CLAYTON — Two former officers of the St. ÑÇÖÞÎÞÂë Economic Development Partnership accused of paying themselves over $200,000 in unauthorized bonuses countersued the taxpayer-funded organization Wednesday, demanding over $150,000 in retirement benefits they say are being held up and arguing the Partnership’s bylaws shield them from litigation.
Responding to a lawsuit the Partnership filed against them in December, former Partnership CEO Sheila Sweeney and former Chief Financial Officer Joyce Steiger say in court filings that an indemnification clause in the economic development agency’s bylaws protects them from legal actions related to their time there. Such clauses are common in the bylaws of nonprofit and governmental boards.
Sweeney, who pleaded guilty to misprision of a felony as part of the federal corruption investigation that sent former St. ÑÇÖÞÎÞÂë County Executive Steve Stenger to prison, also alleges that the Partnership’s actions have caused her “fear, anxiety, confusion, mental anguish, pain, suffering, and severe emotional distress.†She seeks in excess of $25,000 for what her countersuit says is the Partnership’s breach of her contract “vis-a-vis the By-Laws.â€
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Steiger says the Partnership first threatened legal action in February 2021 over the bonus payments and she has paid more than $15,000 in attorneys fees since then, which her countersuit seeks to recover.
Sweeney and Steiger also argue that the five-year statute of limitations has expired on some of the Partnership’s allegations and that no dates are specified in those allegations, making it impossible to know if the Partnership filed its lawsuit in time.
In addition, both Sweeney and Steiger say the Partnership has refused to pay them their retirement benefits. Sweeney says she is owed more than $120,000 in retirement funds. Steiger, in her countersuit, says she is owed in excess of $40,000 from a retirement plan and that the Partnership has declined to release the funds despite demands from Steiger since June 2019, shortly after she retired.
The bonus payments to Sweeney didn’t become public until Missouri Auditor Nicole Galloway’s office released a September 2020 audit of the organization. And, the audit for the first time implicated Steiger in misconduct at the Partnership, which Stenger used to award contracts to campaign donors and played a central role in the feds’ case against him.
The state audit found Sweeney had paid herself $160,000 in bonuses in 2016 and 2017. Steiger paid herself $65,000 in unauthorized bonuses during those years, and also “abused her position,†according to the audit report, by instructing her staff to add to her paid time off hours and then rolling over her unused hours, contrary to the Partnership’s policy. That resulted in her receiving an additional $38,000 in compensation when she retired in April 2019.
Sweeney and Steiger paid the bonuses to themselves — as well as $123,000 to other, unidentified employees at the Partnership — without board approval, according to the audit and the Partnership’s lawsuit. But Steiger refutes that, arguing in her response that certain board members “determined the amount of the bonuses to be paid to Sweeney, and the Board and or certain members thereof possessed actual and/or apparent authority to make those determinations.â€
Most of the board members have been replaced by St. ÑÇÖÞÎÞÂë County Executive Sam Page, who appoints 11 of the 15 board members. St. ÑÇÖÞÎÞÂë gets four appointments, and those members are also new since the corruption scandal.
The Partnership’s roughly $7.4 million budget gets about $4.2 million from the county and $1.1 million from the city.
Sweeney’s lawyer, Justin Gelfand, said in a statement that “we are confident in our position and look forward to litigating this case.â€
Steiger’s lawyer, Sanford Boxerman of Capes Sokol, declined to comment beyond the court filings. A Partnership spokeswoman declined to comment.
Post-Dispatch reporter Joel Currier contributed to this report.
Originally posted at 6:45 p.m. Thursday, Feb. 10.
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