Arkansas Treasurer Martha Shoffner, 68, has been arrested and is being held for the U.S. Marshals office under a charge of extortion.
The arresting agency is the Federal Bureau of Investigation (FBI) and she is in the Pulaski County Jail.
U.S. Attorney Chris Thyer was contacted by phone on Saturday but would not discuss details.
“I can’t comment on anything,” Thyer said.
Sources tell Talk Business that a detailed complaint will be filed on Monday.
The FBI confirmed to Little Rock television station KARK that Shoffner is being held on a charge of “Extortion Under Color of Official Right under the Hobbs Act.”
The Hobbs provision suggests that a public official can be charged with extortion under certain circumstances. The government “need only show that a public official has obtained a payment to which he [or she] was not entitled, knowing that the payment was made in return for official acts,” said a 1992 U.S. Supreme Court ruling. (Link here for more info on extortion under the Hobbs Act.)
In December 2012, a state legislative panel recommended that a criminal investigation take place into the practices of Shoffner as State Treasurer. At the time, state lawmakers said they would ask the Division of Legislative Audit to consider a law enforcement investigation of questionable bond transactions in Shoffner’s office.
Shoffner, a Democrat, has been questioned about the early sale of multiple bond transactions in her office surrounding a Russellville financial firm known as St. Bernard Financial Services. Shoffner has denied any wrongdoing.
At issue are millions of dollars in bond transactions that could have shortchanged the state hundreds of thousands of dollars or more in earnings due to their early sale.
Shoffner said there are changes being implemented in her office for purposes of “rectifying everything.”
Shoffner’s most recent Statement of Financial Interest discloses only her state salary and her federal social security as income. She did not disclose any other sources of income or receiving any gifts which is requested of public officials receiving any amount valued over $100.
Updated info: Saline County Circuit Clerk Dennis Milligan, who has filed to form an exploratory committee for a race for Arkansas State Treasurer in 2014, called on Shoffner to resign. Milligan, who is also a former chairman of the Republican Party of Arkansas, has said he will announce for the Treasurer’s office on May 29.
In a statement released Sunday afternoon, Milligan said Shoffner should be considered innocent until proven guilty, and that she deserves her day in court.
“However, I suspect that when she does have her day in court, Arkansans will not be happy with what they learn about the operation of that office. The charges against Ms. Shoffner involve extortion under color of official right,” Milligan said in the statement. “While she is entitled to a trial by an impartial jury, Ms. Shoffner’s ability to serve as Treasurer will be so impaired that she will not be able to be the kind of public office holder Arkansas deserves.”
A spokesman for Gov. Mike Beebe’s office declined to comment saying he will wait to see the indictment details on Monday.
Shoffner does not have to resign her office based solely on the charges she is expected to face; however, she may resign under political pressure. Shoffner is serving her final term as State Treasurer and is term-limited for the office.
If she is convicted of the pending charges eventually, she would be forced to resign from office. A Shoffner resignation would trigger a process by which Gov. Mike Beebe (D) would name a replacement to serve out the rest of her term of office, which ends in January 2014.