AFTER COURT: Martha Shoffner leaves court with her lawyer Chuck Banks (coat on arm) and family members.

  • Brian Chilson
  • AFTER COURT: Martha Shoffner leaves court with her lawyer Chuck Banks (coat on arm) and family members.

Photo illustration/

  • Photo illustration/

The details of the federal charge against State Treasurer Martha Shoffner have been released in a criminal complaint from the FBI.

Here’s the document. And here’s U.S. Attorney Chris Thyer’s news release, which notes conviction could carry a maximum sentence of 20 years and a $250,000 fine. Details:


Shoffner was busted Saturday after receiving the latest in a series of $6,000 payments from a confidential source wired by the FBI (an unidentified securities dealer apparently given immunity from prosecution for cooperation). The source told the FBI he had paid Shoffner a total of $36,000 in six payments every six months, plus almost $5,000 in cash for a campaign event, in return for an increasing share of the state bond business.

Shoffner got several of the payments rolled up and sealed in a pie box. The money delivery brought to the minds of many the bribes paid to a corrupt warden in the movie “Shawshank Redemption.” A new $6,000 payment was delivered to Shoffner that way Saturday by the source, who recorded their conversation. FBI moved in and arrested her after the transfer, finding the $6,000, plus some $100 bills left over from an earlier payment. The investigation began in January 2012, based on a tip to the FBI from an office employee, months before trading activities came under scrutiny of the Legislative Joint Auditing Committee.


The FBI complaint says Shoffner admitted wrongdoing during the arrest and helped them find the money she’d received illicitly.

Shoffner, attired in a black pantsuit, gave only one-word responses to Magistrate David Young during her brief court appearance. She was released on her own recognizance, on condition of regular reports to the probation office and surrender of her passport. Her attorney, Chuck Banks, said he would enter a not-guilty plea for Shoffner, but said they would sit down and discuss future plans. Shoffner didn’t have an attorney until after her arrest, despite legislative probes and multiple reports about questionable office practices. The federal charge details her alleged illicit outreach for financial help from a source cooperating with the government last week.

Shoffner encountered reporters as she left the federal courthouse and departed in a pickup truck. Asked if she had anything to say to the people of Arkansas, she said she had no comment. Her attorney didn’t conmment either. Asked if she planned to resign, she said: “Not at this time.” If she were to resign, the governor would appoint a replacement to complete her term, which runs through 2014. The legislature, if in session, also could impeach her and remove her after a Senate trial.

Gov. Mike Beebe, like Shoffner, a Democrat, indicates he’ll have a statement at 2 p.m. on his thoughts on whether Shoffner should continue in office. I trust the answer is a ringing no. UPDATE: Yes, Beebe called for her immediate resignation. The Arkansas Republican Party has, naturally (and, yes, correctly), called for Shoffner’s resignation.


Attorney General Dustin McDaniel, like the Republican statement, made no presumption of guilt, but said the allegations were disturbing and “…. I believe that she should resign immediately to allow the work of the Treasurer’s Office to continue.” Will Bond, Democratic Party chair, said, ” While treasurer Shoffner has the right to be presumed innocent, Arkansas taxpayers have the right to have confidence that their money is being invested and managed properly. In order to restore public trust and to allow the Treasurer’s office to operate its duties, we ask treasurer Shoffner to resign immediately.” Democratic gubernatorial candidate Mike Ross said Shoffner had “broken the public trust” and should resign immediately. Democratic candidate Bill Halter said, “Restoration of the public trust can only begin with the appointment of a new treasurer.” U.S. Sen. Mark Pryor piled on. “Martha Shoffner should resign and be prosecuted to the full extent of the law. Arkansas deserves better.”

A comment from Heath Abshure, director of the state Securities Department:

Just read the Criminal Complaint. We will certainly be looking into whether the payments were made with the knowledge of a broker-dealer firm or whether the payments were being made by an agent without the knowledge of the firm.

The Arkansas Times published Oct. 20, 2011, the first account of a a heavy concentration of treasurer’s office business with Steele Stephens, a salesman with a small firm, St. Bernard Financial Services, based in Russellville. He and the firm have denied any wrongdoing in all public statements to date (including again today) and the confidential cooperating broker so far has not been identified. Also in reporting in October 2011, Stephens said he’d been just one of three sponsors of the 2010 campaign finance party mentioned in the charge. He never denied contributing to that. What appears to be amiss, according to the federal charge, is that Shoffner converted some of the money contributed to that event for her own use, not party expenses.

UPDATE: I spoke with Robert Keenan, chief executive of St. Bernard. He reiterates that he doesn’t believe the charge relates to Steele Stephens or his firm. “He assures me it wasn’t him and I believe him and trust him.” Keenan said Stephens was at work today and that they’d talked Saturday night after news of Shoffner’s arrest “shocked” them both. “We’ll find out eventually if he’s lying to me, but I don’t think so.”

Keenan said the identify of the person paying Shoffner ultimately should be revealed because, even if given immunity from federal prosecution, the person should lose his or her securities license. “If it was one of my employees, I’d let him go for not reporting it.” He added, “I can’t wait to find out who it is. we’re getting bombarded up here with people who thinks it’s us and not.”

Keenan said the timeline in the federal charge didn’t even match Stephens’ record with St. Bernard becaue he didn’t go to work there until late 2009 or so. He acknowledged that his firm had increased its share of state business substantially, but he continued to insist as he has all along it’s because of lower commissions and better service. He continues, too, to take sharp exception with Joint Audit’s evaluation of his own firm’s record on state business, scoffing particularly an auditor’s comment that investment firms should be better able to predict future interest rates.

LAWMEN: U.S. Attorneys Conner Eldridge and Chris Thyer said investigations continue in both the western and eastern districts of Arkansas on public corruption.

  • LAWMEN: U.S. Attorneys Conner Eldridge and Chris Thyer said investigations continue in both the western and eastern districts of Arkansas on public corruption.