Ark. treasurer accused of taking cash from broker

Published on NewsOK Modified: May 20, 2013 at 10:52 pm •  Published: May 20, 2013
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LITTLE ROCK, Ark. (AP) — Arkansas' state treasurer was accused Monday of taking at least $36,000 in cash — sometimes stashed in a pie box — from a broker who later came to manage a large share of the state's $3.3 billion investment portfolio.

Democrat Martha Shoffner, who made her initial court appearance Monday, said she had no plans to resign despite members of her own party joining Republican calls for her to step down. She was released on her own recognizance but ordered to surrender her passport.

Federal prosecutors allege Shoffner accepted $12,000 a year from a broker who would sometimes deliver cash in a pie box, with the pie included. They said the broker is cooperating with investigators.

"The allegations against Ms. Shoffner are serious and they completely erode the public trust that we put in our elected officials, if they prove to be true," U.S. Attorney Chris Thyer said at a news conference.

Outside the courthouse, Shoffner, 68, said she does not intend to resign. She was re-elected in 2010, and has faced inquiries over the past year about the way her office has handled state investments.

She didn't enter a plea Monday, but her attorney, Chuck Banks, said she'd plead not guilty at the appropriate time. A federal grand jury will decide whether to indict Shoffner, who is charged with attempt and conspiracy to commit extortion under color of official right.

The charges carry maximum penalties of 20 years in prison and up to a $250,000 fine. A next court date was not set.

Shoffner was arrested during a sting operation Saturday and spent the weekend in Pulaski County Jail.

"This has been a very, very tough proceeding for her and a tough weekend," Banks said.

An FBI affidavit filed in federal court alleges that a broker — unidentified in court documents — would roll up cash in $6,000 increments and have it delivered to Shoffner's office every six months. At least two of the payments were delivered in a pie box with a pie. The broker "recognized his/her bond business with the state grew because of the payments," the affidavit said.

The payments were made after Shoffner asked the broker for $1,000 a month to pay her rent in Little Rock, according to the affidavit. The document said the broker was granted immunity in exchange for his or her cooperation.

Legislative auditors last year questioned Shoffner's selling of bonds before they matured, a practice that they said cost the state more than $434,000 worth of earnings.

The state's top elected officials, including Gov. Mike Beebe, Attorney General Dustin McDaniel and U.S. Sen. Mark Pryor, called for Shoffner to resign.

"I think she should resign immediately," said Beebe, adding that the details provided by prosecutors are so specific that Shoffner has been rendered unable to lead.

"It would be very hard, in my opinion, for that office to properly function under her continued leadership," the Democrat added.

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