Mayes investigates Hobbs after GOP accuses government of 'pay-to-play' • Arizona Mirror

Arizona Attorney General Kris Mayes has launched an investigation into Governor Katie Hobbs at the request of a Republican congressman after a report revealed that a housing association that donated to Hobbs' campaign had to accept price increases.

The Arizona Republic reported that Sunshine Residential Homes Inc. was approved for a nearly 60 percent increase in the contributions the Arizona Department of Economic Security pays to the company. The 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 donations after her election victory.

The Republic reported that Hobbs received $200,000 after her election victory, half of which went to her inauguration fund. Sunshine Residential Homes donated another $200,000 to the Arizona Democratic Party and the Hobbs campaign during her 2022 run for governor.

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Republican lawmakers reacted to the news, calling it a “pay-to-play” scheme. Senator TJ Shope (R-Coolidge) sent a letter to Mayes this week asking the Attorney General's office to investigate the matter. Late Thursday, a spokesman for Mayes confirmed that the office would investigate the matter and noted that state law requires an investigation of all such complaints. He declined to comment further.

A spokesman for Hobbs said the governor did nothing wrong and blamed partisan political reasons for the attorney general's investigation.

“Just as with previous investigations brought by radical and partisan lawmakers, the administration is being absolved of wrongdoing,” Christian Slater said in an emailed statement to the Arizona Mirror. “Governor Hobbs is a social worker who has championed the families and children of Arizona. It is outrageous to suggest that her administration is not doing the right thing for children in foster care.”

Shope expressed concern in his letter to the attorney general that Republic's reporting “raises serious questions about public corruption that could touch on several state laws.” Shope's concerns included bribery, fraud, conflicts of interest, illegal use of government funds and possible violations of the State Procurement Act.

“I am deeply disturbed by recent media reports describing 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 said. wrote in his letter“Elected officials are required by oath to uphold the laws of our state and to be prudent stewards of taxpayers’ money.”

“The Criminal Division of the Attorney General's Office is authorized by law to investigate the allegations and offenses described in your letter,” Attorney General Nick Klingerman said in response to Shope's letter. “To that end, the Attorney General's Office will commence an investigation.”

Mayes' office also sent letters to Maricopa County Attorney Rachel Mitchell and Arizona Auditor General Lindsey Perry. Shope had requested that the MCAO also investigate the matter, and the Auditor General's office offered Support for MCAO, the letters say. In his letter, Mayes calls on the two agencies to withdraw and leave the investigation to the Attorney General.

“It would be neither appropriate nor in the best interest of the state to conduct parallel investigations into the same matter,” the letter to the MCAO states. “Moreover, a separate proceeding conducted by the MCAO could jeopardize the integrity of the criminal investigation that my office will now conduct.”

Mayes' letter to Perry said the assistance of the Joint Legislative Audit Committee, which can provide direction to the Auditor General, was not needed “at this time.”

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

The CEO of the company in question, Simon Kottoor, was a member of 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 Paradise Valley mansion.

The report also found that the company received the highest rate of any group home provider and made one of its largest donations to Hobbs after initially being denied a rate increase.

The company has stated in press releases that it is supporting Hobbs because of her previous work as a social worker. The company has also had already caused controversy when a 9-year-old boy died in her care.

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