Update: Complaint Says Martha Shoffner Accepted $6,000 Payment from Broker

by Gwen Moritz and Lance Turner  on Monday, May. 20, 2013 1:04 pm  

Martha Shoffner, in this file photo from December. (Photo by AP Photo/Danny Johnston)

The complaint says the broker had been paying Shoffner in exchange for Shoffner directing state business to the broker's firm.

"CHS1 assumed that his/her existing bond business was secure when he/she began paying Shoffner, but acknowledged that at the time he/she began making payments, his/her bond business increased in value substantially," the complaint says. "CHS1 recognized his/her bond business with the state grew because of the payments he/she made to Shoffner."

In the fall of 2009, Shoffner allegedly began asking the broker for larger gifts, including the purchase of a Little Rock home, which the broker declined to do. She then asked for $1,000 a month so she could rent a residence in Little Rock.

Ultimately, the broker began making a series of cash payments to Shoffner, often hidden in "a pie box purchased from a Little Rock business," the document alleges. The complaint says the broker would make a payment of $6,000 in cash to Shoffner every six months, mostly in $100 bills.

In all, the broker says he or she made at least $36,000 in payments to Shoffner. Payments were made at the state Capitol, Shoffner's Newport home and Shoffner's Little Rock apartment, the complaint says.

On Saturday, the broker, working for the FBI, arranged to meet Shoffner at her Newport home. According to the complaint, the broker was "provided technical surveillance equipment" and given "$6,000 cash in FBI official government funds." The cash was concealed in a pie box and the broker delivered it to her home.

After the broker left the house, FBI agents executed a search warrant and recovered the payment, which Shoffner had moved to a cigarette pack in her kitchen. The complaint says Shoffner told agents where she had moved the money.

Thyer explained in the press conference that Shoffner was immediately arrested on a criminal complaint, rather than waiting for a grand jury to issue an indictment, because the FBI didn't want leave its $6,000 in her possession. The alleged payoff on Saturday was the first by the broker since the grant of immunity in January.

Steve and Steele Stephens

As Arkansas Business has reported, the FBI had been investigating Shoffner for more than year, interviewing sources about her handling of campaign contributions and the operations of the state treasurer's office.

In Monday's complaint, the FBI confirmed that its investigation began in January 2012, after a cooperating source in the treasurer's office told investigators that Shoffner "was using one broker over others and was not following historical investment practices ..."

In December, the state Legislative Joint Auditing Committee voted to refer an audit of her office to state and federal authorities. Legislators questioned how Shoffner's office handled the state's billion-bond portfolio after finding that the office conducted an inordinate amount of business with two bond traders, Steve Stephens and his son, Steele.



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