in the St. Louis Business Journal after a story was published that Stenger didn’t like. The Partnership has since resumed buying tens of thousands of dollars worth of ads and services from the weekly paper.

In December 2016, Palank said he was told to leave his position leading the Partnership’s small-business lending arm. After watching the top leadership at the Partnership depart over the prior two years, he sort of expected it. He was ready to go.

“I didn’t care for management, what was going on,� said Palank, who leads Regional Growth Capital. “I didn’t like the way Stenger was basically running the Partnership.�

Asked about Sweeney, he replied: “Write this down: ‘puppet.’�

A new chief

After Coleman retired, Sweeney was hired as the interim CEO during the search, but she told the Post-Dispatch that she was not in the running for the permanent job. The Partnership had hired Chicago-based DHR International for $56,000 to conduct a national search.
Yet in early October, Sweeney was tapped as permanent CEO.

Two people familiar with the search process say only one candidate — Sweeney — was presented to the full board.

Coleman said he was asked not to be involved in the process to select his successor. But he knew people were interested in the job.

“My expectation and, in fact, some of the feedback I was getting and inquiries from different parts of the country about that job opening up, I would have anticipated that there could be very strong candidates who had significant experience in the day-to-day management of high-performing economic development organizations and I was surprised when none of those candidates actually emerged from the process,� he said.

Soon, other top leadership followed Coleman out the door. The churn of employees was constant. One former staff member said that in the Partnership’s online directory of 63 people, only 22 people were there four years ago.

Even before he retired, Coleman said he had to push back against hiring some people he didn’t think were qualified. He declined to name them because he didn’t want to “embarrass� anyone.

“There were some people that Mr. Stenger through his office wanted me to hire,� Coleman said. “There were a couple of them I just said no, especially not at that salary. There was a couple I did hire. I mean, every county executive has a couple of folks who they refer and they probably didn’t come through normal channels but as long as they are not in really high-level positions they are not going to hurt, and maybe they’ll work out. But there were some that were not appropriate.�

And despite its billing as a regional organization, ex-employees say St. Louis County was clearly the Partnership’s focus under Sweeney.

“The emphasis was 100 percent on county relations and Stenger relations,� one former employee said.

The successor to the former St. Louis County Economic Council, the Partnership still manages county development arms like the port authority and industrial development authority, just as the St. Louis Development Corp. manages those offices in the city. But for companies looking to relocate or expand in the region, the Partnership was supposed to be agnostic about promoting sites in the city or county.

Sweeney, however, “made it abundantly clear she would support the county over the city,� said one person familiar with management’s thinking.

“The intention was to change the opinion of the site selectors or the consultants working for those companies, change the opinion that the county was a better place to put their business in than the city,� the person said. SLDC Director Otis Williams “doesn’t know that she’s working against him.�

Williams, who is a city appointee on the Partnership board, declined to comment.

Private bathroom

When the terms of a cheap sublease for two floors of a Clayton high-rise lapsed, the Partnership kept the 22nd floor of 7733 Forsyth Boulevard at almost twice the price it had been paying.

Staff that didn’t fit in the single floor were moved to another building a block away. Sweeney stayed, where there’s a clear view all the way to the Arch downtown.

The Partnership had a $75,000 tenant improvement allowance under the new lease. Yet it overspent its allowance by about $50,000. A large chunk of that spending? A private bathroom for Sweeney down the hall from her office and accessible only via a keypad lock, according to Bannister and documents he provided.

There were management mishaps, too. In one, the Partnership discovered that employees had been paying premiums for a life insurance policy without coverage. Partnership spokeswoman Katy Jamboretz said the issue is almost resolved and employees are receiving refunds now.

In another incident, Vicki Jackson, a former site administrator for the Helix Center, was fired in December 2017 by a human resources employee for missing too much work after undergoing treatment for cancer.

“I was in St. Luke’s Hospital in a hospital room in my hospital gown,� Jackson said. “It’s not like I hadn’t called them and told them I had been transported to the hospital.�

Jackson, who worked at the Partnership for five years, filed a complaint with the Equal Employment Opportunity Commission. The Partnership paid $30,000 to settle her complaint without admitting any fault or liability.

“If the person at the top is not treating people with respect and communicating effectively, it trickles down,� said one former employee.

In a statement responding to the Post-Dispatch’s findings provided by Jamboretz, Partnership board chair Karlos Ramirez said the board is “deeply concerned about these issues.�

“We are taking these allegations very seriously, and are looking into each one,� the statement said. “It is important to base decisions on facts. If there are management or operational issues, we will take swift action. Each of us is a volunteer and committed to the mission of the St. Louis Economic Development Partnership, which is to attract and retain businesses in the St. Louis region. Our main goal is to support economic development in St. Louis in the most effective way possible, and we will continue that critical work.�

‘Pretty shaken up’

Bannister considered himself close to Sweeney before she fired him. He would pick her up for work and drive her to and from Partnership functions.

Hired at the Partnership in 2015, Bannister was the former chair of startup support organization the Missouri Technology Corp. under Gov. Jay Nixon and has spent his career in politics and real estate. After he was fired in late July, he worried the blame for some of the questionable Partnership deals would be pinned on him.

“My concern is the long term viability or sustainability of how the Partnership is structured,� he said. “If the county (council) pulls its funds and also pulls the port (authority) out of it, then you’ve got a failed organization.�

Though he’s not positive why he was fired — the Partnership says it does not comment on personnel matters — he does point to one big incident over the summer that he says seemed to change his relationship with Sweeney.

It started when Sweeney told him someone banged on the front door of her Ladue home early on June 25. Bannister provided text messages showing that, the next morning, Sweeney wrote “they were back this morning … I think they are in two black vehicles. One an SUV and one a car.�

Bannister said in an interview that he noticed the cars when he picked up Sweeney at home for a morning meeting in Clayton. They followed them into the county seat, he said.

The episode left Sweeney shaken, and had Stenger officials scrambling to find out who had been following them, according to Bannister’s texts and interviews.

A text from Wagener, the Stenger aide, asked for the license plate. Bannister said he gave the plate to Tom Malecek, an official in Stenger’s administration who had worked for the St. Louis Police Department.

When Bannister and Sweeney left a meeting that day, Malecek “walked up to us and said, ‘Here’s who was following you,’ and handed us a piece of paper and said they had made a traffic stop. And the whole thing just didn’t make any sense.�

Bannister said he was told Clayton police officers pulled over the car, and the plates came back to a telephone consulting company, JM Surveys, registered to a mailbox in Maryland Heights.

Clayton police said they had no record of a traffic stop matching Bannister’s description that day.

Bannister said Wagener asked him to meet Stenger, Malecek and Miller, the chief of staff, later at a restaurant in Clayton.

“And they asked me, ‘Is Sheila OK?’ ... I said she’s pretty shaken up, she wants to know who this was and she wants more information.�

“And Steve walked away. And … Malecek said, ‘Do you know who it was?’ And I said no, I don’t know who this company is. I have no clue who it is. They said, ‘Well, we’ll continue to figure out who it is, we’ll work through that. You just have to tell us how Sheila’s doing. Just call us every day, call us every morning, text us, let us know how she’s doing.’�

About four weeks later, council members Ernie Trakas and Sam Page said in comments during a council meeting that each had been told by sources that Sweeney had enlisted county police officers to check out a vehicle tailing her.

“When St. Louis County police stopped the subject vehicle, they were advised that the occupants were, in fact, federal agents,� Trakas said. Page said he had heard the same thing. Neither would reveal their sources. Trakas said his source was “impeccable.�

This month, Trakas was sticking to his story and still would not reveal his source.