Former Subordinate Says Shoffner Ignored Warnings

John Lyon with our content partner, the Arkansas News Bureau, reports:

A former subordinate of former Arkansas treasurer Martha Shoffner testified in federal court Thursday that she warned Shoffner that placing a large portion of the state’s bond business in the hands of one broker would raise red flags with auditors, but that Shoffner shrugged off her concerns.

Testifying on the second day of Shoffner’s trial on federal bribery and extortion charges, Autumn Sanson, chief investment officer for the state treasurer’s office, said it used to be common practice for the state’s business to be divided just about evenly between brokers, with no single broker handling more than $200 million, but then Shoffner began directing a disproportionate amount of the state’s business to broker Steele Stephens.

Sanson said she warned Shoffner about drawing the attention of auditors when Stephens’ inventory reached $300 million.

“She said we could justify it,” she said.

Shoffner also did not heed Sanson’s objections when she allowed Stephens to make a $100 million trade for the state in one day or when she ordered that Stephens be given a list of the inventories of all brokers handling the state’s business, which other brokers were not provided, Sanson said.

She said Shoffner often disagreed with advice from her staff on a variety of issues, sometimes dramatically.

“She would slam her fist on the desk and say — excuse me — ‘I’m the goddamn state treasurer. I can do what I want,’” Sanson said.

That phrase led to staff members sometimes referring to Shoffner as “the GDST,” she said.

You can read more of Lyon’s report at this link.

Shoffner has been charged with six counts of extortion, one count of attempted extortion, and seven counts of receipt of a bribe by an agent of a state government receiving federal funds.  She is also facing 10 additional counts of mail fraud.