Attorney General Kris Mayes announced that she will not be filing charges against Governor Katie Hobbs over an alleged pay-to-play scheme. Hobbs was accused of giving Sunshine Residential, a provider of homes for foster children, a rate hike increase after the business contributed to her inaugural fund.
Sunshine gave $100,000 to Hobbs’ 2023 inaugural fund. The company also gave $300,000 to the Arizona Democratic Party during 2022–2023. Additional contributions, including from company principals Simon and Elizabeth Kottoor, and later contributions of $150,000 went to a Hobbs legal defense fund.
“After two years of investigation, consisting of multiple interviews, reviews of campaign-finance records, procurement records, bank documents, and State emails and chats, totaling over one terabyte of data, including more than 100,000 documents, the investigation has not uncovered any evidence of the necessary quid pro quo to support a bribery charge,” said Mayes in a press release. “Declining prosecution is a conclusion about the legal standard for charging a case, but this case shows there is a need for legislative reform. The Legislature and the Governor have the power to ensure greater transparency with regard to political donations made by state contractors. I am urging them to work together and try again to pass legislation that does so.”
Hobbs’ office reacted after the announcement. “The report released today clearly states that there was no wrongdoing by the governor or her office,” according to a statement. “As has been publicly reported multiple times and the attorney general’s report now confirms: Governor Hobbs was not involved in, did not direct and did not instruct any member of her administration regarding the rate increases the Department of Child Services approved.”
Senate President Warren Petersen (R-Gilbert), who is running against Mayes for attorney general, swiftly responded expressing his disagreement. “After dragging her feet on the pay-to-play allegations against her Democratic pal, Kris Mayes announced her refusal to hold Governor Katie Hobbs accountable for her actions,” Petersen said on X. “Mayes’ decision was predictable in an election season. She shamefully shifted accountability and protected her political ally, turning a blind eye to Hobbs' misconduct. But we now know Sunshine Residential made $300,000 in political donations that benefited both Mayes and Hobbs in the midst of the "investigation". Once again, Mayes has proven herself unfit to lead the Arizona Attorney General’s Office, putting politics ahead of enforcing the law.”
Mayes included a copy of her legal analysis. Authored by Criminal Division Chief Counsel Nick Klingerman, the legal memo stated that Hobbs’ actions did not fit the definition of bribery. Klingerman cited Supreme Court case law which states bribery occurs “only if ‘payments are made in return for an explicit promise or undertaking by the official to perform or not to perform an official act’” … . It is not bribery simply because ‘[a] donor . . . gives money in the hope of unspecified future assistance’ and ‘the elected official later does something that benefits the donor.’”
While the memo recommended closing the case, Klingerman said the case will remain open in one aspect; assisting the Auditor General’s Office with its investigation into the case.