Arizona Republicans continue to question the investigation into the alleged pay-for-play scheme involving Gov. Katie Hobbs and Sunshine Residential Homes.
In August, Attorney General Kris Mayes said Hobbs would not face criminal charges after investigating whether Sunshine Residential Homes’ political donations to Hobbs and the Arizona Democratic Party impacted the state’s approval of the company’s rate increases. Both Mayes and Hobbs are Democrats.
In 2022, Sunshine Residential Homes donated $200,000 to the Arizona Democratic Party and $100,000 to Hobbs’ inauguration fund.
Two years later, the private foster-care provider for Arizona children gave another $100,000 to the Arizona Democratic Party.
After Sunshine Residential Homes’ first round of donations, its bed-per-day rate went from $149.99 to $195 in 2023, according to the Attorney General’s Office.
In 2024, after its second donation to the Arizona Democratic Party, the company’s rate increased from $195 to $234, the office notes.
From 2019 to 2024, Sunshine Residential Homes’ bed-per-day rate rose 56%.
Mayes’ office legal analysis said it did not find any evidence showing a “pay-for-play scheme” involving the governor and the company.
Arizona GOP Chair Sergio Arellano said the question is not about “what happened between Sunshine Residential Homes and the Hobbs administration,” but whether the “attorney general’s investigation” got to “the bottom of it.”
After Mayes’s office released its findings, House Speaker Steve Montenegro, R-Surprise, sent a letter to Mayes asking why the legal analysis left out information that Sunshine Residential Homes CEO Simon Kottoor allegedly offered to recommend that Hobbs keep Mike Faust, then the director of the Arizona Department of Child Safety, in the same position if he approved a higher payment rate for the company.
Kottoor allegedly told Faust this in the fall of 2022, before Hobbs took office.
She eventually chose David Lujan as DHS director in March 2023.
Former DCS Deputy Director Shalom Jacobs came forward last week and corroborated Faust’s account.
U.S. Rep. Andy Biggs, R-Gilbert, said there is a “huge problem” with how Mayes handled the investigation into Hobbs.
Biggs, who’s running against Hobbs in the Nov. 3 gubernatorial race, told The Center Square that “it seems like” Mayes is covering up for Hobbs.
Chad LeBeau, Senate President Warren Petersen’s campaign director for his attorney general race against Mayes, said the current attorney general “had one job: Investigate potential bribery in an alleged pay-to-play scheme, and her report omitted key testimony that undercuts her conclusion.”
“Two former DCS officials have raised serious concerns about how Sunshine’s rate increases were approved, testimony Mayes chose to leave out,” LeBeau told The Center Square in an email.
LeBeau added that the attorney general “should have interviewed the governor.” Hobbs did not sit down for an interview with Mayes’ office, instead submitting two written statements through her legal team.
“This investigation should not be closed,” LeBeau said. “Arizonans deserve an attorney general willing to follow evidence of alleged pay-to-play wherever it leads, not one who leaves it out to protect her own party.”
Richie Taylor, the communications director for Mayes’ office, said the Attorney General’s Office “brings charges in cases when a reasonable likelihood of conviction and proof beyond a reasonable doubt exists based on evidence that would be admissible under Arizona’s Rules of Evidence.”
He said Jacobs “was not a witness to the alleged conversation, and hearsay is not admissible under Arizona’s Rules of Evidence.”
“Nothing the Republicans shared changes the fact that no evidence needed to meet those standards exists in this case,” he told The Center Square in an email.
According to Taylor, “no serious prosecutor would bring charges in this case given the lack of evidence and one-sided accounts from witnesses with severe credibility issues.”
“These legislators have now resorted to trying the case in the media,” Taylor said. “It’s past time for the Republicans to explain just what exactly they are investigating, under what authority, and the amount of tax dollars they are spending on a partisan stunt during an election season.”
When asked about these allegations at a press conference this week, Hobbs told reporters that she did not have “information about these conversations.”
“I was not involved in the decision, and the Attorney General’s office confirmed that,” the governor said.
Arellano said the Arizona Auditor General’s Office is still working on this investigation with the assistance of the Maricopa County Attorney’s Office.
Taylor noted Mayes’ office “has coordinated with the auditor general, shared resources and conducted joint interviews.”
If elected governor, Biggs said he would encourage the attorney general to look into the matter “more thoroughly.” He noted the Governor’s Office does not have the power to investigate these matters without help from the Legislature.
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