LITTLE ROCK — Former state Treasurer Martha Shoffner went to federal court to plead guilty to a public corruption charge Friday, but the judge rejected the plea when Shoffner refused to say she took cash payments from a broker in exchange for shifting state bond business to him.
U.S. Attorney Chris Thyer told reporters later that his office would proceed with an indictment against Shoffner and that he anticipated it would include additional charges to the extortion allegation in a complaint initially filed against her.
Thyer said he was surprised by the events in U.S. District Court.
"It was certainly unexpected," he said. "We certainly anticipated that the plea would go through."
Leaving the federal courthouse, Shoffner told reporters she just could not agreed to some of the provisions in the plea agreement.
"There were just some questions that I wasn’t comfortable with," she said. "I just want to tell the people of Arkansas I apologize."
Shoffner resigned May 21 amid federal allegations of extortion. Gov. Mike Beebe on Wednesday named Charles Robinson, former head of the state Division of Legislative Audit, to complete Shoffner’s term.
Shoffner, 68,was accused of taking at least $36,000 in kickbacks. FBI agents arrested Shoffner on May 18 at her Newport home after an informant delivered $6,000 in cash to her in a pie box. She resigned in a letter to Beebe three days later, a day after her first federal court appearance.
Before U.S. District Judge Leon Holmes on Friday, Shoffner was to plead guilty to a single felony count of theft or bribery concerning programs receiving federal funds. The crime includes corruptly soliciting, demanding or agreeing to accept anything of value intended to influence or as a reward in connection with any business, transaction or series of transactions of such organization, government or agency involving anything valued at $5,000 or more.
She faced up to 10 years in prison and a fine of up to $250,000.
She admitted to taking the money during questioning from the judge.
"We’re you taking money from this broker," Holmes asked.
"Yes, but it was offered, I didn’t demand it," Shoffner replied.
"And did you direct business from the state to that broker?" Holmes asked.
"Not intentionally," Shoffner replied.
"Did you intend to be influenced or rewarded in connection with money that you received," Holmes asked. "What was the purpose of the money?"
"It was for rent, apartment rent," she said.
"Did it have anything to do with your decisions as the treasurer," the judge asked.
"No," Shoffner replied.
Holmes then told Shoffner’s lawyer, Chip Banks, that he did not think she was admitting to all of the elements under the statute because she wasn’t willing to admit that she "intended to be influenced by this money that had something to do with the decisions as treasurer."
Banks agreed with the judge and, after conferring briefly with Shoffner, told Holmes his client’s "answers were truthful and she wants to be indicted and stand trial."
Outside the courthouse, Banks said he had expected Shoffner to plead guilty.
"I was surprised, but I’m pleased with the court’s inquiry," he said. "I’m pleased with her decision. I know she’s very embarrassed about all of this but, this is an opportunity for her to continue to exercise a constitutional right to test the proof, so we’ll go from there."
Banks said he had never had a client have a change of heart during a plea hearing.
In December, the Legislative Joint Audit Committee requested a criminal investigation into the way Shoffner’s office sold bonds, including her decision to sell bonds before they matured, resulting in an overall economic loss to the state of $434,249.
The bond transactions with St. Bernard Financial Services of Russellville were made by one broker, Steele Stephens.
Shoffner told the legislative panel in December that she and Stephens’ father, Steve Stephens of Newport, were longtime friends. She previously told the committee that she did not know Steele Stephens was his son until after she and Steele Stephens met at the state Capitol to discuss state investment opportunities.
Shoffner claimed she never received any personal financial benefits St. Bernard Financial or any other firm with which her office had dealings. She did say the father of the broker had donated to her campaign and helped organize a campaign fundraiser on her behalf.
Steele Stephens resigned from St. Bernard Financial Services last week.
Shoffner became the first state constitutional officer to resign from office under pressure since former Gov. Jim Guy Tucker stepped down in July 1996 following his conviction on federal charges in the Whitewater investigation of Bill and Hillary Clinton’s business dealings in Arkansas.