- Associated Press - Friday, March 7, 2014

LITTLE ROCK, Ark. (AP) - A bond broker who managed a large share of Arkansas’ investments said in federal court Friday he felt sorry for the former state treasurer when she was going through a rough patch and gave her money to help her with her troubles.

Martha Shoffner, 69, is named in 14 counts alleging bribery and extortion. Prosecutors allege she directed a significant amount of the state’s business to broker Steele Stephens in return for $36,000.

In testimony Friday, Stephens said Shoffner had a number of problems that engendered his sympathy and prompted a monetary gift he delivered at Shoffner’s Capitol office. Her mother had died, and she had to mortgage her house, give up her state car and move out of her Little Rock apartment, he said.

“I just felt sorry for her and thought I would help her,” Stephens said. “I figured it would probably increase the possibility I would be treated favorably.”

In the afternoon, jurors listened to a two-hour recording from Jan. 19, when Stephens wore a recording device provided by the FBI. The two met at Shoffner’s home and spoke outside because she was worried that her house might be bugged.

In a conversation laced with obscenities, they pledged to not reveal to investigators that Stephens was paying off Shoffner.

“I’ll go to my (expletive) grave with that,” Shoffner said.

Stephens said he would “not say (expletive) about (expletive) because that’s the kiss of death, right there.”

As Shoffner was greeting Stephens after he arrived at her home, she said, “I feel like a (expletive) criminal.”

Shoffner told Stephens she’d never received $2,000 in cash that he donated at a campaign event and they both said they’d keep quiet about $4,000 he gave at another event that Shoffner allegedly didn’t report.

“You just gotta remember, you can’t trust anybody,” Stephens said on the recording. As it played, he was perched on the witness stand as Shoffner listened from the opposite side of the courtroom. She showed no visible reactions.

They talked about how they wanted the controversy to blow over. Shoffner said she’d made changes at her office, including buying software to help analyze trades. Auditors and regulators found no state money was missing, a point Shoffner’s attorney, Chuck Banks, has made repeatedly to the jury.

Shoffner said she felt she was treated unfairly by legislators, who criticized her for selling bonds before they matured, thus preventing the state from earning $434,000 in interest. “They’re mean,” she said.

Shoffner said that she expected the storm clear by May, when the Joint Audit Committee’s next meeting was scheduled.

Instead, that was the month when Shoffner was arrested, jailed for two nights and was pressured into resigning.

Near the end of the conversation, Shoffner, perhaps facetiously, said to Stephens, “I think you are wired.”

“No, I’m not wired,” Stephens replied, and talked about lifting up his shirt.

The talk circled back to the cash payments, and Stephens again pledged his silence, though he was already working with the FBI.

“I’m a man of my word,” Stephens said.

Witnesses who testified Thursday said Stephens managed a larger share of the state’s investments than other brokers. Stephens is not affiliated with the Stephens Inc. investment house in Little Rock.

At times, Stephens answered questions reluctantly, particularly about his motivation, though prosecutors have granted the broker immunity.

Under questioning by Assistant U.S. Attorney Charles Ray White, Stephens said he gave Shoffner his first of six $6,000 payments as they sat alone in a conference room at her state Capitol office.

“Then I gave her a roll of $100 bills,” Stephens said. Shoffner looked up and said, “‘I hope there’s no cameras in here.’”

He said Shoffner got up and put the money in her purse.

Stephens testified that Shoffner was “paranoid” about being watched by investigators. He testified that she was concerned that SUVs with tinted windows she’d seen near her home were from the FBI.

Shoffner also was worried about her phone linking her to alleged wrongdoing, he said. Stephens purchased a per-minute cellphone - one without a plan - at Walmart so they could talk without her using her state-issued cellphone.

On the recording, they discussed that she should continue to call Stephens occasionally from her state phone to keep up an appearance of normalcy.

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