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Mayes investigating Hobbs after GOP accuses gov of ‘pay to play’


Mayes investigating Hobbs after GOP accuses gov of ‘pay to play’

Jun 07, 2024 | 3:42 pm ET
By Jerod MacDonald-Evoy
Mayes investigating Hobbs after GOP accuses gov of ‘pay to play’
Photos by Caitlin Sievers & Gloria Rebecca Gomez | Arizona Mirror

Arizona Attorney General Kris Mayes has opened up an investigation into Gov. Katie Hobbs at the request of a Republican lawmaker after a report revealed a group home business that donated to Hobbs’s campaign received rate increases. 

The Arizona Republic reported that Sunshine Residential Homes Inc. was approved for a nearly 60% increase in how much the Arizona Department of Economic Security pays it. The rate increase came after Hobbs and the Arizona Democratic Party received hundreds of thousands of dollars in donations from the company and its executives, including some donated after her election win. 

The Republic reported that Hobbs received $200,000 after her election win, with half going to her inauguration fund. Sunshine Residential Homes gave the Arizona Democratic Party and the Hobbs campaign another $200,000 during her 2022 run for governor. 

Republican lawmakers reacted to the news, calling it a “pay to play” scheme. Sen. T.J. Shope, R-Coolidge, this week sent a letter to Mayes requesting that the AG’s Office investigate the matter. Late Thursday, a spokesman for Mayes confirmed that the office would be investigating the matter, noting that state law requires investigations into all such complaints. He declined to comment further. 

A spokesman for Hobbs said the governor had done nothing wrong and blamed partisan politics for the AG’s investigation.

“Just like past investigations instigated by radical and partisan legislators, the administration will be cleared of wrongdoing,” Christian Slater said in an emailed statement to the Arizona Mirror. “Governor Hobbs is a social worker who has been a champion for Arizona families and kids. It is outrageous to suggest her administration would not do what’s right for children in foster care.” 

Shope, in his letter to the AG, said he was concerned that the Republic’s reporting raised “serious public corruption questions that could implicate several state laws.” Shope cited bribery, fraud, conflict of interest, illegal use of state monies and possible violations of the state procurement code among his concerns. 

“I am deeply disturbed by recent reports in the media outlining what can only be described as a pay-to-play scheme between Governor Katie Hobbs’ Office, the Arizona Department of Child Safety, and political donors,” Shope wrote in his letter. “Elected officials are bound by an oath to uphold the laws of our state and be prudent stewards of taxpayer money.” 

“The Criminal Division of the Attorney General’s Office is statutorily authorized to investigate the allegations and offenses outlined in your letter,” AG Chief Counsel Nick Klingerman said in response to Shope’s letter. “To that end, the Attorney General’s Office will be opening an investigation.”

Mayes’ office also sent letters to Maricopa County Attorney Rachel Mitchell and Arizona Auditor General Lindsey Perry. Shope had requested that MCAO investigate the matter, as well, and the Auditor General’s Office offered assistance to MCAO, according to the letters. Mayes’ letter asks the two agencies to step back and let the AG conduct the investigation. 

“It would not be appropriate or in the best interest of the state to conduct parallel investigations into the same matter,” the letter to MCAO says. “Furthermore, a separate process conducted by the MCAO could jeopardize the integrity of the criminal investigation that my office will now proceed with.” 

Mayes’ letter to Perry says that the assistance of the Joint Legislative Audit Committee, which can direct the auditor general,  is not needed “at this time.” 

“Should that change, I will reach out and inform you and Representative (Matt) Gress,” Mayes wrote, referring to the chairman of the audit committee. “I am certain the same cooperation and assistance offered to the MCAO will be extended to the Attorney General’s Office as we gather facts and information pursuant to our criminal investigation into this serious matter.”

The CEO of the company in question, Simon Kottoor, was on Hobbs’ inaugural committee. Both he and his wife donated the maximum amount to Hobbs’ campaign, according to the Arizona Republic. Hobbs also attended a private event at Kottoor’s mansion in Paradise Valley. 

The report also found that the company was paid the highest rate out of all group home service providers, and the company made one of its biggest donations to Hobbs after initially being denied a rate increase. 

The company has said in statements to the press that it supported Hobbs due to her past work as a social worker. The company also has courted controversy before when a 9-year-old boy had died in their custody. 

***UPDATE: This story has been updated with additional information