Arizona Gov. Katie Hobbs calls 'pay-to-play' allegation 'outrageous'

PHOENIX — Arizona Gov. Katie Hobbs said Tuesday it was “outrageous” that she was accused of a “pay-to-play” scheme allegedly involving a Democratic donor who runs group homes under contract with the State.

The Arizona Attorney General's Office announced last week that it was opening an investigation following an Arizona Republic report on ties between Hobbs and Sunshine Residential Homes.

“I am a social worker and it is outrageous that we are not acting in the best interest of children in foster care in Arizona. I always have and will always do what is best for Arizonans,” Hobbs told reporters at an event in Phoenix promoting a high school civics curriculum.

“There is an AG investigation. I am not going to make any additional comments except to say that I look forward to the conclusion of the investigation and the conclusion that we acted in the best interests of Arizona.

Where do the “pay to play” allegations come from?

Sunshine, a private company hired by the state Department of Child Services (DCS) to house neglected and abused children, made donations totaling $400,000 to Hobbs' inauguration committee and the Democratic Party of Arizona in 2022 and 2023, before and after Hobbs is elected. reported the Republic.

DCS has approved significant rate hikes requested by the group home operator since Hobbs took office, according to the state's largest newspaper, raising questions about preferential treatment.

Attorney General Kris Mayes, a Democrat, is investigating the matter after Republican Sen. TJ Shope asked him to look into what he said “can only be described as a pay-to-play scheme.”

Shope also contacted Maricopa County Attorney Rachel Mitchell, a Republican, last week about a potential investigation, as did GOP state Rep. Matt Gress.

Mitchell said the Auditor General's Office contacted her about working together on the case, prompting Mayes to tell other agencies to back off.

Mayes wrote letters to the Arizona Auditor General's Office and the Maricopa County Attorney's Office telling them it would be inappropriate to “conduct parallel investigations.”

Hobbs answered “yes” when asked Tuesday if she thought Mayes would handle the investigation fairly.

She was then asked if she thought Mitchell would do a fair job.

“I’m not going to comment on something that’s not happening right now,” the governor said.

Treasurer Kimberly Yee intervenes in the investigation

Some Republicans questioned whether Mayes could be impartial, including Treasurer Kimberly Yee, who wrote a letter to Mayes challenging the idea that the AG's office should have exclusive jurisdiction over the investigation.

“First, such an assertion is neither appropriate nor authorized by law, as these entities have separate jurisdiction to investigate this matter,” Yee wrote Monday.

Citing a “potential ethical conflict of interest” and “other relationships with officials who may have been involved in the alleged scheme,” Yee suggested Mayes should transfer the investigation to Mitchell or another county prosecutor.

Mayes responded to Yee Monday with a letter disputing the treasurer's assessment.

“As with any other investigation conducted by our office, we will follow the facts wherever they lead us. As with everything we do, we are also fully aware of our ethical obligations and have taken appropriate steps to protect the interests of all involved, including directing the Ministry of Children's Services to retain legal counsel external in this matter,” Mayes wrote to Yee.

“Finally, I will note that while you are certainly always welcome to express your personal concerns to me, nothing about the matters that Senator Shope has asked us to investigate is remotely related to any of your statutory obligations such as defined by ARS §41-172.”

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