Update: Martha Shoffner Withdraws Planned Guilty Plea

Update: In an unexpected move that "embarrassed" her attorney, former Arkansas Treasurer Martha Shoffner withdrew a planned guilty plea Friday afternoon because she said she didn't demand the bribes she admitted taking.

U.S. Attorney Chris Thyer told reporters after the aborted hearing that prosecutors would take the case to the grand jury, possibly next week. And he said prosecutors would seek "two or three" charges rather the single count of extortion to which Shoffner had initially agreed to plead guilty.

Shoffner, arrested 13 days ago at her Newport home, waived her right to an indictment by grand jury and admitted taking bribes of at least $36,000 from a bond broker who did business with the state. But under oath, she told U.S. District Judge Leon Holmes that, contrary to the charge read by Assistant U.S. Attorney Jana Harris, she did not "demand" the payoffs.

"Yes, but it was offered. I didn't demand it," she said.

When Holmes asked if she had, as alleged, directed business to the unidentified broker in exchange for the bribes, she said, "Not intentionally."

At that point, Holmes told Shoffner and her attorney, Chuck Banks, "I do not think we're 'there' on the elements" of the crime as alleged, and Banks agreed. Holmes said he could not accept a guilty plea from a defendant who disputed the facts alleged, and he gave Banks time to consult with Shoffner.

In about two minutes, Banks and Shoffner returned to the podium before Holmes, and Banks announced that his client wanted to be indicted and to stand trial. 

Holmes said he would have to consider what to do since Shoffner had already waived her right to a grand jury indictment. Then he quickly adjourned court.

'Obviously Wasn't Planned'

Banks then approached the federal prosecutors' table and told Harris that this "obviously wasn't planned." Later he told reporters that he was "very embarrassed" that the hearing didn't go as scheduled, but he said he was pleased with Holmes' handling of the events and that his client has the opportunity to continue exercising her constitutional rights.

Pat Harris, the First Assistant U.S. Attorney, said after the hearing that "it happens" that plea agreements sometimes fall apart. As for the waiver of indictment, he said, "It goes away."

Before allowing Shoffner to waive her right to have the accusations heard first by a grand jury, Holmes quizzed Banks as to whether he had any reason to think that his client was not competent to enter a plea. When Banks said he had no concerns, Holmes found Shoffner competent.

As is standard, Holmes explained to Shoffner her legal rights and the ramifications of giving up some of those rights by waiving indictment and pleading guilty. He asked if she understood that she could plead guilty or not guilty, and after a long pause, Shoffner replied, "Guilty." Holmes corrected her, saying that he had not yet asked for her plea but only whether she realized that she didn't have to plead guilty. She said she understood.

The Plea Agreement

The plea agreement as described in court by Assistant U.S. Attorney Jana Harris called for Shoffner to admit that she "corruptly solicited or demanded" approximately $36,000 in bribes -- six payments of $6,000 each -- between 2010 and 2012, and to agree to forfeit $4,020 in cash that was left over from the last bribe she received from the broker in 2012. The plea, then, would not cover the $6,000 in FBI funds she took from the same broker during a sting operation that led to her immediate arrest on May 18.

The charge under the plea agreement would have carried a maximum penalty of 10 years in prison and a $250,000 fine, but the guideline prison sentence under the terms of the agreement would probably not have exceeded 18 months.

The plea agreement also allowed Shoffner to petition for a more lenient sentence than the guidelines would suggest. Federal judges are not required to follow the sentencing guidelines.

Original story:

A felony plea hearing has been scheduled for 2 p.m. Friday in U.S. District Judge Leon Holmes' courtroom, and Arkansas Business has confirmed that the defendant who will waive indictment and plead guilty is former State Treasurer Martha Shoffner.

Shoffner was charged May 20 with extortion based on a criminal referral by an FBI agent involved in a sting involving a $6,000 bribe, but she has not been indicted by a federal grand jury.

Shoffner, 68, did not enter a plea at her May 20 hearing. At the time, her attorney, Chuck Banks of Little Rock, told reporters that Shoffner would enter a not guilty plea.

Waiving indictment and pleading guilty could reduce Shoffner's potential prison sentence, as federal sentencing guidelines provide for leniency for defendants who "accept responsibility."

FBI agents arrested Shoffner May 18 for violating the Hobbs Act, a federal law that is often cited in cases of official corruption, and the criminal complaint describes he offense as "extortion under color of official right."

The criminal complaint, a signed affidavit by FBI Special Agent Richard McLain, was released ahead of Shoffner's May 20 court appearance and alleges multiple payments to Shoffner by a broker who had done business with the Arkansas Treasurer's Office.

(View the Complaint: Click here to download a PDF of the complaint.)

The broker, identified in the complaint as "Confidential Human Source 1," has been working as a witness for the FBI and granted immunity from prosecution by the federal government. In all, the FBI said Shoffner took at least $36,000 from the broker.

On Wednesday, Gov. Mike Beebe appointed Charles Robinson, a former legislative auditor, to fill the remainder of Shoffner's term.