Shoffner ad roils Hill, Hays race

Banker says dealings with ex-treasurer were aboveboard

Arkansas Democrat-Gazette/STATON BREIDENTHAL --12/19/12-- Patrick Hays will be leaving office, and taking all the memorabilia he has collected over the years, on Dec. 31 after 24 years as North Little Rock mayor.
Arkansas Democrat-Gazette/STATON BREIDENTHAL --12/19/12-- Patrick Hays will be leaving office, and taking all the memorabilia he has collected over the years, on Dec. 31 after 24 years as North Little Rock mayor.

Congressional candidates French Hill and Patrick Henry Hays and Hays' Democratic allies stepped up their criticism of each other Monday about Hays' television ad on former state Treasurer Martha Shoffner's investments in state bonds through Hill's bank and campaign contributions made by Hill and his bank to Shoffner.

Hays' ad, which started airing Thursday, led Hill on Friday to call Hays "a liar" and for Hays to take it down, and for Hays' campaign manager, David Furr, to call the ad "factual."

Deputy Legislative Auditor Jon Moore said Friday that auditors found no indication that the state treasurer's bond investments through Delta Trust & Bank were tied to campaign contributions by Hill and the bank.

Autumn Sanson, chief investment officer for the state treasurer's office, said the treasurer's office decided on investments in bonds based on competitive bids submitted by several bond brokers that Sanson called when Shoffner was the state's treasurer.

"There was only one circumstance [in which the office invested in bonds without taking the best rate submitted by bond brokers under Shoffner] and that was with St. Bernard Financial Services," Sanson said Monday.

She said the treasurer's office now seeks competitive bids from about 15 bond brokers before deciding which ones get the state's bond business.

Shoffner, a Democrat from Newport, was caught on camera accepting bribes from bond broker Steele Stephens, who worked for St. Bernard Financial Services. She resigned as the state's treasurer in May 2013.

During Shoffner's trial, Stephens testified that he secretly gave Shoffner $36,000 in cash over a 21/2-year period, during which time his employer's share of the state's bond business increased exponentially.

Hill is a Little Rock Republican and a banker. Hays is a Democrat and former North Little Rock mayor.

Along with Libertarian candidate Debbie Standiford of North Little Rock, they are vying to succeed Republican U.S. Rep. Tim Griffin of Little Rock in the Nov. 4 general election. Griffin, who represents the 2nd Congressional District, is running for lieutenant governor.

Hays' TV ad says Hill and his fellow bank executives donated thousands of dollars to Shoffner and "it paid off big time," and that Shoffner directed $700 million to Hill's bank.

Shoffner was convicted of 14 counts of bribery and extortion and forced to resign, but "French Hill's bank got to keep the money," according to Hays' ad.

Hays started airing the ad three days after Hill began airing an ad that calls Hays "a big government-career politician" who raised taxes to pay for his salary increases and traveled at taxpayer expense to help pass Democratic President Barack Obama's agenda. Hill's ad also said Hays falsely attacked him. Hays called the ad "a distortion."

Asked what money Hill's bank got to keep, Furr said Monday, "What we are talking about is the fact that $700 million was directed to his bank ... That's what the ad says.

"Who was in charge of that direction? Martha Shoffner. We know that she was corrupt," Furr said.

Asked if Hays is alleging that was done illegally, Furr said, "That claim was not made in the ad."

According to Hill, the treasurer's office invested money in bonds with the bank acting as a bond broker, and the bank "never received" $700 million from the state treasurer's office.

The flap about Hays' ad prompted the state Democratic Party, the Democratic Congressional Campaign Committee and Furr to issue similar statements Monday.

State Democratic Party spokesman Lizzy Price said, "This is a clear example of how French Hill used his political influence to help himself at the expense of hardworking Arkansans.

"Hill's investment in corrupt former Treasurer Shoffner paid off big time for him -- resulting in an 800-percent spike in the amount of taxpayer funds received by his bank in the year after Hill contributed to her political campaign," Price said in a written statement. The Democratic Congressional Campaign Committee issued a similar statement with a graphic.

Furr added in his own written statement that, "French Hill has failed to explain why his bank received an increase in state investments in the year following his contribution to Shoffner."

In response, Hill's campaign manager, Jack Sisson, said, "Months ago, [U.S. House Democratic leader] Nancy Pelosi and the liberal Washington establishment cooked-up a 'research book' full of absolute lies they thought could sway this election.

"Patrick Henry Hays is now repeating those lies," Sisson said in a written statement.

"The truth: Patrick Henry Hays is a 26-year, career politician who called President Obama his 'star quarterback' and takes his marching orders from Nancy Pelosi and Washington liberals -- not Arkansans," Sisson said.

According to the Legislative Audit Division, the state treasurer's office purchased more than $1.5 billion in bonds through Steele Stephens of Apple Tree and St. Bernard Financial Services from July 1, 2008, through March 31, 2012.

The office purchased more bonds each through Apple Tree and St. Bernard Financial Services, Morgan Keegan, Bank of Oklahoma Investments, Crews & Associates, First National Bankers Bank than it did through Delta Trust & Bank during this period.

Earlier this year, Hill's unsuccessful Republican opponents, Ann Clemmer of Benton and Conrad Reynolds of Conway, criticized Hill for contributing to Shoffner through himself and his bank in 2009 before the state treasurer's office invested millions of dollars through his bank.

At that time, Hill said he was "disgusted by [Shoffner's] performance and her abuse of the trust of the Arkansas people."

Banks for years have been a major source of campaign contributions for whoever the state treasurer has been.

Hill has said that he gave a $250 personal contribution to Shoffner at a bank fundraiser in 2009. The other $2,000 contributed to Shoffner in 2009 came through Delta Trust & Bank.

Hays' campaign has objected to Hill's ad in part because it says Hays increased his government salary more than 20 times and raised taxes to pay for it. According to Hays' campaign, the North Little Rock City Council votes on city officials' salaries, and Hays' salary of about $100,000 a year was similar to the salaries of mayors of Conway, Fayetteville, Jonesboro, Rogers and Springdale.

Nonetheless, Sisson on Monday defended the ad's assertion about Hays increasing his government salary more than 20 times.

"Patrick Henry Hays took 22 separate pay raises as Mayor and pushed through 20 tax increases to pay for it. There aren't enough Washington lies that can erase these stubborn facts -- Hays is a big government, career politician," Sisson said in a written statement.

Metro on 09/30/2014

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