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Martha Shoffner resigns as Arkansas state treasurer

Max Brantley — Tue, 21 May 2013 17:28:15 -0500

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.

She 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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The guns and Bass Pro Shops open line

Max Brantley — Tue, 21 May 2013 16:00:48 -0500

The line is open. Finishing up:

* UA PRESIDENT BOBBITT RECOMMENDS UA MAINTAIN NO-GUN POLICY: University of Arkansas System President Donald Bobbitt will recommend to the UA Board of Trustees Thursday that it vote to opt out of the new state law that allows college campuses to choose to permit staff to carry concealed weapons. The UA has 11 campuses. Several other Arkansas colleges have already made that decision, including UCA and Henderson. The ASU Board of Trustees also will vote Thursday on chancellors' recommendations to keep the four ASU campuses gun-free. Here's the resolution that Bobbitt will ask the UA Board to approve.

* THINGS ARE HUMMING IN OTTER CREEK: One of those periodic urban retail myths — Costco was looking at a location in Otter Creek — passed over my desk and that reminded me I'd been meaning to check in with Tommy Hodges of Otter Creek Land Co. on the Bass Pro Shops development at the I-30/430 interchange. No, Costco isn't coming. But construction on the Bass Pro Shops outlet is moving along and the store should open, complete with four-acre fishing lake, by October or November, Hodges said. First Security Bank will have a new branch on an outparcel about that time, too. A restaurant may also be among the first new developments. A year later, Hodges said he hopes to have open a high-end outlet mall, with complementing hotel and restaurants. He said a glitzy lineup of tenants has been assembled, but he's not ready to release it yet. The opening of the Bass Pro, with its expected big traffic, should firm up commitments from many businesses, including some retail operations with plans for freestanding businesses.

* VOTE BUYING SENTENCE: Sam Malone, a former West Memphis police officer, was sentenced to 7.2 months of house arrest and additional probation in federal court today for his role in an illegal scheme to elect Hudson Hallum, a Democrat, to a seat in the state House, the U.S. attorney's office said. He, Hallum, Hallum's father and Philip Carter, a West Memphis council member, have pleaded guilty in a scheme that included influencing votes with vodka and chicken dinners. The others haven't been sentenced. Carter will be in court tomorrow; Hallum on June 20.

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Got a great cocktail recipe? It could win you tickets to 'Jersey Boys'

Robert Bell — Tue, 21 May 2013 15:15:00 -0500

Who doesn't love a good cocktail, right? And who doesn't love "Jersey Boys," the Tony- and Grammy-winning jukebox musical that tells the story of Frankie Valli and The Four Seasons?

Say, here's an idea: what if the Arkansas Times was to have a contest for the best "Jersey Boys"-inspired cocktail, and give the winner a pair of tickets to see the musical June 19 at Robinson Center Music Hall, plus entry to the official after-party at Boscos, where that person's winning cocktail would be served? Sound keen? Bet.

Here's the deal: email your cocktail recipe to tiffany@arktimes.com and put "JERSEY BOYS COCKTAIL" in the subject line. We'll select the most promising recipes, then your trusty and (very) seasoned Times cocktail experts will try them out and anoint a winner. The contest is open from through June 6, and the usual caveats apply (no Times employees, don't scalp the tickets, etc.).

Feel free to get all crazy and "mixologist" with this thing, but know that if your recipe is too out-there, calling for emulsified durian oil or pulverized fresh loganberries or something else that no self-respecting bartender has ever heard of, then you might not win. Cool? OK. Aaaand... go!

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Jarod Varner picked to lead Central Arkansas Transit

Max Brantley — Tue, 21 May 2013 14:48:00 -0500

Jarod Varner, who's been vice president of transit operations for the Denton County (Texas) Transportation Authority, where he's worked since 2005, has been selected to be the executive director of the Central Arkansas Transit Authority. He succeeds the retiring Betty Wineland.

Varner has a bachelor's degree from Harding University and a master's from the University of North Texas in public administration.

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Appeals court strikes down 20-week abortion ban

Max Brantley — Tue, 21 May 2013 14:25:00 -0500

The 9th U.S. Circuit Court of Appeals has struck down the Arizona law that put a ban on abortions beginning with the 20th week of pregnancy.

This is good news for abortion rights generally, though not necessarily in Arkansas since we are in a different judicial circuit. But it should give some ammunition to fire at the new Arkansas ban on abortions at 20 weeks, a law that takes effect this summer. Legal action is being planned on that Arkansas law, but it presents more difficulties than the 12-week ban, recently enjoined by federal Judge Susan Webber Wright.

Here's the full 9th Circuit opinion.

Very few abortions are performed in Arkansas at 20 weeks or later (50 in 2011 according to state statistics) and they are not routinely provided by the centers that provide most of the abortions in the state, many of them medicine-induced abortions at the early stage of pregnancy. So the abortion providers who are plaintiffs in the 12-week suit aren't readily suited to be plaintiffs in the 20-week case, Most likely, a Jane Doe will be necessary and time will be critical, particularly to the woman, since surgical abortions provided late in pregnancy are invariably prompted by a serious medical condition of the woman or the fetus.

Arizona tried to use the same defense for its 20-week law that anti-abortionists cooked up in Arkansas for the 12-week ban. Because the law allows some exceptions, it doesn't amount to a "ban. But the 9th Circuit rejected that reasoning, saying the law still banned many abortions before viability, or the time the fetus could live outside the womb. That is prohibited by U.S. Supreme Court precedent. So far.

Hard to see how these same words from the 9th Circuit wouldn't apply in Arkansas:

The panel reversed the district court’s order denying declaratory and injunctive relief to plaintiffs and held that the Constitution does not permit the Arizona legislature to prohibit abortion beginning at twenty weeks gestation, before the fetus is viable.

The panel held that under controlling Supreme Court precedent, Arizona may not deprive a woman of the choice to terminate her pregnancy at any point prior to viability. The panel held that Arizona House Bill 2036, enacted in April 2012, effects such a deprivation by prohibiting abortion from twenty weeks gestational age through fetal viability. The panel held that the twenty-week law is therefore unconstitutional under an unbroken stream of Supreme Court authority, beginning with Roe v. Wade and ending with Gonzales v. Carhart.

Concurring, Judge Kleinfeld stated that the current state of the law compelled him to concur, and that what controls this case is that the parties do not dispute that the twenty week line Arizona has drawn is three or four weeks prior to viability.

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Two shot at Verizon Arena this morning

David Koon — Tue, 21 May 2013 14:20:00 -0500

Officers with North Little Rock police responded to a call about a shooting at Verizon Arena this morning around 11 a.m. and found two people shot.

A female student from Little Rock's Parkview High School was one of two people wounded in what a Little Rock School District official told KTHV is a "domestic situation." The suspect in the case, a male who is not a student at Parkview, was also shot, and is in serious condition. The relationship between the suspect and the female victim — and how both wound up wounded — hasn't been released.

Parkview had just completed practice for their graduation ceremony at the time of the shooting. Parkview's graduation is scheduled for 8:30 p.m. tonight at Verizon, and will apparently go on as planned. We're trying to reach a NLR police spokesman for more information, and will post if anything else becomes available.

UPDATE: This from the Little Rock School District:

Tuesday morning following practice for Parkview graduation exercises, a female senior was wounded on the parking lot outside Verizon Arena as the result of what police believe was a domestic dispute with a person not affiliated with LRSD. Thankfully, the student’s injuries are not life-threatening. No other students were injured.

We are sending our well wishes to the injured student and her family and hopeful that the she will make a full recovery. Graduation exercises will continue as planned and LRSD is working closely with North Little Rock Police to provide extra security at all ceremonies.

In case of severe weather, we will follow Verizon Arena emergency protocols which require everyone to be inside the arena bowl, not the concession areas; and any other measures recommended by Verizon officials, should they become necessary.

Channel 4 has identified the young woman as Jasmine Fisher.

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Airport audit brought to board

Leslie Newell Peacock — Tue, 21 May 2013 12:29:00 -0500

The muddle in accounting at the Bill and Hillary National Airport that meant no checks could be cut for “quite a length of time,” L. Cotton Thomas & Co. CFO Chad Miller said, were outlined to the full commission this morning by the auditing firm.

The audit says the accounting in airport’s general ledger, which was changed when new software was installed in 2011 and made more problematic with a software upgrade in 2012, “lacks sufficient clarity and detail to readily and clearly identify the transactions of the Airport.” The new software changed accounting codes and an upgrade that was supposed to integrate with the software in a way that would keep classifications separate did not. That meant that coding for transactions were changed twice over the course of a year. Auditors described their work as “cumbersome” because of the problems and said it is difficult to compare the latest numbers with those in 2011. They recommended that the airport examine its books carefully on a month-to-month basis to make sure that changes implemented to fix the problems are working.

The commission approved the report, but not until after Miller fielded questions from commissioners. Bob East noted that there were 40 pages of “account reversals” because items weren’t coded correctly, and both he and Tom Schueck asked whether the software, which the Thomas auditors said was geared toward manufacturing, was right for airport use. Executive Director Ron Mathieu said the software was chosen after presentations by “four or five” companies and that it was in use at other airports. Mathieu said that company that integrated the upgrade into the new software in 2012, causing more problems, has been at the airport “for weeks at a time” fixing problems and training airport staff to use the program. He said the vast majority of problems have been worked out.

Commissioner Wes Clark asked if the new software would allow the airport to reduce the number of employees in the finance department. Mathieu responded that the goal was not to reduce staff but to allow staff to better manage its procurement and find efficiencies that way. Commissioner Jesse Mason sought to cut off discussion, saying the audit already had been discussed in the finance committee of the board, that “there are no missing funds, no wrongdoing” and the board should not make a big deal out of it.

L. Cotton Thomas, the airport’s auditor for three decades, will not seek to win the airport’s business when it contract expires this summer, Mike Schaufele told the finance committee last week.

The board also voted to extend its contract with legal counsel Cross, Gunter, Witherspoon and Galchus for three years with one three-year extension available “at the discretion of the Executive Director,” but not after some debate on the process. Commissioner East questioned whether the board should give Mathieu the power to renew contracts on his own without board approval, and Schueck said he was “not comfortable” with forgoing a bidding process for the business. Mason said he didn't understand the concern over the process, to which Chairman Kay Arnold said the commission is to abide by its rules. She asked Commissioner Virgil Miller to put together a committee to “get clarity” on the process. Schueck’s was the only no vote on the extension.

The firm also got a 2.6 percent raise, retained for $11,000 a month with an hourly rate of $195.

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Shoffner watch: She won't be in today

Max Brantley — Tue, 21 May 2013 11:20:00 -0500

Debbie Rogers, chief deputy state treasurer, said Treasurer Martha Shoffner will not be at work today, but otherwise it was "business as usual" at the treasurer's office. Shoffner was arrested Saturday and charged Monday with taking kickbacks from a securities salesman who handled state bond business.

Rogers said she didn't know about Shoffner's work plans beyond today. She said Shoffner had spoken briefly with her today and said that she'd been advised not to comment and to refer questions to her attorney, Chuck Banks.

There's been a bipartisan call for Shoffner's resignation. Republicans also have begun urging Gov. Mike Beebe to begin proceedings to remove Shoffner from office. The Constitution provides for impeachment by the House and trial in the Senate as one means of removing the state treasurer. Shoffner's term in the $53,000-a-year job runs through 2014. There's also a provision for removal by "address," a hazily written provision that hasn't been used since the Constitution was written in 1874. It might mean that the governor could remove Shoffner on a two-thirds vote of House and Senate.

Shoffner should resign for multiple reasons, beginning with the sworn affidavit that she'd admitted to FBI agents that she'd wrongly accepted money from the bond dealer. She may yet have a legal defense on the charge, but it's politically sufficient evidence that she should no longer be conducting state investment business.

I think Gov. Mike Beebe is right to give the decision a bit more time before putting removal machinery in play. Said his spokesman Matt DeCample about impeachment and address:

Those are always options, but before going to the extent and taxpayer expense of calling in the Legislature, he wants to give the resignation option some time. There is also continuing study of how exactly those proceeding would occur. We haven’t found record of the “by address” provision being used before.

I think the last Arkansas state officeholder to be removed from office was Sen. Guy "Mutt" Jones, expelled after a Senate trial in 1974 after a federal tax conviction.

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NLR woman dies after fiance sets her on fire

Max Brantley — Tue, 21 May 2013 10:50:00 -0500

Worst local story today so far is from Fox 16:

A North Little Rock woman has died after her fiancee poured gasoline on her and set her on fire.

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Cathi Compton also in circuit judge race

Max Brantley — Tue, 21 May 2013 10:00:00 -0500

We're one day into the official campaign period for judicial offices (the election is May 20, 2014) and we already have a race for circuit judge of the 13th division, covering Pulaski and Perry counties.

Cathi Compton has just begun a Facebook page for her race for the seat being vacated by the retiring Judge Collins Kilgore. She's been a member of the attorney general's staff and made a race for circuit judge in 2008.

Yesterday, Little Rock lawyer Mike Reif announced for the seat.

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Conservationists call for Buffalo protection on river, hog farm tour

Max Brantley — Tue, 21 May 2013 09:41:00 -0500

State legislators have an interesting twofer today and tomorrow — a Buffalo River float trip and a visit to a mass hog feeding operation that conservationists fear holds peril for the pristine national river. Hosts will include the Arkansas Farm Bureau and agri-giant Cargill.

A news release follows from the National Parks Conservation Association, one of several groups that have criticized an inadequate permitting process for the C&H Hog Farm at Mount Judea, which will house 6,500 pigs for Cargill. It says, in part:

By forcing a permit through that has tremendous holes with a lack of adequate public input, these agencies have endangered our treasured landscape and the livelihoods of many individuals — including the owners of C & H. The organizations concerned about the impact of C & H are pro-farm, but we are also pro-Buffalo National River, and the threat to the nation’s first national river is real.

Don Nelms, the environmentalist business tycoon/photographer who watches over the Buffalo River from a bluff-top home above Jasper, is urging a demonstration of river advocates at lunch Wednesday in Jasper. Earlier, we posted his photo slideshow on the issue. He sent the artwork above with the following message:

Until Cargill acknowledges that they made a mistake and rectify their mistake, there will continue to be a large hog farm in the Buffalo National River watershed.

Cargill is hosting a luncheon for the Arkansas Senate and House Agriculture Committees at the Ozark Café on Wednesday, May 22, in Jasper. This would be a perfect time for you to send a message to Cargill. If everyone would show up on the square of Jasper by about 10:30 and protest until the legislators leave around 1 o'clock, I think it would have a profound effect on the disposition of this whole issue.

Cargill thinks they're going to just wait this thing out and that the people voicing opposition to their locating this hog farm in Newton County are just a bunch of wacko environmentalists. Let's prove them wrong. Let's show them that the opposition comes from all walks of life.

NEWS RELEASE

Groups Urge Continued Focus on Faulty Permitting Process for Factory Hog Farm Near Buffalo National River

Background: On May 21 and 22, Arkansas state legislators will tour C & H Hog Farms, which was approved through an inadequate permitting process that did not factor in the potential for numerous environmental and health impacts to the region and Buffalo National River. The agencies that approved the loan and permit for the factory farm failed to consult with the National Park Service or the U.S. Fish and Wildlife Service, which is charged with protecting endangered species in the region. Local residents could face health impacts, along with a constant unpleasant odor, due to exposure to ammonia, hydrogen sulfide, and methane. Additionally, the farm's Nutrient Management Plan (NMP) contained significant errors, omissions and misrepresentations, which were highlighted in a letter to the Arkansas Department of Environmental Quality last week, urging them to revoke the permit. The letter and associated attachments can be found here: http://buffaloriveralliance.org/Default.aspx?pageId=1558368

Statement by Michael Dougherty, President of the Buffalo River Chamber of Commerce and Member of the Buffalo River Watershed Alliance

“As state legislators prepare to tour C & H Hog Farms, the National Parks Conservation Association, Ozark Society, Buffalo River Watershed Alliance and Arkansas Canoe Club urge that the focus remain on the faulty permitting process that has allowed this industrial hog factory to proceed. The presence of this concentrated animal feeding operation (CAFO) in the Buffalo River Watershed continues to cause an uproar throughout the state and endangers the local economy, America's first national river — the Buffalo, as well as the quality of life for thousands of surrounding residents.

“The individuals who are set to operate C & H were put into an unfortunate position by the Arkansas Department of Environmental Quality (ADEQ) and USDA's Farm Service Agency (FSA). The situation we have now is a result of a failed permitting process, and Cargill — the international agri-giant who will supply the hogs — and the agencies involved should be working toward a resolution that pleases everyone. By forcing a permit through that has tremendous holes with a lack of adequate public input, these agencies have endangered our treasured landscape and the livelihoods of many individuals — including the owners of C & H. The organizations concerned about the impact of C & H are pro-farm, but we are also pro-Buffalo National River, and the threat to the nation’s first national river is real.

“Buffalo National River brought over 1 million visitors to the region, who supported roughly $38 million in economic activity in 2011. Visitors spend money in our stores. They rent our vacation homes. They eat in our restaurants. They fish and kayak in our river. The Arkansas Department of Environmental Quality and USDA's Farm Service Agency owe it to the people of Arkansas and to the residents who depend on this river to show the true impacts of this factory farm through an open and transparent process. We’re calling on Cargill, ADEQ and the federal government to make this right.”

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A case for the new Public Corruption Task Force?

Max Brantley — Tue, 21 May 2013 09:24:00 -0500

At the announcement yesterday of the charge against Martha Shoffner, U.S. attorneys announced a public corruption task force for the state.

Do you think maybe an offer of $30,000 in campaign contributions to change a vote on pending legislaton would be worthy of an inquiry?

This post is by Brandi Womack, wife of Republican state Rep. Richard Womack of Arkadelphia, on Womack's Facebook page:

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Sources identify Steele Stephens as informant in Shoffner case

Max Brantley — Tue, 21 May 2013 08:16:00 -0500

I hinted earlier that evidence was mounting that the securities salesman who provided confidential information to the FBI was Steele Stephens, the broker who began enjoying a huge share of Treasurer Martha Shoffner's bond business in 2010.

Two highly placed sources have told me that they were certain Stephens was the wired informant who delivered cash to Shoffner in a pie at her Newport home Saturday.

Yesterday, he didn't take calls. But his boss at St. Bernard Financial Services in Russellville, Robert Keenan, had told me he'd talked to Stephens, who assured him he was not involved.

After hearing from my two sources, I was heading to work with plans to call Keenan back. I was greeted at my desk by this phone message from Keenan: "I think my rep's been lying to me."

I called Keenan, who gave the following account:

Keenan first looked again at the criminal charge and decided that the time line of Stephens' involvement with Shoffner dealing could fit Stephens after all, if you counted his time with both St. Bernard and an earlier employer.

"I asked him, 'Are you involved?'"

Stephens reportedly responded, "The FBI told me I can't say anything."

Keenan said he then asked when that counsel from the FBI occurred. In January 2012, Stephens reportedly responded. That's when the confidential source began talking with the FBI in the Shoffner case.

"So I said, OK, it's him" Keenan told me.

Stephens never officially confirmed that. But Keenan said "there are so many dots." He said Stephens continues to work at the firm today (he didn't respond to my request for a call), because he didn't want to move rashly. But he said he'd begun notifying all relevant regulatory authorities to "see what they say."

Keenan reiterated that anything Stephens had done was without his knowledge. "I'm crushed. He's a great guy."

He said Stephens is required to sign a lengthy questionaire every year about his business. Among them is whether he'd made any contributions to anyone without the firm's permission. He said he had not. "Obviously that's not true," Keenan said.

"It's like family when you're in a little firm. You believe in your people. It's like if somebody told you your son's got a drug problem. Your first reaction would be to say, 'No, I don't think so.'"

Keenan said, "It's a PR nightmare. We haven't done anything wrong as a firm. My dad taught me you can't do crap like this because it eventually comes out."

Steele Stephens' father, Steve Stephens of Little Rock, also has been employed as a registered securities rep at the firm, but retired this year on his 83rd birthday, Keenan said. (I had Keenan's name at the beginning of the sentence incorrectly in the original post.)

When I went back to Heath Abshure, the state securities commissioner, with my information that Stephens figured in the probe, he responded:

We are working on it. Although the Department’s enforcement actions are civil, the effect on a respondent’s reputation mirrors that of a criminal case. As soon as the Department files its complaint, the damage is done. Therefore, I tell my examiners and attorneys that they are not to file an action until they are absolutely sure they can prove each allegation in the complaint.

With regard to the identity of the confidential source, the Department is reaching out to the likely suspects in an effort to get them to talk to us. Cooperation is something the Department considers in its enforcement matters. Obviously, lack of cooperation is also considered.

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Will Tom Cotton help Oklahoma or hold it hostage to ideology?

Max Brantley — Tue, 21 May 2013 07:56:00 -0500

Here's a list of the Republicans who voted against disaster aid for areas hit by Hurricane Sandy. It includes Oklahoma congressmen as well as, famously, Rep. Tom Cotton, the Club for Growth's consul in Arkansas's 4th District, itself a frequent tornado casualty.

U.S. Sen. Tom Coburn of Oklahoma is holding firm. He wants disaster aid for Oklahoma, but he wants it paid for by cuts somewhere else. That's been Cotton's past stance on disaster money. Will he hold firm when it's a red state feeling the pain?

It's simple. The American way is to help the needy without condition, certainly not that somebody else must sacrifice first. Take no storm hostages, certainly not for ideology. There but for the grace of God go all of us.

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Stormy morning: Shoffner, hospitals, abortion

Max Brantley — Tue, 21 May 2013 06:22:33 -0500

A morning report as Arkansas watches the stormy skies:

* THE STATE TREASURER WATCH: Can Martha Shoffner really return to work today as state treasurer, overseeing billions in state investments, after admitting to FBI agents that she wrongfully accepted a pie stuffed with a cash kickback from a securities salesman she inordinately favored with state business?

Her first appointment today will be with her attorney, Chuck Banks, who's already indicated he thinks her best choice would be to resign, but the decision is hers. Facts of the case indicate she's broke, which might make her want to hang onto her $53,000-a-year job. She presumably has some Social Security to fall back on. She's accumulated some state pension credits, too. (I've looked but can't immediately find if my memory was correct about legislation being introduced this year to require forfeiture of retirement benefits by public officials convicted of crimes.)

Meanwhile, multiple sources of extremely high credibility assure me speculation on the FBI's confidential informant has not been off base.

It's worth highlighting what federal officials said yesterday. Until Saturday, when the wired informant delivered a hot money pie to Shoffner at her Newport home, they didn't have a case against the treasurer. Some overheated Republican commentators confuse suspicion with evidence. Evidence and probable cause to believe crimes have been committed are customarily necessary to undertake criminal investigations, not partisan innuendo. In this case, that arrived when the securities salesman began talking to federal investigators, long before the legislature got involved. Even then, it took months before they could get the goods on the treasurer.

Ready as I am to presume Shoffner's guilty, it's worth remembering that we have a Constitution. For example, if Shoffner doesn't quit, agitation will grow quickly for a special session to impeach her, an expensive process and also one that would require some period of time to stage, with lots of procedural problems. If she really is planning a criminal defense, she might argue that it would harm her defense by being forced to defend essentially the same charges in a trial for removal. She could do everyone a favor by going quietly, of course.

PS: I am reminded that there's an easier course provided in the Arkansas Constitution. The governor may remove the treasurer by "address," requiring only a two-thirds vote of both houses. That could be quick work. Some, but probably only a few, might be reluctant to essentially declare a guilty verdict without trial for someone protesting their innocence. But it certainly could be done. Again, the better course is for Shoffner to hang it up.

* ARKANSAS: IT COULD BE WORSE: We had a lamentable legislative session if you have a progressive, or even a centrist outlook. But, yes, it could be worse. Get a load of what a Virginia senator and candidate for attorney general wants to do:

If a woman in Virginia has a miscarriage without a doctor present, they must report it within 24 hours to the police or risk going to jail for a full year. At least, that’s what would have happened if a bill introduced by Virginia state Sen. Mark Obenshain (R) had become law

* THE UNIVERSITY OF ARKANSAS BOARD AND HOSPITAL COMBINATIONS: The University of Arkansas Board of Trustees meets tomorrow. The agenda includes an "information" item about a clinical integration agreement. That's not an action item on the discussion of UAMS and St. Vincent merging their operations. The agenda also includes a new affiliation agreement between UAMS and Arkansas Children's Hospital. UAMS pediatric faculty staffs Children's. They've had an agreement since 1982 that has been amended several times. It's not clear what drives the latest amendment, though I note that the divesting of power by the UA Board to the UAMS chancellor on overseeing the arrangement and a joint governing board made up equally of UAMS and Children's representatives is similar to what's been discussed for UAMS-St. Vincent. The Children's deal refers to autonomy of decisions in the respective institutions and the like.

* NICE WORK BY THE LEGISLATURE: You see the report in the Arkansas Democrat-Gazette about the lawsuit filed over Blytheville's decision to exempt itself from the new school choice law, presumably to prevent segregative transfers from a district with a history of court action over segregation? The go-to lawyer for the Billionaire Boys Club and their pro-charter, pro-voucher, anti-conventional public school agenda, Jess Askew, is leading the legal charge naturally. It's an opportunity to frontally combat the theory that all of Arkansas, with its well-documented past of support for segregation, has a duty not to contribute to resegregation and thus can take racial outcomes into account in allowing school choice. But the real wrinkle is a technicality to beat all technicalities. Askew is arguing that the law is without exception, at least this year, because the deadline to ask for an exception for the next school year, as written in the law, occurred April 1 before the law was signed. The state Education Department imposed a new deadline so districts could have a meaningful opportunity to opt out, but the lawsuit argues that's not legal. Nice trick, Johnny Key. Maybe if they have that special session to impeach Shoffner, they could clean up that bad piece of legislative drafting. Unless it was intentional.

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Botanas bar The Fold opens

David Ramsey — Mon, 20 May 2013 17:15:51 -0500

The Fold, the new taqueria and cocktail bar from Bart Barlogie and Wilson Brandt, opened this weekend in Riverdale. They're open Tues. - Thur. 11:00 a.m. - 11:00 p.m.; Fri. - Sat. 11:00 a.m. - 12:00 a.m.; Sun. 11:00 a.m. - 11:00 p.m. (phone number: 916-9706). Based on the epic lines at Local Lime, the market for upscale and eclectic Mexican food in Little Rock is strong, so we’re expecting a hit. Located in a renovated 1950s gas station at 3501 Old Cantrell Hill Road, the restaurant's specialty is botanas — small plates, or snacks — while the bar will focus on Mezcal. We’re psyched to sample the cocktails, which feature hand-squeezed juice. See some samples after the jump.

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The piegate open line

Max Brantley — Mon, 20 May 2013 16:27:05 -0500

Weird day. I've been consumed with Martha Shoffner's favorite pie. Line is open. Finishing up, it's still all Martha all the time:

* MORE QUESTIONS THAN ANSWERS: Will a single federal charge be enough for Martha Shoffner? With conviction, probably, for a 68-year-old woman and a long federal jolt. But what a mess left behind. For example:

1) FREE RENT: FBI recitation said Shoffner lived free in a Little Rock building until 2009 when it was sold (and she went looking for a sugar daddy in the bond business). Lived free? Reported as gift? Gift legal under ethics rule? Who provided the gift? Did they get something in return?

2) CAMPAIGN FINANCE: There's still Shoffner's claim that she spent $900 a month in campaign money on a beatup, aging Ford van rented from a Newport used car lot. Really? Or did it mask a way to tap campaign money?

3) EMPLOYEES: Multiple employees have told me tales today of being dispatched to purchase everything from items for her mother's house to a bacon biscuit for her dog (bacon had to be extra crispy) with office accounts. One employee said she was offered a public pay raise if she'd work outside the office on state time to raise campaign money. Another said she'd told the FBI about campaign contributions missing from reports. Another told me about staff shakedowns to buy gifts for Shoffner, such as a set of golf clubs. Another told of receiving cash payments for doing questionable chores for Shoffner as an employee.

4) THE CANCER: Is Shoffner really believable when she says she shook down ONLY ONE securities dealer for living expenses? Bribery is sort of like eating potato chips, isn't it? Can't live on just one.

5) THE FUTURE: Nobody — nobody — is urging Shoffner to stay and fight. If we can believe the FBI's sworn affidavit, she's admitted taking illegal kickbacks. She'd serve the public, her party and her legal fees by resigning and cutting the best deal possible as quickly as possible and hope her lawyer Chuck Banks can find a way to plead for mercy.

6) IN DEFENSE: Employees — including those sorely disaffected with Shoffner — ascribe some of her problems to mood swings and judgment bordering on delusional. A gambling addiction helped a previous client of Chuck Banks, Lu Hardin, avoid jail time for abuse of public office. Perhaps Shoffner can present a sympathy-inducing defense. Based on early reports, however, she might have a harder time turning out a file folder full of testimonials from friends and co-workers.

7) CO-CONSPIRATOR: Surely we'll know sooner rather than later who wired up to give feds the goods on his/her payments to Shoffner. Surely there'll be consequences for a dishonest securities salesman even if held harmless on federal charges through his immunity deal.

* ELSEWHERE IN THE WORLD: Massive tornado smashed Oklahoma City. A track two miles wide. An elementary school took a direct hit, according to various reports.

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Rep. Broadaway won't make race for attorney general

Max Brantley — Mon, 20 May 2013 16:26:06 -0500

* ANOTHER DROPOUT: State Rep. Mary Broadaway of Paragould, who had been considering a race for attorney general, said today that she'd seek re-election instead. "not the time."

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Watch Sens. Boozman and Pryor talk about the Internet econmy

Lindsey Millar — Mon, 20 May 2013 15:25:23 -0500

Roby Brock will moderate the Google+Hangout on how Arkansas's faring in the Internet economy. The video conference starts streaming at 3:30 p.m. It's part of the Internet Association’s Internet on Main Street tour.

In addition to Boozman and Pryor, participants include...

· Michael Beckerman, President and CEO, The Internet Association

· Susie Marks, Sr. Vice President, Arkansas State Chamber of Commerce

· Mike Abbiatti, Executive Director, Arkansas Research and Education Optical Network

· Lee Renniger, Owner, Rock Appliances and Services

· Jeffrey Hall, Associate Director of National Affairs, Arkansas Farm Bureau

· Matt Price, Founder, Bourbon and Boots

· Ellie Keffler, Vice President of the Associated Student Government, University of Arkansas

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Chris Thyer: Informant in Shoffner case will eventually be identified

Max Brantley — Mon, 20 May 2013 14:49:00 -0500

David Koon reports from the news conference this afternoon by U.S. Attorney Chris Thyer of the Eastern District of Arkansas, who brought the charge against state Treasurer Martha Shoffner, and Western District U.S. Attorney Conner Eldridge, who buttressed the message that the feds are looking for corruption statewide.

The U.S. Attorney's Office in Little Rock held a press conference following the appearance by Martha Shoffner in federal court this morning, with Christopher Thyer, U.S. Attorney for the Eastern District of Arkansas, saying the allegations, if proven, "completely erode the public trust" in Shoffner as an elected official. "When that trust is broken," Thyer said, "punishment is due."

Thyer said that the decision to extend immunity to the informant referred to as Confidential Human Source 1 (CHS1) in the criminal complaint against Shoffner was not an easy one, but it was made "out of necessity," due to how limited the alleged conspiracy between Shoffner and CHS1, an unnamed bond broker, was. "If both of those two people remain silent," he said, "we wouldn't be here today."

Asked by a reporter if CHS1 was Steele Stephens, Thyer said "no comment." He later cited Justice Department regulations that require him to only release information contained in public filings, but said the identities of those named in the criminal complaint will eventually come out incourt. He said the immunity extended to CHS1 will keep the informant from being prosecuted "by my office," but he added the immunity doesn't cover potential prosecution on state charges.

Thyer said that the timing of Shoffner's arrest on Saturday had to do with the fact that the Saturday meeting between CHS1 and Shoffner was the first time they had met to make a cash handoff since CHS1 was offered immunity. According to the criminal complaint, the meetings between Shoffner and CHS1 happened at intervals of up to six months. Shoffner wasn't indicted, he said, because a grand jury wasn't available Saturday to hear the evidence. Thyer said they decided to move forward without an indictment because a delay would have meant "we would have left $6,000 in government funds in her possession until the grand jury met." He said the case will be presented to a grand jury as soon as possible.

Asked whether Shoffner should resign, Thyer said he has a personal opinion on it, but declined to share it, saying it is "none of my business," and should be left up to Shoffner and the Arkansas legislature. She can be impeached at a special legislative session if she does not resign. A resignation would leave it to Gov. Mike Beebe to make an appointment.

Beebe called today for Shoffner to resign. He said he hadn't talked to her since she made a snarky remark about the governor being driven around by a "manservant" at a time when attention was focusing on use of state vehicles by statewide officeholders such as Shoffner. By law, the State Police provdes the governor with a security detail.

Shoffner's attorney, Chuck Banks, said he'd "probably" recommend that Shoffner should resign, given the interference with her work if she decides to proceed to trial. But he said that was her decision. He'll be meeting further with Shoffner tomorrow.

In addition to commenting about Shoffner, Thyer and officials from the FBI Little Rock field office, Pulaski County Sheriff's Department, Arkansas State Police, Little Rock Police Department and the U.S. Attorney for the Western District used the occasion of the press conference to announce the formation of the new ArkTrust Public Corruption Task Force. The multi-agency task force will accept and investigate confidential tips on public corruption at any level — local, state or federal — by any elected or appointed official in Arkansas. Tips can be submitted to the ArkTrust hotline at (501)221-8200 or visit tips.fbi.gov.

David Ramsey reports on the Mike Beebe news conference at which he said he had no immediate ideas about a replacement if she does leave office:

Ms. Shoffner should resign. I think she should resign immediately.

... Everybody’s presumed innocent and I understand that. But there’s a difference between a public official and alleged acts that are contained in that affidavit surrounding her official duties. It would be very hard in my opinion for that office to properly function under her continued leadership.

... Over the weekend I was thinking about potentials but there are no immediate names. Obviously you’d like somebody that has management skills…good reputation for integrity, preferably somebody that has knowledge of finance.

...I was shocked by how blatant the conduct was based on the allegations.

... There is a presumption of innocence. Common sense allows most folks to be able to read the affidavit is true, and to the extent that the affidavit is true—and I have no reason to believe it’s not—it’s pretty ironclad.

... [asked whether any current or former employees of Shoffner’s office approached Beebe or his office with problems.] No. What I knew is they had approached Legislative Audit and I know what was said…

... In terms of the FBI sting, they don’t tell state police, they don’t tell anybody.

... [asked whether it hurts democratic party] It hurts everybody. Jason Rapert said it right, it hurts all elected officials. Allegations like this aren’t restricted to one party or the other. Illegal activity unfortunately is known to both parties. Wherever it occurs, it needs to be dealt with and dealt with quickly.

Beebe's official statement:

"I think Martha Shoffner should resign, and I think she should resign immediately. While everyone is presumed innocent until legal proceedings are complete, it would be very hard for the Treasurer's Office to function properly under her continued leadership. When you are elected to any public office, your conduct is held to a higher level of expectations to avoid even the appearance of impropriety. These alleged actions are far worse than that." -

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Judicial races begin

Max Brantley — Mon, 20 May 2013 14:18:29 -0500

Judicial candidates may not formally begin campaigns until one year before an election. That's today for 2014 judicial elections, held the same day as party primaries with runoffs, if necessary, in November.

There'll be lots more of these, but this one came in first and it's for a local judgeship:

Mike Reif said he's running for 13th division circuit court, a seat from which Judge Collins Kilgore is expected to retire. Reif has practiced 29 years with the Little Rock firm of Dover, Dixon, Horne.

NEWS RELEASE

Pulaski County attorney Mike Reif announced Monday his candidacy for the Pulaski and Perry County
CircuitCourt, 13th Division to fill the vacancy created by the upcoming retirement of Judge Collins
Kilgore. The cases assigned to this division are civil, domestic and probate law, and Reif’s law practice
focuses on those areas as well as conducting mediations. Reif, a certified mediator, has practiced 29
years with the Little Rock law firm Dover, Dixon, Horne, PLLC.

“I’m running because I see children of all ages being torn apart emotionally by bitter divorce battles.
I’ve seen cases where parents fighting over custody don’t take the time to stop and look at the long term
damage they’re causing,” Reif says.

“I believe children shouldn’t be the parent’s battleground. Accountability is the cornerstone of our
justice system, and judges must take the extra step to protect our children,” he said.
Reif has already served asspecial judge for this and other circuit courts. “I listen to people, and what I
am hearing is they want a justice system that holds fighting parents accountable,” he says.

“I also don’t believe in wasting time or money with drawn-out lawsuits where it sure seems that only the
lawyers win,” Reif added.

Reif lives in Little Rock with Ellen, his wife of 24 years and their three children. The nonpartisan
judicial election will take place on May 20, 2014.

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Shoffner's late arriving legal help

Max Brantley — Mon, 20 May 2013 14:15:00 -0500

I've now confirmed that State Treasurer Martha Shoffner had no legal representation until her Saturday arrest. That's not surprising, given her actions during month's of intense scrutiny from legislators, the FBI, the press and political foes.

Chuck Banks, who represented her in federal court today, answered my question on when he begin representing her:

When her family contacted me Saturday night and I visited with her yesterday morning. I didn't enter my appearance or file anything until this morning. I notified Jana Sunday afternoon, then I filed a motion this morning and entered my appearance at the hearing.

By then, the damage had been done, including taped outreach to a government informant for more financial help and alleged admission of wrongdoing to arresting agents.

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Greek week continues: Little Greek Restaurant UPDATE

Leslie Newell Peacock — Mon, 20 May 2013 13:40:00 -0500

The Little Greek Restaurant franchise, which says it offers Greek food with an American touch, is coming to Little Rock, taking over the site that housed Cheeburger Cheeburger in the Pleasant Ridge Town Center.

The Little Rock website for the franchise has links to menus in Florida, where the franchise started, and Texas. You got your lamb skewers, mousaka (as LGR spells it), gyros, hummus, etc. The Little Rock phone number hasn't been activated yet; we've left a call with the chain owner Nick Vojnovic to find out when the restaurant will open and who owns the franchise here. [See update below.]

The restaurant's Facebook page offered up the above photograph of spanakopita and Greek salad, which looks pretty good. Looks like a nice beet slice atop the salad.

UPDATE: That is indeed a beet on the top of the Greek salad, a salad that also includes two lettuces, pepperoncini, onions, bell pepper, olives, feta and a potato salad mixture with homemade dressing, company president Vojnovic says. The recipe comes from Greek cooking in Tarpon Springs, Fla., which has the largest Greek population of any American town, thanks to its 19th century sponge diving business.

Franchise holders are Thad and Michelle Waugh. They are hiring between 20 and 30 people for the new restaurant.

The restaurant owners hope to open in early July, Vojnovic said. He said the menu hasn't been formalized to add local tastes (like the Texas one, which includes a filet mignon skewer). The Little Rock restaurant will be the 14th in the chain.

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Robert Keenan says no link between his firm, salesman and charge against Martha Shoffner

Max Brantley — Mon, 20 May 2013 13:22:00 -0500

I've already mentioned this in the main item about the charge against Martha Shoffner, but I thought it was worth a separate mention given rampant speculation on who the government's confidential source in the securities business was that made payments to Shoffner and then wore a wire to gather incriminating information.

A Russellville firm frequently cited as having experienced a big increase in state business says adamantly that they have done no wrong and aren't the source of the information.

Robert Keenan, chief executive of St. Bernard Financial Services in Russellville, reiterates that he doesn't believe the charge relates to Steele Stephens, one of the firm's representatives, 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 Keenan said 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 the person is 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 it's not."

Keenan said the timeline in the federal charge didn't match Stephens' record with St. Bernard because 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 firm's record on state business, scoffing particularly at an auditor's comment at one of the hearings that investment firms should be better able to predict future interest rates. Auditors claimed that the state lost money because of early redemption of some bonds, an assessment Keenan has challenged.

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UPDATED: Shoffner charged with pie-box delivery of kickbacks from securities salesman; released after hearing

Max Brantley — Mon, 20 May 2013 10:29:00 -0500

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.

Following is my shorthand of notes from David Koon's reading of the complaint over the phone:

The FBI developed a confidential source in January 2012. An employe of the office and a former employee of the office ultimately cooperated with FBI as confidential sources. FBI was advised Shoffner was using one broker over others, not following historical investment practices. Confidential source stated Arkansas holds $3.5 to $4 billion portfolio, including $1.5 billion in bonds. Source said historically treasurer's office had used about 10 brokers to execute bond orders. Source stated distribution had been relatively even. Mid-2011, source noted a major shift in allocation to one particular broker. Confidential source 2 stated that a confidential source, a broker not otherwise identified, invested the largest portion of state's bond portfolio.

In 2011, confidential source 2 confronted Shoffner about apparent favoritism. Shoffner responded, "They've done nothing for me." Source 2 also confronted the broker about apparent favoritism. And the source said, "I have been very good to Martha."

On Jan. 18, 2013, the FBI contacted the broker. The broker said he/she [the construction used in the complaint] had given two campaign contributions to Shoffner. First was a $2,000 contribution at a campaign event. The second was in the form of a campaign watch paty sponsorship in the form of $4,700 cash covering all expenses related to watch party.

The day before the broker was interviewed by the FBI, the source was contacted by employee of treasurer's office and instructed to go to back door at 11 a.m. Source was met by another employee and Shoffner. After employee left, Shoffner told source, "You gave me no cash and you just sponsored the watch party." It became clear to source that Shoffner kept the cash he provided the night of the watch party event.

In the fall of 2009, the broker was asked by Shoffner for larger gifts. She was "comfortable" asking for larger gifts because the source had been giving Shoffner smaller gifts prior to that time.

In 2009, Shoffner asked confidential source to purchase property for her in Little Rock. Source did not do so because Shoffner would be living on property and her name would be on paperwork for purchase of the property. After source didn't purchase property, Shoffner wanted $1,000 a month to pay her rent in Little Rock. The source didn't think it would be a good idea to meet on a monthly basis because it would look suspicious. Source recommended that they meet every six months. Source said the arrangement was for the duration of Shoffner's term in office. The source remembered six payments, starting in late 2009 or mid-2010. The source recalled payments were made, two each, at the state Capitol, her home in Newport and apartment in Little Rock, the most recent last December. That amounted to six payments of $6,000 each, in addition to the watch money party. The payments were generally in $100 bills.

In 2012, the source begin placing the payment — rolled up and sealed — in a pie box. This was done on the last two payments, both at Shoffner's Newport home.

The source began receiving more of the state's bond business after the source began making the payments.

FROM A CONSENSUALLY RECORDED CONVERSATION:

On January 19, 2013, Source met with Shoffner in Newport. They discussed the $6,000 payments. She said she had not told anyone about them. She said she told Legislative Audit in Sept. 2012 she didn't accept anything from Source 1. She said nothing in her finances would show anything different. The source asked if any other broker was doing what the source was doing. She said no other broker paid cash to her. Records show no other broker enjoyed such an increase in business.

The source talked to Shoffner about spending the cash. She said no one had questioned her about her spending of $100 bills.

May 9, Shoffner called the source, who recorded the conversation. She inquired about obtaining a loan to buy property next to her house in Newport. She wondered if someone else could bid on the property and keep her name secret.

The source suggested a meeting May 18 at Shoffner's house in Newport. Shoffner agreed to the meeting, approximately six months after the last meeting. The source took $6,000 provided by the FBI to make another payment similar to those made before.

May 18, the source and Shoffner met in Newport. The source was wired to transmit or record their conversation. The $6,000 was rolled up and placed in a pie box. During the meeting, the source gave the box to Shoffner. After the source left, the FBI executed the search warrant. The $6,000 was located in a cigarette pack in Shoffner's kitchen. She told agents where she'd placed the money.

Shoffner in an interview admitted to receiving $6,000 payments. She still had some from the last payment and provided it. She admitted that she knew it was wrong.

The charge said she conspired to extort money as a public official and transferred state business to the source in return.

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