Judge rejects guilty plea from ex-Ark. treasurer

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Former Arkansas State Treasurer Martha Shoffner leaves the Federal Court House in Little Rock, Ark., after a hearing Friday, May 31, 2013. A judge rejected a guilty plea from Shoffner who is accused of accepting cash from a broker. (AP Photo/Danny Johnston)

LITTLE ROCK, Ark. (AP) — Former Arkansas Treasurer Martha Shoffner admitted Friday that she accepted $36,000 from a broker who did business with the state, but a federal judge rejected her attempt to plead guilty to a crime because she denied allegations that she intentionally steered business to the broker's firm.

In an impromptu hearing, Shoffner acknowledged taking a series of $6,000 cash payments — at times delivered in a pie box — from a broker who is cooperating with federal investigators. She told U.S. District Judge Leon Holmes, however, that she didn't deliberately direct an increasing share of the state's bond business to the broker.

Shoffner, 68, faced charges of 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. Those charges carry maximum penalties of 20 years in prison and up to a $250,000 fine.

She was set to plead guilty Friday to a similar charge until Holmes asked her what she had done.

"There were just some questions asked that I had problems with. I'm just so sorry this is all happening," Shoffner told reporters after the hearing. "I want to tell the people of Arkansas that I apologize. But there were some questions asked that I wasn't comfortable with."

When Holmes asked Shoffner if she accepted payments from the broker, she responded: "Yes, but it was offered. I didn't demand it." Shoffner also told the judge the payments were not related to her decisions as treasurer.

Under plea bargains, defendants are required to admit key elements of crimes. Holmes cautioned Shoffner to be truthful.

"Before I would accept it, I would have to know you're admitting to all of the elements the government would have to prove in order to convict you," Holmes told Shoffner. "I believe one of those elements is that you intended to be influenced by this money, that it had something to do with the decisions you were making as treasurer. If you deny that, which you have now under oath, then I cannot accept your guilty plea."

Prosecutors had said after her May 18 arrest that Shoffner steered more business to the broker because of the payments the ex-treasurer received.

After the hearing, U.S. Attorney Chris Thyer said he was surprised the plea deal fell through. Thyer said he will seek an indictment against the former treasurer with additional charges.

"At one level I'm certainly disappointed the plea didn't go through because I certainly anticipated that it would," Thyer said. "On another level, I'm not disappointed. I truly believe that everyone is entitled to a trial. If that's what this case calls for, that's what we intend to do and that's have a trial."

Shoffner's attorney, Chuck Banks, also said he didn't expect the plea to fall apart.

"I know she's very embarrassed about all this, but this is an opportunity for her to continue to exercise her constitutional right to test the proof," Banks said.

An FBI affidavit filed in federal court alleges that a 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 his or her cooperation.

Legislative auditors last year questioned Shoffner's selling of bonds before they matured, a practice that they said cost the state more than $434,000 worth of earnings.

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

Shoffner, a Democrat, was first elected treasurer in 2006 and won a second term in 2010. Facing pressure from fellow Democrats as well as Republicans who threatened impeachment proceedings if she didn't resign, Shoffner stepped down last week.

Beebe on Wednesday appointed former Legislative Auditor Charles Robinson to serve the remainder of Shoffner's term, which ends in January 2015. Robinson is barred from running for the post next year since he was appointed to it.