Local & Regional News
12:10 am
Tue March 11, 2014

Defense To Begin Presenting Its Side In Martha Shoffner Trial

Martha Shoffner
File photo of Martha Shoffner leaving the federal courthouse in Little Rock last week.
Credit David Goins / KARK-TV

The prosecution rested Monday in former Arkansas Treasurer Martha Shoffner’s corruption trial and her attorney said the defense will mostly likely conclude Tuesday.

Defense attorney Chuck Banks told U.S. District Court Judge Leon Holmes that Shoffner will not testify, but that he planned to call three defense witnesses.

Monday was the fourth day of Shoffner’s extortion and bribery trial. She is accused of 14 counts of extortion and bribery for allegedly accepting cash payments from a broker to whom she allegedly steered state investments.

Shoffner, who resigned May 21, had been under investigation for more than a year because of suspected bond transactions in her office. Federal authorities took her into custody at her Newport home May 18 after an informant delivered a $6,000 cash payment in a pie box.

On Monday, the broker, Steele Stephens, testified he paid Shoffner $36,000 over a three year period and in return his bond business rose, adding he made about $2.5 million in commissions on the sales during that time. Stephens was working for Russellville-based St. Bernard Financial Services.

Stephens, who also was the informant who went to her home on May 18, has been granted immunity for his testimony against Shoffner in the federal trial.

During questioning from Banks, Stephens said he gave Shoffner the money, payments of $6,000 every six months, because he felt sorry for her.

“I thought she needed it,” he said, adding that her mother had just died, she had lost her apartment and she had lost access to her state vehicle. Stephens said he never saw the payments as a bribe, but knew they were wrong.

Banks stressed during his cross-examination of Stephens that the broker and Shoffner were not accused of stealing any state money.  In fact, the state made money in the trades Stephens made.

Stephens did however admit under questioning from federal prosecutors that his business with the state did increase during the time period in which he was paying her.

“I knew it was wrong,” Stephens said in response to a question from Banks.

Jurors on Monday were also shown and an hour-long video of the May 18 meeting between Shoffner and Stephens. On the recording from a hidden camera worn by Stephens, jurors saw Shoffner letting him into her Newport home with a pie box containing an apple pie and $6,000 in cash. The video also showed Shoffner removing the money from the box.

In the video, Shoffner can be heard talking about the legislative audit meetings in September and December 2013, in which she was asked by state Sen. Jason Rapert, R-Conway, if she ever took any money from Stephens.

"I said no and I'll go to my grave with that," Shoffner said.

Stephens asked Shoffner if he would ever be able to do business with the treasurer’s office again. Shoffner said she was looking forward to the remainder two years in office and that she expected his business to pick up when the publicity over the audit had died down.

After the video was shown, an FBI agent testified that agents served Shoffner with a search warrant just after Stephens’ visit on May 18 and that the $6,000 was found in an empty cigarette carton in a drawer in the kitchen. The agent said that another $4,020 was found in the drawer of a cabinet in the living room.

Katherine Black, a forensic accountant with the FBI, testified Monday that Stephens was doing substantially more in state business than other brokers. Jurors were shown a chart tracking his business with the payments he was providing her. The chart showed that at one point he had $600 million in investment inventory, while the broker closest him had $170 million. Also, between Sept. 2009 and late 2012 he had at least three trades of more than $100 million on a single day. No other broker had one $100 million trade on a single day.

Also Monday, Hunter Johnson, investment manager for the treasurer’s office, testified that on several occasions he suggested that Stephens be removed from the list of brokers used by the office.

“Every time I approached by Miss Shoffner…  I was told we’re not going to remove anybody from the list. She refused to do it,” he testified.