FEDERAL INVESTIGATORS ARE MAKING INQUIRIES into the activities of the office of St. Louis Treasurer Tishaura Jones, including contracts Jones’s office has signed with external vendors, McPherson has learned.
Two people familiar with the situation, each of whom spoke to McPherson on condition of anonymity, said an agent with the Federal Bureau of Investigation has contacted them in recent weeks seeking information. One topic of interest to the FBI is a three-year, $7 million contract Jones signed in April with her friend and campaign donor Shelia Hudson for Hudson’s company to manage the city’s parking meters, these people said.
It’s not clear how advanced the investigation is, how wide its scope is, or how many potential witnesses the investigators have contacted. McPherson has learned, however, that Assistant U.S. Attorney Hal Goldsmith is involved in the probe. Goldsmith oversees public corruption cases in the office of Jeff Jensen, U.S. Attorney for the Eastern District of Missouri.
One person with extensive knowledge of the federal prosecution system told McPherson the fact that Goldsmith is involved indicates the U.S. Attorney’s team is treating the matter seriously. “This is what Hal Goldsmith does for a living,” said the person, who is not involved in the matter.
Last year Goldsmith handled a case which resulted in the indictment of St. Louis County Executive Steve Stenger on federal corruption charges involving public contracts Stenger steered to a donor in exchange for campaign contributions. Stenger, who pleaded guilty in the “pay to play” scheme, was later sentenced to jail time.
(source: treasurer’s website)
Jones, 48, has not been accused of wrongdoing, and there is no indication the inquiries by the U.S. Attorney’s office will lead to formal legal action against her or any members of her staff.
Still, the fact that federal investigators are asking questions is a major challenge for Jones, who won a third term as treasurer in November and is running to be the city’s next mayor. Jones is widely seen as a leading contender in a March primary that will also include Board of Aldermen President Lewis Reed and 20th Ward Alderwoman Cara Spencer.
Rebecca Wu, a spokeswoman for the FBI, said the bureau’s standard policy is to neither confirm nor deny the existence of an investigation.
Later Friday, after McPherson’s story was published, Wu issued an additional statement from the FBI.
“The Federal Bureau of Investigation is aware of media reporting that the FBI is investigating certain allegations,” the statement said.
“In response, the FBI notes that it routinely intakes complaints from members of the public as a matter of course,” the statement continued. “However, the FBI’s intake of such information does not mean that there is or will be any federal investigation or action based upon such information.”
Jared Boyd, Jones’s chief of staff, said the following in an e-mail responding to McPherson’s inquiry: “We are unaware of any federal investigations related [to] the Treasurer’s Office. To my knowledge, no Treasurer’s Office employee or agent has been contacted by federal investigators related to contracting or any other matter.”
Before McPherson published this story Boyd also threatened possible legal action against the website, saying the treasurer’s office “will pursue legal remedies if necessary.”
In September, after McPherson began reporting on the Hudson contract, Jones called McPherson’s reporting “conspiracy theories” in an interview on KMOX-AM.
McPherson published its most recent story involving the contract in November. That story laid out six questions surrounding the deal.
Cheryl Walker, a lawyer for Hudson, did not respond on Friday to requests for comment.
The Galloway audit
One of the people contacted by the FBI told McPherson the agent also expressed interest in a recent audit of Jones’s office by Missouri Auditor Nicole Galloway. That audit, released in September, found fault with Jones’s office over some of its procedures involving procurement and documentation of contracts.
Despite these shortcomings, Galloway’s office still awarded Jones’s office an overall performance rating of “Good.”
It’s not clear how Galloway’s audit might figure into the FBI’s investigation. The scope of the audit included the financial year ended June 30, 2019. The Hudson contract was not signed until the next financial year, so the audit does not address it.
Galloway, the only Democrat holding statewide elected office in Missouri, ran unsuccessfully for governor last month against Republican incumbent Mike Parson.
Galloway is releasing audits of each city department on a rolling basis, as part of a comprehensive audit of city government that the Board of Aldermen requested in 2018.
Galloway released her audit of Jones’s office on Sept. 30. A week later she and Jones hit the campaign trail together in St. Louis – a step which raised eyebrows among some political insiders, given that the credibility of the auditor’s reports relies heavily on the auditor’s standing as an impartial state officeholder.
A spokeswoman for Galloway did not respond Friday to McPherson’s requests for comment.
Lingering questions about Hudson
As treasurer, Jones also acts as the city’s supervisor of parking due to a quirk in the structure of city government.
The contract that Jones signed with Shelia Hudson’s company, Hudson & Associates, has come under significant public scrutiny since April.
Some city aldermen have questioned the validity of the contract, as well as why Jones paid Hudson for several weeks in the spring, when meter enforcement was suspended due to the COVID-19 pandemic. In June the Board of Aldermen voted to give its streets committee subpoena power to investigate. So far, the committee has not exercised that power.
The St. Louis Post-Dispatch reported earlier this year that Hudson and her company have donated more than $38,000 to Jones’s campaigns.
The person with knowledge of the federal justice system noted that with respect to probes involving campaign finance and public contracts in general, investigators can only build a credible case if they establish that there has been an explicit agreement for a quid pro quo. This does not have to be a verbal agreement, but it must be clear that that any contract or other benefit the donor receives is linked specifically to a campaign contribution.
The person added that federal officials also try to adhere to the principle that their investigations should not interfere with the outcome of an election.
In the mayor’s race, Jones is scheduled to open a new campaign office on Saturday at 6780 Southwest Ave. The mayoral primary will be held on March 2, with the general election following on April 6. Under a new system approved by city voters last month, the top two finishers in the non-partisan primary will face each other in the general election.
Jones’s current term as treasurer lasts until the end of the year. Her third term would run through the end of 2024.
Jensen, the U.S. Attorney, said on Thursday he plans to step down on Dec. 30 in order to return to private law practice. He was appointed by President Donald Trump in 2017. –McP–
[Like this story? Be notified by e-mail every time McPherson publishes a new item by dropping a note to Editor Jack Grone at jgrone@mcphersonpublishing.com. There is no charge for McPherson’s content, and I will not sell or share your contact information.]
