By Howard Fischer
Mail | X: @azcapmedia

PHOENIX — Gov. Katie Hobbs said Tuesday she’s looking forward to the end of a year-long investigation by Attorney General Kris Mayes about whether she was involved in an alleged “pay-to-play” scheme.

But the governor still won’t commit to actually sitting down with an interview with Mayes’ investigators to answer questions they have about the decision by the state to sharply boost the money it was paying to a company that houses children in foster care, a company owned by someone who was a major political contributor to Hobbs and the Arizona Democratic Party.

All this comes as Mayes said earlier this week she intends to finish the inquiry into the contract with Sunshine Residential before the November general election.

Mayes confirmed four months ago she had asked the governor to answer questions.

The answer at that time from Christian Slater, the governor’s press aide, was that her the governor’s office had been in contact with Mayes’ office and was “looking forward to this wrapping up.”
And now?

“We are in communication with her,” Hobbs said Tuesday in response to questions from Capitol Media Services. “I look forward to the conclusion of the investigation.”

The governor also repeated her assertion the probe will show she was not involved in the decision by the Department of Child Safety to give back-to-back increases in what the state is paying Sunshine Residential.

And what of her claim that she wants to put the issue behind her?

“That is all I have to say on that,” the governor responded.

All this traces back to the fact Sunshine had given $100,000 in 2022 to a committee which was seeking donations for the governor’s 2023 inaugural. Only Arizona Public Service, at $250,000, was a larger contributor.

Close to $1.7 million was raised for the event, which the governor’s office said ultimately cost $207,000. And under the law at that time, everything not spent on the fundraiser could legally be used for political purposes.

Even before the 2022 election, though, Sunshine contributed $200,000 directly to the Arizona Democratic Party. And there was another $100,000 donation in 2023.

This is relevant because the state was deciding in 2023 whether to increase the amount of money the Department of Child Safety was paying Sunshine for housing of foster children.

Sunshine had made an initial request DCS in early 2023 for more money. That was rejected by Matthew Stewart, who had been the governor’s first pick to head the agency.

The governor withdrew his nomination after it became clear he would not be confirmed by the Senate.

But in May, DCS, now run by former state lawmaker David Lujan, agreed to raise the standard rate from $140 per bed to $195, a 30% increase.

Agency spokesman Darren DaRonco said Sunshine said unless it got more money it would make more of its beds available to the federal government which was looking for places for immigrant children. He said such a move — the feds were paying $225 — would have meant fewer places for DCS to place its foster children.

Then Sunshine got a new contract boosting its rate to $234.

The Arizona Republic reported that the governor’s office later confirmed that Hobbs and her campaign manager had dined with Simon Koottor and other company leadership as the contract was being finalized. But her office has maintained she never influenced the contracting decision.

Mayes opened her probe in June 2024.

The attorney general earlier this week rejected the idea that Hobbs, in refusing to date to answer questions, had pretty much decided to ignore her office.

“The answer is ‘no,’” Mayes responded.

“You cannot blow off the attorney general’s office,” she said. “Full stop. No one can.”

But the attorney general also suggested that she is prepared to move ahead on the probe -- with or without the governor’s cooperation.

“We are going to get the information that we need,” Mayes said.

“When we have a result, we will make an announcement,” she said. “And we are near the end of the investigation.”

Mayes also sought to deflect at least some of the attention away from her and her own probe.

“I would remind you guys there is another investigation.”

That is one launched by the Auditor General’s Office, an arm of the state Legislature. Maricopa County Attorney Rachel Mitchell has agreed to assist in that inquiry.

There was no immediate response Tuesday from the Auditor General’s Office about the status of its probe. And Slater refused to answer questions about whether Hobbs has been asked to sit for an interview with that office and, if so, whether she has agreed.

A spokeswoman for Mitchell said her office is playing only a support role, providing as necessary the ability to subpoena records or testimony, a power that the auditor general does not have. She declined to say whether there have been such subpoenas or whether it has sought an interview with Hobbs.

Lujan told the Republic last year that the decision to approve the rate increases for Sunshine was “based on what was best for our agency and the children.”

“But of course you’re going to get second-guessed when you have campaign contributions involved,” he said. “It’s going to raise suspicions.”

Hobbs on Tuesday said she is confident that Mayes’ inquiry “is going to show exactly what the director (Lujan) said that I was not involved in the decision ... and the department acted in the best interests of foster kids in Arizona.”

Despite the governor’s assurances, the probe has resulted in political fallout.

That includes legislation crafted by Sen. T.J. Shope, R-Coolidge, which sought to require anyone seeking a state contract to disclose any money donated to the campaigns of the governor, gubernatorial candidates, and any of their committees.

Hobbs vetoed that bill — twice — calling it a “political stunt” because it was aimed only at candidates for the governor’s office. Shope responded by saying it is the governor’s office and the agencies it oversees that awards contracts, not state lawmakers.
Republican gubernatorial hopeful Andy Biggs has keyed in on that.

“Katie Hobbs has shown throughout her term she’s willing to hide donations and veto bills that would shine a light on the contractors and corporations trying to influence her administration,” he said in a statement in June.