(The Center Square) – Arizona legislators are investigating Gov. Katie Hobbs over a potential pay-to-play scheme involving millions of dollars, but the Democratic governor calls the Republican lawmakers’ investigation “a shameless stunt.”
Arizona House Speaker Steve Montenegro, R-Surprise, created an advisory team to investigate allegations that Sunshine Residential Homes, a foster-care nonprofit, obtained the state’s approval for a 30% rate increase worth millions of dollars after donating $400,000 to Hobbs and the Arizona Democratic Party.
“Facts reported raise serious questions the House cannot ignore,” Montenegro said. “Arizona’s children, families and taxpayers deserve a system that is clean, fair and focused on care, not political access or donations.”
The speaker added that the House will work with Arizona Auditor General Lindsey Perry, Maricopa County Attorney Rachel Mitchell and Arizona Attorney General Kris Mayes to conduct its investigation of a potential pay-for-play scheme.
But Hobbs told The Center Square that the advisory team is a “shameless stunt.”
“Arizonans are sick and tired of the same old partisan games from extremist legislators who jump at every opportunity to distort the facts and spread misinformation for their own gain,” the governor said.
Hobbs added that a recent Arizona Republic story on the matter “makes” it clear that her office did not have any communication with the Department of Child Services about the nonprofit’s “requested rate increase.”
“It’s about time the legislative majority stop with the politically motivated stunts and focus on what matters to Arizonans: lowering costs, protecting our water future and restoring the Arizona Promise,” she told The Center Square.
In June 2024, The Arizona Republic first reported on the alleged pay-for-play arrangement between Sunrise Residential Homes and Hobbs. That same month, Mayes said her office was investigating the matter.
Last week, the Republic reported on how the nonprofit used political leverage to secure the rate increase from the Department of Child Safety.
Senate President Pro Tem T.J. Shope, R-Casa Grande, sent a letter last week to Mayes and Mitchell to confirm that the investigation into this alleged situation remained active.
“If political donations influenced decisions inside DCS, especially decisions involving vulnerable children, that is unacceptable,” he stated. “We intend to get to the bottom of this. Arizonans must be confident that their state government is not for sale.”
Shope originally sent a letter to Mayes and Mitchell in June 2024 after the potential pay-to-play situation came to light.
Shope told The Center Square that the alleged pay-for-play situation “at best” for Hobbs has “political consequences.”
At worst, he said, it has “very real legal consequences.”
The state senator added he has concerns about how thorough an investigation Mayes and Mitchell will conduct into the matter.
Mitchell is deferring to the Arizona Auditor General’s Office, he stated, noting that he would have liked to have seen Mitchell take on a more active role.
Shope questioned whether Mayes would conduct an intensive investigation into Hobbs, given that they are from the same political party. They’re Democrats.
”Is she going to use the same fervor of an investigation on the governor’s office as she did on the alternate electors?” he asked. He was referring to the 11 Republicans who allegedly claimed to be Arizona’s electors backing Donald Trump in the 2020 presidential election. Joe Biden won the state’s popular vote, according to the Secretary of State’s Office, which meant Biden received the state’s 11 electoral votes.
Shope told The Center Square that he introduced Senate Bill 1612 in 2024, which would have required companies applying for state contracts to disclose their political donations or gifts. The Arizona Legislature passed the bill, but the governor vetoed it.
“It’s becoming clear to me why the bill was vetoed,” Shope said. “It does beg the question, are there any other Sunshine Residentials out there that we don’t know about yet?”
The Center Square reached out to Mitchell and Mayes’ offices, but they said they couldn’t comment on an ongoing investigation.
The Center Square also reached out to Sunshine Residential Homes, but it did not respond before press time.
