Martha Ann Shoffner
Update: Governor appoints treasurer. To see story, click HERE.Little Rock, Ark. — Arkansas State Treasurer Martha A. Shoffner, 68, Monday was charged by federal Complaint with attempt and conspiracy to commit extortion under color of official right, in violation of Title 18, United States Code, Section 1951(a), commonly known as the Hobbs Act.
Shoffner resigned from her state post late this afternoon.
Shoffner had been arrested at her home in Newport, Ark., on Saturday, and appeared Monday before U.S. Magistrate Judge H. David Young for an initial appearance on the federal Complaint.
According to the statement issued by the U.S. Attorney’s office, Shoffner allegedly “obtained cash payments, to which she was not entitled, from an individual, with the individual’s consent, knowing that the cash payments were made under color of official right, in return for official acts as Arkansas State Treasurer.”
To view the 8-page criminal complaint and affidavit, which details the FBI’s investigation which resulted in the charge, click HERE.
Key in the complaint was the report that since late 2009, Shoffner had received six $6,000 cash payments from a bond broker and that broker simultaneously was given significantly increased business from the state
According to the complaint, compiled by FBI Special Agent Richard McLain, the FBI investigation began in January 2012 when an employee of the State Treasurer’s Office reported to the FBI that Shoffner “was using one (bond) broker over others and was not following historical investment practices of the Treasurer’s Office.” According to the affidavit, the state’s $3.4 billion portfolio includes $1 billion to $1.5 billion in bonds and that historically the state had used 10 Arkansas brokers distributing its business on a relatively even basis. The employee told the FBI he/she noticed a major shift of the bond portfolio to one broker in mid-2011.
Later in 2012 a former employee of the State Treasurer’s Office told the FBI Shoffner began giving the favored broker more business at about the same time she was looking for a new place to live in Little Rock. She previously had been living rent free in Little Rock and did not want to commute from her Newport home.
The favored broker — who was contacted by the FBI in January and given federal immunity in return for cooperation in the investigation — previously had given Shoffner two cash campaign contributions, totaling $6,700. Subsequently Shoffner told the broker she needed $1,000 per month for rent at a new Little Rock residence. The broker preferred to make a $6,000 payment every six months.
The state treasurer’s annual salary is about $54,000 a year, according to the governor’s office.
In September 2012 Shoffner told the Arkansas Legislative Joint Auditing Committee she had not accepted anything from the aforementioned broker. Apparently no records of the cash payments were kept. She later told the broker she expected the payments to be kept up for the remaining two years of her term, through 2014. (With term limits, she could not seek a third term.)
The FBI planned for a “sting” to take place on Sept. 18. The broker was provided with technical surveillance equipment and the scheduled $6,000 cash. During the meeting in Newport the broker gave Shoffner $6,000 in a pie box. After the broker left, FBI agents executed a search warrant, and Shoffner told them where the cash was. She admitted to receiving multiple $6,000 payments from the broker and admitted she knew it was wrong to accept the payments.
She was arrested and taken to Pulaski County Jail in Little Rock.
Shoffner was officially informed of the charges against her during the brief hearing Monday. She was not required to enter a plea. Now, a federal grand jury will consider the case at a yet to be determined time.
After the hearing Shoffner was released from custody but was required to surrender her passport. She is being represented by former U.S. Attorney Chuck Banks of Little Rock. Reportedly Shoffner’s family contacted Banks Saturday night and he met with her Sunday. She was not known to have an attorney before that. Banks has said Shoffner would plead not guilty.
U.S. Attorney Christopher Thyer after the hearing told reporters that the decision to extend immunity to the informant was not an easy one, but it was made “out of necessity,” due to how limited the alleged conspiracy between Shoffner and the unnamed bond broker was. “If both of those two people remain silent, we wouldn’t be here today,” he said.
Thyer said the identity of the broker and others named in the complaint would eventually come out in court. He noted that the immunity granted to the informant does not cover potential prosecution on state charges.
Shoffner resigned from her state position, effective 5 p.m. Tuesday.
“I am proud to have been elected by and to have served the people of the state of Arkansas and regret that I can no longer perform the duties and responsibilities owed to the public,” Shoffner, a Democrat, wrote in a resignation letter to the governor. To view the letter, click HERE.
She had been reported as having said Monday afternoon that she would not resign.
After the hearing Monday Arkansas Gov. Mike Beebe and Arkansas Attorney General Dustin McDaniel, both Democrats, called for Shoffner’s resignation.
Beebe said, “I think Martha Shoffner should resign, and I think she should resign immediately. While everyone is presumed innocent until legal proceedings are complete, it would be very hard for the Treasurer’s Office to function properly under her continued leadership. When you are elected to any public office, your conduct is held to a higher level of expectations to avoid even the appearance of impropriety. These alleged actions are far worse than that.”
Under state law Beebe can name Shoffner’s replacement. According to the governor’s press aide, the governor hopes to make an appointment within the next several days. He wants to be efficient but not hasty with the decision, the aide said.
Update: The governor’s office announced that Gov. Beebe would name and introduce his choice for state treasurer Wednesday morning, May 29.
Under state law, whoever the governor appoints cannot run for election in 2014.
McDaniel Monday said, “Having reviewed the Criminal Complaint filed this morning, I am deeply disturbed about the allegations against State Treasurer Martha Shoffner. If proven to be true, these actions are a betrayal of her oath to our constitution and to our people.
“Although Ms. Shoffner is presumed innocent, I believe that she should resign immediately to allow the work of the Treasurer’s Office to continue.”
House Majority Leader Bruce Westerman, a Republican, earlier Tuesday asked Gov. Beebe to convene lawmakers to remove Shoffner. “Given the extreme lack of regard she has shown towards the law and, more importantly, the hardworking Arkansas taxpayers whose money she is responsible for, her continued service in the State Treasurer’s Office is now untenable,” Westerman said in a prepared statement.
The Justice Department statement issued Monday says, “The charges set forth in a Complaint are merely allegations. A federal Grand Jury will decide whether to indict on these charges. The defendant is presumed innocent until proven guilty.” Thyer had no official comment on the question of resignation.
If convicted, according to the Justice Department statement, Shoffner faces not more than 20 years in prison and up to a $250,000 fine, or both followed by not more than 3 years supervised release. Assistant U.S. Attorneys Jana Harris and Stephanie Mazzanti are prosecuting this case for the United States.
A real estate agent, Shoffner was elected to the Arkansas House of Representatives in 1996. She then was an unsuccessful candidate for Democratic nomination for the office of State Auditor. Then she was elected State Treasurer as a Democrat in 2006 and was re-elected in 2010.
The FBI Little Rock field office, Pulaski County Sheriff’s Department, Arkansas State Police, Little Rock Police Department and the U.S. Attorney for the Western District Monday announced the formation of the new ArkTrust Public Corruption Task Force. The multi-agency task force will accept and investigate confidential tips on public corruption at any level — local, state or federal — by any elected or appointed official in Arkansas. Tips can be submitted to the ArkTrust hotline at (501) 221-8200 or visit tips.fbi.gov.
— Howard Elliott
©2013 Hill ’n Holler Review
