A criminal complaint against Arkansas Treasurer Martha Shoffner released Monday alleges that Shoffner received multiple $6,000 cash payments in return for her throwing bond business to a Russellville firm.
A criminal complaint charging her under the Hobbs Act, or "extortion under the color of official right," from late 2009 through May, was released ahead of her appearance Monday before U.S. Magistrate Judge H. David Young.
The complaint alleges that in mid-2011 a major shift in the allocation of the state's $1.5 billion bond portfolio occurred. The largest portion of the state's bonds were purchased through a single firm, St. Bernard Financial Services Inc. of Russellville, the complaint states.
Shoffner, 68, admitted to receiving $6,000 cash payments every six months and that she "admitted she knew it was wrong to accept the payments," according to the complaint.
Authorities released Shoffner on her own recognizance Monday after her appearance in federal court. Assistant U.S. Attorney Jana Harris said she had no problem with Shoffner's release.
Shoffner rarely spoke during her 10-minute court appearance, answering only "yes" when asked whether she understood the terms of her release. She was ordered to surrender her passport, the Associated Press reports.
When asked upon leaving the courthouse whether she would resign, Shoffner said, "Not at this time."
When asked whether he would advise her to resign, Shoffner's attorney, Chuck Banks of Little Rock, said, "Probably so, probably so. But that's not my call to make."
She had begun asking for payments to help finance a Little Rock apartment, the complaint says.
The complaint states that Shoffner received some payments concealed in a pie box, rolled up with a pie bought from a Little Rock business.
The Democrat, who has been treasurer since 2007, has been under scrutiny over the past year about the way her office has handled state investments and whether she received any benefit from the office’s purchase of more than $500 million in bonds through St. Bernard.
She also has faced questions about past campaign contributions. The complaint states that the broker gave her a $2,000 cash payment and a campaign watch-party sponsorship in the form of about $4,700 in cash.
Attorney General Dustin McDaniel and state GOP Chairman Doyle Webb said Monday that Shoffner, a Democrat, ought to resign immediately.
Reports that the FBI was investigating Shoffner had circulated at the state Capitol for months, especially after a legislative committee in January referred an audit done on her office to state and federal law-enforcement officials.
The audit concluded that the state treasurer’s office’s decision to sell some bonds before they reached maturity had cost the state about $434,000.
Shoffner said earlier she did not know why her office sold the bonds prematurely and bought more from the same firm.
If convicted, Shoffner faces up to 20 years in prison and up to a $250,000 fine, the U.S. attorney for the Eastern District of Arkansas said in a statement.
We will continue to update this developing story. Read tomorrow's Arkansas Democrat-Gazette for full details.
