- Brian Chilson
- AFTER THE VERDICT: Shoffner.
The trial of former Arkansas Treasurer Martha Shoffner had few surprises.
I go to press as jury deliberations continue. (A jury found Shoffner guilty on all 14 counts.) But ... As made clear months ago, Shoffner sent more than a half-billion dollars worth of state bond investments to a single broker, Steele Stephens, a rep for a tiny firm operating out of a house in Russellville. It was worth $2.5 million in commissions, a lot of money for selling the same stuff as competitors (and sometimes churning it without profit for the state.)
Stephens testified that he paid Shoffner $6,000 every six months. His last payment, a roll of C-notes in a pie box delivered to her home in Newport, was recorded on hidden video camera for FBI agents waiting outside.
There wasn't much for defense lawyers to work with, which could explain why a plea bargain was initially struck in this case, then withdrawn on second thoughts by Shoffner. The defense tried, arguing that the cash amounted to "improper" campaign contributions, but not bribes and not interstate commerce worthy of federal prosecutors' attention.
Legal distinctions aside, the man on the street can be forgiven for seeing a quid pro quo and smelling something rotten under the Capitol dome.
But let's also consider some other questions. Is it illegal for people who receive commissions for state bond business to give hefty campaign contributions to the person running for treasurer and pass out other tangible gifts? It is not. Does it smell? It does. Has it been done forever? Yes. Have treasurers done business with their friends? They have.
Is it legal to take the treasurer out to dinner? Up to $100 per dinner, it is. In theory, a state vendor could buy dinner for the treasurer every night of the week. And if each meal costs $100 or less, the politician would have nothing to report and no reason to fear the long arm of the law. This same rule applies as well to the gifts — hams, turkeys, football and concert tickets — lavished on the staff of the treasurer's office.
A variety of efforts have been undertaken to eliminate pay-to-play in the bond business. You don't see heads of retirement systems golfing in Ireland courtesy of Wall Streeters like you once did. Legislators still have their ways of nabbing nominally official trips to exotic foreign spots, but it does seem there's been some reduction in excesses. A favorite among bond daddies used to be taking municipal officials (and sometimes girlfriends) to champagne-drenched bond "closings" in New York. Beats heck out of a simple bond issue check delivery in Dogtown.
The question that nags me is this: If Martha Shoffner and a willing bond broker had a wink-and-nod deal in which he got millions in business and she got an untaxed cash pay supplement, surely somebody else in government has thought about doing the same thing. And maybe doing it a bit more discreetly. It wouldn't be hard to be smarter than Martha Shoffner. She displayed her financial ignorance to staffers and further made enemies of them by treating them abusively. Even after her favoritism had been reported in news media — even after Legislative Audit and Republican legislators were baying after her — she couldn't quit taking deliveries on Steele Stephens' tasty pies. But for that one apple pie too many, she'd still be treasurer and none would be the wiser.
Bottom line: We shouldn't be electing the person who makes the final decision on administration of billions in state investments. The corruption begins in the campaign season and it's all too easy to get away with that and worse unless somebody unduly stupid or greedy comes along.