Arizona Attorney General Kris Mayes announced Friday that state prosecutors will not file criminal charges against Gov. Katie Hobbs (D) following an investigation into allegations of a "pay-to-play" scheme. The probe examined whether a group home company received a 30% rate increase from the state in exchange for $100,000 in contributions to the governor’s inaugural celebration. Mayes stated that the investigation did not uncover evidence of a quid pro quo necessary to support a bribery charge.
The investigation centered on Sunshine Residential Homes, a large foster care provider that operates 28 homes with approximately 290 beds. According to records, the company donated $200,000 to the Arizona Democratic Party before the 2022 election, followed by $100,000 to Hobbs' inaugural fund and another $100,000 to the party in 2023. After a previous request was denied shortly after Hobbs took office, the company’s rate was approved in May 2023, increasing from $149 to $195 per bed.
The Arizona Department of Child Safety (DCS) stated that the increase was approved by then-DCS Director David Lujan without involvement from the governor or her staff. The agency reported that Sunshine had threatened to reduce state bed capacity to serve federal programs that offered higher reimbursement rates. DCS officials noted that losing these beds would have significantly hindered the state's ability to place children and likely resulted in the separation of siblings in foster care.
The outcome also impacts the political landscape for Governor Hobbs and her Republican opponent, Rep. Andy Biggs, as they compete in the upcoming gubernatorial election. While the Attorney General's criminal investigation is closed, its findings highlight a lack of transparency in political donations from state contractors. Attorney General Mayes has urged the Republican-controlled Legislature and the Governor to adopt reforms to address these disclosure gaps. A person living in Arizona may see this issue continue to influence political advertisements and legislative debates regarding how much information contractors must disclose about their political giving.
What happens next depends on a separate, ongoing investigation conducted by Maricopa County Attorney Rachel Mitchell and the state auditor general. The timeline for that inquiry is not yet known. Furthermore, Sunshine Residential Homes remains the subject of a civil lawsuit and a criminal investigation by the Maricopa County Sheriff's Office regarding the December 2022 death of 9-year-old Jakob Blodgett. While the state denies negligence, the sheriff's office reported that its investigation into the boy's death remains open. No dates for these future legal or investigative conclusions have been reported.