In the middle of her reelection campaign for Governor of Arizona against Republican Representative Andy Biggs (AZ-05), Governor Katie Hobbs may be facing some very direct questions from Republicans over what sure looks like a pay-to-play scheme involving a company called Sunshine Residential Homes, a company that runs group homes for children in the state's foster care system.
Here's how that scheme is reported to have worked:
Sunshine Residential Homes are group homes for children and youth in the foster care system.
Speaking in a Wednesday press conference, (Arizona State Senator Jake) Hoffman, a Republican, said Sunshine Residential executives and connected individuals allegedly contributed more than $500,000 to benefit Hobbs, her political operations and various funds.
Following these contributions, Hoffman said Sunshine received per-child rate increases (a 56% hike), making them the highest-paid group home provider in Arizona, despite internal staff noting no increase was necessary.
"Political donations went in, taxpayer-funded rate increases came out, all to benefit a key donor to Katie Hobbs,” said Hoffman, chairman of the Senate Committee on Government. "What we have seen has every appearance of a pay-to-play corruption scandal at the highest levels of our state government."
These allegations appear the very definition of a pay-to-play scheme: swapping a very generous political donation for a big rate increase, making Sunshine the highest-paid operation of its kind in the state. This has already been the subject of an investigation by Arizona Attorney General Kris Mayes, who claimed there wasn't sufficient evidence for a prosecution. AG Mayes is, like Governor Hobbs, a Democrat.
Now the Arizona State Senate has named former Arizona Supreme Court Justice Andrew Gould as special counsel in the case. Gould will be looking into the state AG's decision not to prosecute as well as, presumably, the other facets of the case.
Former Arizona Supreme Court Justice Andrew Gould has been named special counsel in the state Senate’s investigation of Attorney General Kris Mayes’ decision not to prosecute Gov. Katie Hobbs over allegations of a pay-to-play scheme.
The Democratic governor, who is running for reelection against U.S. Rep. Andy Biggs, R-Gilbert, has been accused of approving rate increases by Sunshine Residential Homes because they donated more than $500,000 benefitting Hobbs' political operations and various funds. Mayes, another Democrat, is running for reelection against Senate President Warren Petersen, who's also a Republican living in Gilbert.
This case has become a hotly contested issue in Arizona. Democrats, including Governor Hobbs and AG Mayes, are blasting the investigation and the special counsel appointment as a campaign stunt. The Senate Republicans maintain it has all the appearance of a pay-to-play scheme, and from what is known, it does indeed look like just that: campaign contribution in, fat rate increase out. Speaking to The Center Square, a representative for the AG's office laid out some details of that initial investigation:
The Attorney General's Office interviewed multiple sources, reviewed more than 100,000 pages of records and compiled nearly a terabyte of data during a two-year investigation, Richie Taylor, Mayes' director of communications, told The Center Square during a phone interview late Monday morning.
He said the office believes the Republican senators' investigation and Hoffman's previous announcement of subpoenas is a political stunt ahead of the Nov. 3 general election.
That's as may be; the timing is certainly close. But the primary facts remain: Sunshine delivered on a big campaign donation, then was awarded a fat rate hike. That's kind of hard for even a Democrat to just wave away.
The election is growing close indeed, and it's not yet clear if this could be a game-changer. Current polling still shows Governor Hobbs with a significant lead. Could this investigation be enough to put a chink or two in Governor Hobbs' electoral armor? It could be a major campaign point for Andy Biggs and his campaign in these last few weeks, as the Republican campaign is looking to close the deal with Arizona voters. We'll find out on November 3rd.