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Arizona AG to Probe Allegations Against Governor Katie Hobbs

 June 8, 2024

In a developing story, the Arizona Attorney General's Office has launched an investigation into allegations against Governor Katie Hobbs concerning a possible "pay to play" scheme with Sunshine Residential Homes.

The investigation centers on financial contributions made by Sunshine Residential Homes to Gov. Hobbs and the subsequent increase in state funding the company received, as the Post Millennial reports.

Investigation Initiated by Arizona AG

On June 5, the Arizona Attorney General's Office, led by Kris Mayes, acknowledged the start of an investigation focused on Hobbs, who is alleged to have engaged in a "pay to play" arrangement, with substantial financial donations coming from Sunshine Residential Homes, a state-funded group home company.

The investigative letter was directed to the concerned parties, stating, "Thank you for your referral dated June 5, 2024, regarding Sunshine Residential Homes." According to the correspondence, the Attorney General's Criminal Division has the statutory authority to "investigate the allegations and offenses" presented. Consequently, the office is proceeding with an official inquiry.

Donations and Funding Increases

At the heart of the investigation is a significant financial transaction. Sunshine Residential Homes contributed $100,000 to Hobbs' inaugural fund in December 2022. Official records, however, show this contribution was made in February 2023.

Additionally, Sunshine committed $200,000 to the Arizona Democratic Party shortly before the 2022 election, amplifying the scrutiny on Hobbs' campaign finances and potential conflicts of interest.

Sunshine's CEO, Simon Kottoor, played an active role in Hobbs' inaugural committee and was an avid supporter of her campaign. His involvement and financial contributions are under careful examination.

Controversial Rate Increase Requests

In February 2023, the Arizona Department of Child Safety (DCS) initially denied Sunshine's request for a 20 percent rate increase for their services. This denial took place shortly before the $100,000 donation to a "dark money" group linked to Hobbs.

Just a few months following this sizable contribution from Sunshine, the DCS granted a 30 percent rate increase to the company. This sudden approval has raised questions given the previous denial's proximity to the donation event.

Further adding to the controversy, Sunshine received an additional 20 percent rate increase this year. These consecutive raises in funding are viewed by some as potentially suspicious and are being scrutinized as part of the investigation.

Political Reactions and Opinions

Republican state Sen. TJ Shope was among the first to vocalize concerns, previously calling for a thorough review of the situation.

In response to the allegations and the subsequent investigation, Hobbs' spokesperson, Christian Slater, defended the administration. He addressed previous similar incidents by stating, "Just like past investigations instigated by radical and partisan legislators, the administration will be cleared of wrongdoing."

Slater further added that it would be "outrageous to suggest her administration would not do what's right for children in foster care," emphasizing the government's commitment to their duties and responsibilities.

Focus on Sunshine Residential Homes

Sunshine Residential Homes operates as a for-profit organization, receiving its finances entirely through state-awarded contracts. The nature of these contracts and the subsequent donations have prompted additional questions about the company's interactions with state officials.

Hobbs, while receiving this financial support, also saw Kottoor actively participate in her political endeavors. One notable instance occurred shortly before her election, where Sunshine awarded her an honor, highlighting the close relations between the administration and the company.

The timing of these increased fundings closely following major donations from Sunshine to groups associated with Hobbs has been a significant point of contention. This alleged "pay to play" activity is at the core of the probe initiated by the Attorney General.

Next Steps in the Investigation

The Attorney General's Office will now pursue a detailed inquiry, utilizing its criminal division to examine all relevant facts and potential statutory offenses. This investigation aims to uncover whether any misconduct occurred and to ensure governmental integrity and transparency.

As the investigation proceeds, more details are expected to surface, shedding light on the extent of connections between Sunshine Residential Homes and Hobbs' administration.

Conclusion of the Investigation's Scope

The ongoing inquiry into Gov. Katie Hobbs underscores the importance of probing political donations and their possible influence on state operations.

In summary, the investigation highlights potential conflicts of interest and emphasizes the need for transparency in government dealings, particularly involving financially influential state contractors.