Tuesday, May 21, 2013

Martha Shoffner resigns as Arkansas state treasurer

Posted By on Tue, May 21, 2013 at 5:28 PM

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AT COURT MONDAY: Chuck Banks and Martha Shoffner.
  • AT COURT MONDAY: Chuck Banks and Martha Shoffner.
A 5:04 p.m. e-mail from Chuck Banks, attorney for Martha Shoffner, delivered a copy of a letter she sent to Gov. Mike Beebe tendering her resignation as state treasurer.

She had not returned to work today following her appearance in federal court to answer a charge that she'd extorted money through public office by taking kickbacks from a securities salesman who did business with the state.

Banks had said yesterday that he'd recommend Shoffner resign given what faced her. According to the FBI, she admitted her improper activities to agents who arrested her Saturday at her home in Newport after the salesman, acting as a confidential informant, recorded her accepting $6,000 in $100 bills hidden in a pie as one in a series of payments for a huge increase he'd enjoyed in selling bonds to Shoffner's office for state investments.

Shoffner's letter, copied to the attorney general, said she could no longer perform the duties and responsibilities owed the public. There'd been unanimous calls for her immediate resignation from political figures and a push for Beebe to call a special session to impeach her or otherwise remove her if she did not. Beebe had said this morning he wanted to give her a little more time before plunging into some uncharted removal waters. Given circumstances and Banks' advice, her resignation can't be called a surprise.

Beebe will appoint a successor to complete her term, which runs through 2014. Former Treasurer Jimmie Lou Fisher is one of several names mentioned as a potential appointee.

The resignation lances a boil that would have grown into a huge political squabble before too many more hours had passed.

I've sought a comment from Beebe on his plans and have asked Banks if this signals any change in how Shoffner plans to proceed on the charge. UPDATE: Banks said there'd been no change in the earlier statement that Shoffner planned to enter an innocent plea. "Still more work to do," he commented in an e-mail.

BEEBE OFFICE UPDATE:

He’s glad to see it happen with the immediacy that it did. His attention now turns to the appointment, he will work to have someone in place as soon as possible. He did not reach out to anybody prior to the resignation, will begin that process now that the letter is in hand.


Shoffner faces a sentence of up to 20 years on a conviction. A criminal defense attorney, using some estimates on the amount of alleged bribery and money lost to the state in the transactions, has estimated for me that she could face a minimum of four to six years in prison under federal sentencing guidelines. Downward departures are unusual for public officials in corruption cases. Shoffner is 68 and in her second term as treasurer. She'd previously served in the House of Representatives.

This is only the end of the beginning, of course. Charges arising from this case could go beyond the single charge filed against Shoffner so far, depending on whether prosecutors at the state and federal level think more investigation is required. State prosecutors, for example, could pursue state bribery charges as well as charges related to improper campaign contributions. Securities regulators at the state and federal level are reviewing activities of the securities dealer. Inevitably, that review could consider others with whom Shoffner has dealt, including in some previously reported campaign finance discrepancies. Shoffner fell, too, because of tips from disaffected former employees whose variety of stories might bear another look. State legislators will want to look at whether sufficient protection is available to encourage whistleblowing by employees who think they know of misdeeds by officials. Also, people who had knowledge of Shoffner's alleged activities might be deserving of some attention as well. I've written a column this week expressing a widely held belief that a securities investment professional shouldn't be chosen by popular election, certainly not in a race in which the campaign finance money has always come from people with an interest in doing business with the treasurer.

Here's the original story on the charge.

Here also is our exclusive story in which three sources, including his boss, identify salesman Steele Stephens of the St. Bernard Financial Services company as the salesman who participated in the investigation.

Is a note of sadness allowed for this debacle? Or only anger of the self-righteous and political triumphalism?

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