Posted 3/7/2014 11:33 am
Updated 5 months ago
LITTLE ROCK — A bond broker who managed a large share of Arkansas' investments said in federal court Friday he felt bad for the former state treasurer when she was going through a rough patch and gave her money to help her with her troubles.
Martha Shoffner, 69, is named in 14 counts alleging bribery and extortion. Prosecutors allege she directed a significant amount of the state's business to broker Steele Stephens in return for $36,000.
In testimony Friday, Stephens said Shoffner had a number of problems that both engendered his sympathy and prompted a monetary gift he delivered at Shoffner's Capitol office. Her mother had died, and she had to mortgage her house, give up her state car and move out of her Little Rock apartment, he said.
"I just felt sorry for her and thought I would help her," Stephens said. "I figured it would probably increase the possibility I would be treated favorably."
Witnesses who testified Thursday said Stephens managed a larger share of the state's investments than other brokers. Stephens is not affiliated with the Stephens Inc. investment house in Little Rock.
At times, Stephens answered questions reluctantly, particularly about his motivation, though prosecutors have granted the broker immunity.
Under questioning by Assistant U.S. Attorney Charles Ray White, Stephens said he gave Shoffner his first of six $6,000 payments as they sat alone in a conference room at her state Capitol office.
"Then I gave her a roll of $100 bills," Stephens said. "Shoffner looked up and said, 'I hope there's no cameras in here.'"
He said Shoffner got up and put the money in her purse.
Shoffner resigned last May after the FBI arrested her at her Newport home — prosecutors say she had just accepted another $6,000 payment from Stephens, delivered in a pie box (with a pie).
Prosecutors displayed photos of the Newport house Friday, including one depicting a plain white pie box sitting on Shoffner's green kitchen counter.
Asked where he placed the money, Stephens noted the box was square, the pie was round and there was room for a roll of $100 bills in a corner.
In earlier testimony, employees from the treasurer's office explained that Shoffner gave Stephens an advantage by allowing only him access to a list of holdings among brokers approved to deal with the state.
"I would meet her at her apartment at Rainwater Flats at night," Stephens said, adding they'd sit on a bench outside, smoke cigarettes and talk. At the end of the meeting, Shoffner would give him the list.
Stephens discussed Friday making $100 million trades, buying bonds for the treasurer's office. No other broker made state trades that large and Stephens said he broke them into $50 million trades in hope of sneaking the sums past state auditors.
"A $100 million trade — it would jump out of the page at you," Stephens said.
In testimony Thursday, her former employees complained that state profits were reduced by $434,000 after Shoffner approved trades that involved selling bonds before they matured.
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