‘Pay-to-play’ probe put on hold by Queen Creek senator

By Howard Fischer
Mail | X: @azcapmedia

PHOENIX — The Arizona Senate is delaying and revising its probe of “pay-to-play” allegations against Gov. Katie Hobbs over a 60% increase in a contract given in 2023 to a major donor to her political fund and the Arizona Democratic Party.

And Sen. Jake Hoffman said Monday he has taken himself out of the inquiry into the link between the governor and Sunshine Residential because "the crooked political media'' has pointed out that his 1Ten LLC consulting firm is financially benefiting from more than $1.5 million in advertising placed by others to defeat the incumbent governor and get Republican Andy Biggs elected. Hoffman, like any other advertising firm, gets to keep a share of media buys.

What that most immediately means is that the scheduled Sept. 29 meeting of the Senate Government Committee, which Hoffman heads, has been canceled. And the subpoenas for the governor and others have either been rescinded or were never served.

No new hearing date has been set. That means that the promised public hearings — and public questioning of Hobbs, Attorney General Kris Mayes, their staffs, and former employees of the Department of Child Safety could occur after Arizonans are casting their ballots: Early voting starts Oct. 7.

Instead, the probe will go to the Senate Appropriations Committee headed by Sen. David Farnsworth.

But the Mesa Republican is not exactly an uninvolved party.
During a press conference earlier this month, he said a statement provided to the Senate by a former employee of the Department of Child Safety raises questions about why the agency twice increased the amount of money it was paying to Sunshine Residential — a firm that has contributed $550,000 to Hobbs, her inaugural fund and the Arizona Democratic Party — to house foster children. It is that link between the governor and the company headed by Simon Kottoor that forms the basis of the Senate inquiry.

Farnsworth also said that statement contradicts findings by Attorney General Kris Mayes, who said DCS provided the 60% increase in rates to Sunshine in 2023, after Hobbs was elected, because the state was at risk of losing the beds. The Senate inquiry also is looking into how Mayes handled her own probe. And she, too, has been subpoenaed.

Farnsworth was at Hoffman’s side a week ago when the Senate probe was first announced.

The other big change announced by Hoffman Monday is the Senate is hiring former Supreme Court Justice Andrew Gould to serve as “special counsel” to the Appropriations Committee on this matter.

Kim Quintero, publicist for Senate Republicans, said Gould will work with Farnsworth “to conduct a thorough review of the available information and determine the appropriate next steps.”

“His work may include reviewing records and speaking with relevant individuals as the process moves forward,” she said in a prepared statement.

And Gould, in his own prepared statement, said his responsibility will be to “help the committee establish and complete factual record, evaluate testimony and documents, objectively, and ensure its work is thorough, fair, and legally sound.”

But Gould is no stranger to Republican politics.

After leaving the bench in 2021 he made an unsuccessful bid for attorney general, coming in third in a race won by Abe Hamadeh. And Hamadeh eventually lost the 2022 general election to Mayes.

More recently, he represented American Encore and the America First Policy Institute, groups with ties to Republican interests, in their lawsuit against Democratic Secretary of State Adrian Fontes over some rules he put to the Elections Procedures Manual. That resulted in the Court of Appeals striking some of what Fontes enacted as illegal.

He also filed suit in 2024 directly against Hobbs challenging two executive orders she issued designed to make registration and voting easier. That lawsuit eventually was dropped.

And Gould is still representing Senate President Warren Petersen and House Speaker Steve Montenegro, both Republicans, who are trying to reimpose restrictions on abortions despite voter approval in 2024 of Proposition 139 which enshrines a right of women to terminate a pregnancy into the Arizona Constitution.

Gould did not return messages seeking comment.
Michael Beyer, spokesman for the governor’s reelection campaign, said the transfer is just more politics.

“After political consultant Jake Hoffman was exposed for profiting from these shameless attacks on behalf of the Biggs campaign, partisan extremists are now scrambling to keep this taxpayer-funded sham alive,” he said in a statement.

Beyer said all this is a bid by Biggs and his allies to “use every trick in the book” to distract from the GOP candidate’s own record.
He also noted that, despite last week’s highly publicized press conference, the campaign has yet to actually be served with a subpoena.

Gubernatorial press aide Christian Slater had his own take on the move — particularly with Quintero saying that Gould will be compensated but that “there is no predetermined budget for his work.”

“Now he’s backtracking on his partisan political stunt and making Arizona taxpayers pick up the tab,” Slater said.

Senate Democrats, for their part, are taking credit for Hoffman’s decision — assuming that Hoffman stepped aside on his own. They sent an email Friday to Senate President Warren Petersen asking him to justify the probe by Hoffman, given his financial links to the Biggs campaign and the timing so close to the election.

“If you, in your position as Senate president, authorized the subpoena of a political rival, the people of Arizona deserve to know,” wrote the four top Senate Democrats led by Senate Minority Leader Priya Sundareshan of Tucson.

And they noted to Petersen that he also has a stake in the inquiry: It includes looking into the investigation conducted by Mayes whom Petersen is running against in November for attorney general.

“It seems clear, after reaching this morning’s press release by Senate Republicans transferring this ‘investigation’ to another committee, that our letter was received and read,” the Democrats wrote in a separate release.

Quintero said Petersen has nothing to do with the probe, saying he “empowers committee chairs to make decisions within their areas of responsibility.” She also said Hoffman and Farnsworth both chose Gould to serve as special counsel.

As to the transfer from one committee to the other, Quintero said that was Hoffman’s decision.

Central to all this is the fact David Lujan, appointed by Hobbs to be DCS director in 2023, agreed that year to boost what it was paying Sunshine to house foster children from $149 a day per bed to $195 and, finally, to $234.

What also is undisputed is Sunshine gave $100,000 to Hobbs for her inaugural fund shortly after she was elected, making it the second largest contributor beyond the $250,000 provided by Arizona Public Service. Because the event did not cost that much, state law at the time allowed her to use the extra dollars for political purposes.

There also were three donations of $100,000 apiece to the Arizona Democratic Party.

And it was just revealed that Sunshine provided another $150,000 for Hobbs to use in her “legal defense fund” to battle past and future lawsuits over her election. But those donations came after the boost in funding to Sunshine.

Mayes, in investigating the pay hikes, said she could find no evidence that Hobbs was involved in the decision to increase the payments.
Instead, she said it appears that Sunshine had “outsized leverage,” being the largest provider of beds for foster care children in Arizona.

And Mayes said Sunshine said if it didn’t get more money from the state it would make fewer beds available and instead provide them to the federal Office of Refugee Resettlement which was offering more.

But what the report issued by Mayes did not mention is that Sunshine’s request had been denied, first by Michael Faust who had been DCS director when Hobbs was elected, and again by Matthew Stewart who had been the governor’s first pick to head the agency. The governor withdrew his nomination after six weeks amid questions raised — including by Hoffman — about his conduct when he had previously been a training supervisor.

That led to Hobbs tapping Lujan, who approved the rate hikes.
Also not in the Mayes report was that Faust told her investigators that Kottoor, after the 2022 election, had offered to recommend that Hobbs keep him on as DCS director he if approved the requested contract increase. Mayes defended not mentioning that, saying Kottoor disputed the claim, meaning it would have come down to bringing a case where there were no witnesses. And Faust never reported the incident to police or prosecutors at the time.