Arizona AG Initiates Probe into Suspected ‘Pay-To-Play’ Activities Linked to Katie Hobbs

The Arizona attorney general’s office said Thursday that it had launched an investigation into an alleged “pay-to-play” scheme linked to Democrat Gov. Katie Hobbs.

Democrat Attorney General Kris Mayes’ office sent a letter to State Sen. T.J. Shope explaining the criminal division will probe whether any civil or criminal charges will be brought after a group home company received substantial benefits following six-figure political contributions. Shope demanded the investigation after reporting on the apparent payment scheme surfaced in the Arizona Republic.

On Wednesday, the paper reported that Sunshine Residential Homes, the state’s largest provider of beds for those in need of group home support, received a significant rate hike from the Department of Child Safety (DCS) after making donations to the Arizona Democratic Party and the governor’s inauguration fund. The company received approval from DCS for a nearly 60 percent increase in rates charged to care for children. Meanwhile, the department took an altogether different approach to other providers.

“Arizona’s child welfare agency has for years sought to move vulnerable kids out of group homes and into family-like settings,” the Arizona Republic reported. “To reduce the use of group homes, and combined with budget constraints, the Arizona Department of Child Safety has denied pay increases to home operators and cut loose 16 providers during the contract renewal process.”

“No other standard group home provider — there are dozens — was approved for a rate increase during Hobbs’ tenure,” the Arizona Republic reported.

The company donated $100,000 to a dark-money fund for Hobbs’ inauguration and gave $200,000 to the state Democratic Party before the 2022 election, the Arizona Republic reported. The CEO of Sunshine Residential also served on Hobbs’ inaugural committee and gave Hobbs an award just before the 2022 election.

The Arizona Republic cited a “spokesperson” for the governor’s office who denied Hobbs had anything to do with the preferential rate increases.

“Just like past investigations instigated by radical and partisan legislators, the administration will be cleared of wrongdoing,” Hobbs spokesman Christian Slater told Axios. “It would be outrageous to suggest her administration would not do what’s right for children in foster care.”

Hobbs won election in 2022 by a little more than 17,000 votes. He Republican opponent in that race, Kari Lake, is now running for the Senate seat currently occupied by retiring independent Sen. Kyrsten Sinema.