Arizona Attorney General Kris Mayes opened a criminal investigation into Governor Katie Hobbs in June 2024 over allegations of a pay-to-play scheme. The investigation is still open, and has prompted concern over Hobbs’ actions from officials around the state. State House Republicans launched their own probe in March 2025.
Arizona Republican Party Chair Sergio Arellano issued a statement about the investigation on Wednesday. “This is not leadership; this is corruption,” he said. “Governor Hobbs has spent years lecturing Arizonans about ethics while her own administration was allegedly steering millions in taxpayer dollars to a generous donor. The fact that her campaign manager was dining with the contractor’s CEO as the deal was finalized only adds to the stench of a pay-to-play scheme that puts special interests ahead of Arizona’s most vulnerable children in state care.”
In 2023, Hobbs significantly increased the rate paid to just one group home provider for foster children, Sunshine Residential Homes (SRH), after SRH made a $200,000 donation to her inauguration festivities. SRH applied for a rate increase in December 2022 but was turned down. SRH, whose CEO served on Hobbs’ inauguration committee, donated $200,000 to the inauguration three days after the turndown, and soon got the rate increased to $234 per day, which amounts to a 30% increase; an annual increase of $4 million.
This was despite SRH’s financial records revealing that its assertion it had a financial deficit was questionable. SRH claimed it was running a $4.5 million deficit, but The Arizona Republic scanned documents SRH submitted to the state, and found that the company was making extra large payouts to shareholders, and had enough money to contribute $550,000 in political donations.
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