DALLAS – An Arkansas legislative panel approved a probe by consultants Hewit Ennis Knupp of investment activities by former Treasurer Martha Shoffner, who was indicted June 5 on 14 federal charges of extortion and bribery.
The Arkansas Legislative Council, which includes 20 state representatives and 16 senators, assented June 21 to a $215,000, year-long contract with the Chicago-based investment consultant proposed by Richard Weiss, director of the Department of Finance and Administration.
The consultant will provide recommendations to the General Assembly on changes to policies and procedures of the treasurer’s office, Weiss said at the session. Lawmakers will meet in February for a session limited to fiscal issues.
Shoffner resigned as treasurer May 21 after being arrested by the Federal Bureau of Investigation on May 18 at her home in Newport, Ark.
She is accused of accepting at least $36,000 from an investment broker in exchange for shifting to him a large portion of the state’s bond investment transactions.
The Legislative Audit Division said in December 2012 that Shoffner’s office lost $783,835 through eight premature bonds sales through a broker at St. Bernard Financial Services of Russellville, Ark.
The broker, Steele Stephens, was responsible for $1.7 billion of the state’s investment bond transactions since 2008. Stephens resigned has since resigned from St. Bernard Financial Services.
Shoffner is scheduled to appear at an arraignment hearing later this week before federal Judge Joe Volpe. Her attorney said Shoffner will plead not guilty to the federal charges at the hearing.
Arkansas lawmakers are reviewing Shoffner’s 2012 testimony before the Legislative Joint Auditing Committee for possible perjury. Shoffner told lawmakers at two hearings that she did not know why the broker began receiving most of the state’s investment transactions.
The treasurer’s office manages the state’s $3 billion investment portfolio of federal securities, money market funds, and certificates of deposit placed in Arkansas banks.