Ark. treasurer resigns amid charges she took cash

AP News
Posted: May 21, 2013 9:00 PM
Ark. treasurer resigns amid charges she took cash

LITTLE ROCK, Ark. (AP) — Arkansas' state treasurer resigned Tuesday after being accused of accepting at least $36,000 cash in exchange for steering business to an investment broker, bowing to bipartisan calls to step down or face removal from office.

Democrat Martha Shoffner held the office since 2007 and was re-elected in 2010. She was barred by term limits from seeking re-election next year.

"I am proud to have been elected by and to have served the people of the state of Arkansas and regret that I can no longer perform the duties and responsibilities owed to the public," Shoffner wrote in a letter to Gov. Mike Beebe.

Her resignation was effective 5 p.m. Tuesday. A spokesman for Beebe said the governor received Shoffner's letter late Tuesday afternoon but had not spoken directly to her.

After her arrest in an FBI sting operation Saturday, Shoffner was under pressure from both Democrats and Republicans to step down.

She spent the weekend in jail, appeared in court Monday and was released on her own recognizance. She didn't enter a plea, but her attorney, Chuck Banks, said she would plead not guilty at the appropriate time. A next court date was not set.

A federal grand jury will decide whether to indict. Shoffner, 68, is charged with attempt and conspiracy to commit extortion under color of official right under the Hobbs Act, a federal law often used to prosecute public officials for accepting bribes.

The charges carry maximum penalties of 20 years in prison and up to a $250,000 fine.

"It would be very hard, in my opinion, for that office to properly function under her continued leadership," Beebe, a Democrat who was among those calling for Shoffner to resign, said Monday.

Earlier Tuesday, before it was clear that Shoffner was resigning, Beebe said he'd consider asking lawmakers to remove the treasurer if she didn't leave office. The top Republican in the GOP-controlled House, Rep. Bruce Westerman, urged Beebe to call a meeting of lawmakers to start the process of removing Shoffner.

"I think she made the right decision in the best interest of the state and also saved the taxpayer dollars of a special session to remove her," said Westerman, of Hot Springs.

Rep. Greg Leding, the top Democrat in the House, said his caucus was prepared to call for a special session to remove Shoffner if she hadn't resigned by the end of the week.

"While she is innocent until proven guilty, we saw no way for her to be able to execute the duties of that office," said Leding, of Fayetteville. "The people of Arkansas deserve somebody who can executive the duties of that office responsibly."

Federal prosecutors allege Shoffner accepted $12,000 a year from a broker who would sometimes deliver cash in a pie box, with the pie included. They said the broker is cooperating with investigators.

An FBI affidavit filed in federal court alleges that a bond broker — unidentified in court documents — would roll up cash in $6,000 increments and have it delivered to Shoffner's office every six months. At least two of the payments were delivered in a pie box with a pie. The broker "recognized his/her bond business with the state grew because of the payments," the affidavit said.

The payments were made after Shoffner asked the broker for $1,000 a month to pay her rent in Little Rock, according to the affidavit. The document said the broker was granted immunity in exchange for cooperating.

Shoffner had faced inquiries about the way her office handled state investments. Last year, legislative auditors questioned her selling of bonds before they matured, a practice they said cost the state more than $434,000 worth of earnings.

Shoffner was arrested at her Newport home after the broker agreed to record the meeting and bring $6,000 in a pie box, the affidavit said. FBI agents executed a search warrant and found the cash inside a cigarette package in Shoffner's kitchen. Shoffner admitted she accepted the payments from the broker, the FBI said in its affidavit.

After court Monday, Shoffner told reporters she didn't plan to resign, but her attorney said he would probably advise her to do so.

Lawmakers faced two options in the state constitution for removing her if she didn't resign. One called for an impeachment vote in the House, followed by the trial in the Senate.

The other provision said the governor can remove the treasurer "upon the joint address of two-thirds" of the House and Senate. But it was unclear from the wording whether the provision meant a two-thirds vote would have been needed to remove Shoffner.

Attorney General Dustin McDaniel and U.S. Sen. Mark Pryor also had called for her resignation. So had the heads of the state Democratic and Republican parties.

Whoever Beebe appoints to fill Shoffner's term cannot run for the seat next year.

Beebe spokesman Matt DeCample said the governor has potential replacements in mind and plans to put someone in place quickly. DeCample declined to name specific candidates.

Shoffner, a former state representative, was first elected treasurer in 2006 and won a second term in 2010 after defeating a Green Party challenger.

During her re-election bid, she apologized for referring to the state trooper driving Beebe as a "manservant." Shoffner made the comments while defending her personal use of a state vehicle.


Follow Andrew DeMillo on Twitter at