A criminal complaint filed today against Arkansas State Treasurer Martha Shoffner details the federal case against her, which includes accepting payments in a pie box from a political supporter. The details emerged on the same day that a slew of Arkansas politicians called on her resignation.
Shoffner has said she will not resign.
The complaint, filed Monday by the Federal Bureau of Investigation, said Shoffner showed favoritism to a particular bond broker and had accepted kickbacks for doing business with that broker, only identified in the criminal complaint as "CHS1," or a confidential human source. (Link here for a PDF copy of the complaint.)
Another broker, identified as "CHS2," noticed a "major shift in the allocation of the bond portfolio to one broker (CHS1)" in mid-2011.
According to the complaint, "CHS2" confronted Shoffner about the alleged preferential treatment of one broker over others. When confronted, Shoffner responded, "they've (the other brokers) done nothing for me." The complaint says "CHS1" was also confronted and responded, "I have been very good to Martha."
In interviews with the FBI, "CHS1" confirmed that he or she had given campaign contributions to Shoffner, one cash payment of $2,000 at a campaign event in Little Rock while another was a "campaign watch party sponsorship in the amount of approximately $4,700 in cash," meant to cover party-related expenses.
The same informant also told the FBI that Shoffner had asked for large gifts around the fall of 2009. Also during this time, she asked "CHS1" to purchase property for her in Little Rock, though the informant did not do so because "Shoffner would be living on the property and his/her name would be on the paperwork for the purchase of the property."
Instead, Shoffner requested $1,000 per month payment to cover her rent for an apartment in Little Rock. The informant told the FBI that he or she did not think it would be a good idea to meet with Shoffner on a monthly basis because it would look "suspicious" and instead recommended meeting every six months, which would last through Shoffner's term in office.
The informant claimed to have made two payments to Shoffner at the State Capitol building, two at her residence in Newport and two at her apartment in Little Rock, with the most recent payment taking place in December 2012.
"CHS1 stated he/she paid Shoffner approximately six cash payments of $6,000 in addition to the cash paid for the watch party," the complaint said.
In 2012, the informant began placing rolled up payments "with a pie inside of a pie box purchased from a Little Rock business to conceal the payment being delivered to Shoffner. This method of concealing payment was done the last two times Shoffner was paid and both of those payments were at Shoffner's residence in Newport, Arkansas."
After the $6,000 payments every six months to Shoffner began, the complaint states that the State's bond business to the informant increased.
"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 read. "CHS1 recognized his/her bond business with the State grew because of the payments he/she made to Shoffner."
The complaint details how agents were able to catch Shoffner in the act of accepting payments from "CHS1."
"On May 18, 2013, CHS1 met Shoffner at her house in Newport, Arkansas. Prior to the meeting, CHS1 was provided technical surveillance equipment to record the meeting. CHS1 was also provided with $6,000 cash in FBI official government funds. The cash was rolled up and placed into a pie box. During the meeting between CHS1 and Shoffner, CHS1 gave the pie box containing the $6,000 cash to Shoffner. After CHS1 left SHoffner's house, Special Agents with the FBI executed a search warrant at Shoffner's house. The $6,000 was located in a cigarette pack in Shoffner's kitchen. Shoffner advised Special Agents of the FBI where she placed the $6,000.
"Shoffner was interviewed and admitted to receiving multiple $6,000 cash payments from CHS1. Shoffner still had some of the cash from the last $6,000 payment that CHS1 made and she provided that to the agents. Shoffner admitted she knew it was wrong to accept the payments."
Following the release of the criminal complaint, both sides of the political spectrum have come out against Shoffner.
Will Bond is chairman the Democratic Party of Arkansas, of which Shoffner is a member. And he did not hold back in a statement released this afternoon.
"We have reviewed the criminal complaint just released regarding the alleged acts of state treasurer Martha Shoffner, and we are shocked and disturbed by the allegations. 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."
Chairman Doyle Webb of the Republican Party of Arkansas urged Shoffner to resign, saying "the wrongful acts that are alleged are very serious in nature and are directly related to her official duties as State Treasurer. The incompetence that has been uncovered, the criminal charges that are pending, and the distraction from her office that due process will involve make her unfit to continue in her service as State Treasurer."
Former U.S. Rep. Mike Ross, a Democratic candidate for governor, also called for Shoffner's immediate resignation.
"Our elected officials must be held to the highest possible standard, and they must have the people’s absolute trust and confidence in order to effectively do their jobs. It has become clear that Martha Shoffner’s arrest and legal problems have broken the public's trust. I believe it is in the best interest of the Treasurer's Office and the state of Arkansas for her to resign immediately."
U.S. Sen. Mark Pryor, D-Little Rock, also called for Shoffner's resignation, saying, "Martha Shoffner should resign and be prosecuted to the full extent of the law. Arkansas deserves better."