Legislative Leaders Call on Hobbs To Transfer Controversial Inaugural Fund Surplus To The State

katie hobbs
Katie Hobbs frequently mocks Arizona voters who question the integrity of the election process. [Photo via AZ Secretary of State social media]

On Thursday, House Speaker Ben Toma and Senate President Warren Petersen called on Governor Katie Hobbs to turn over to the State the surplus money collected for her controversial inaugural fund. Hobbs used state resources to collect nearly $1.5 million from mostly deep-pocketed donors, including Pinnacle West Capital Corp., the owner of Arizona Public Service Co. (APS), ostensibly to cover the costs of her inauguration.

As previously reported by the Arizona Daily Independent, The Katie Hobbs Inaugural Fund, registered with the Arizona Corporation Commission on Dec. 13 by Hobbs’ campaign manager Nicole DeMont as a 501(c)(4) nonprofit social welfare organization, spent less than $210,000 on the event.

Toma and Petersen sent a letter urging Hobbs to commit the balance of her $1.3 million inaugural fund proceeds to the state, as past governors have:

Dear Governor Hobbs,

It is our understanding that the inauguration costs and expenses totaled $207,000, leaving a balance of roughly $1.3 million in the Inaugural Fund. As you may know, when former Arizona Governors have found themselves with excess private funds that were collected to pay for inauguration events, they used those funds to further or promote state interests. This is unsurprising; Arizona law has long allowed the Governor to “accept and expend public or private gifts, grants, donations or monies for the purpose of promoting the interests of the state or to promote and encourage citizen public service to the state.” A.R.S. § 41-1105(A).

When private money is deposited in the Governor’s Protocol Fund through § 41-1105, those funds become public money that must be spent for the broad purposes listed in § 41-1105(A). See A.R.S. § 41-1105(B), (D); State v. Mecham, 173 Ariz. 474, 481 (App. 1992). And the Protocol Fund comes with the added benefit of de facto transparency, which promotes accountability to the people of Arizona. See A.R.S. § 41-1105(E) (requiring an annual written report including “a detailed listing of expenditures” from the Protocol Fund).

We urge you to follow in your predecessors’ footsteps and transfer any monies left over in the Inaugural Fund to the Protocol Fund. Given this historical practice, as well as the Inaugural Fund’s own descriptive title, Arizonans would have reasonably anticipated that any excess funds would be used for state interests. In any event, given the public resources that were utilized to solicit funds for the Inaugural Fund and to host the inauguration, it would be inappropriate to utilize any monies in the Inaugural Fund to influence an election. See A.R.S. § 16-192 (prohibiting use of public resources to influence an election).

We trust you will be mindful of these historical and practical considerations, and that you share our goal of prioritizing Arizonans’ interests above those of special interests.

Following Hobbs’ admission that she personally approved the plan to use dark money to fund her inaugural events, Arizona attorney Tim La Sota filed a public records request with the Governor’s Office requesting information related to the dark money sources.

Hobbs had refused to disclose how much her inauguration ceremony cost and how much her dark money sources paid for it.

Hobbs’ decision stunned both critics and supporters due to the fact that she campaigned as a staunch supporter of transparency in campaign finance matters and promised transparency in her administration.

Information Sought About Dark Money Used To Fund Hobbs’ Inaugural Events

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