AZ Attorney General Probes ‘Pay-To-Play’ Scheme Linked to Katie Hobbs

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

Democrat Attorney General Kris Mayes’ office sent a letter to State Sen. T.J. Shope indicating the criminal division will examine whether any civil or criminal charges are warranted after a group home company received considerable benefits following six-figure political contributions. Shope requested the investigation after reports on the alleged payment scheme appeared in the Arizona Republic.

On Wednesday, the paper reported that Sunshine Residential Homes, the state’s largest provider of group home beds, received a substantial 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 DCS approval for nearly a 60 percent increase in rates charged for child care. Conversely, the department took a different approach with other providers.

“Arizona’s child welfare agency has for years aimed 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 due to budget constraints, the Arizona Department of Child Safety has denied pay raises to home operators and terminated 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, according to the Arizona Republic. Additionally, the CEO of Sunshine Residential served on Hobbs’ inaugural committee and presented Hobbs an award shortly before the 2022 election.

The Arizona Republic cited a spokesperson from the governor’s office who denied Hobbs was involved in the preferential rate increases.

“Just like past investigations initiated 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 the 2022 election by a margin of slightly more than 17,000 votes. Her Republican opponent in that race, Kari Lake, is now running for the Senate seat currently held by retiring independent Sen. Kyrsten Sinema.