Arizona Attorney General Kris Mayes will not file criminal charges against Democratic Governor Katie Hobbs over accusations involving a group-home company that received a rate increase from the state after making political contributions. The investigation centered on Sunshine Residential Homes, to which Hobbs had been accused of giving preferential treatment after The Arizona Republic reported the company contributed to the inaugural fund and Arizona Democratic Party, and later received a 30 percent payment increase from the state. The probe that lasted more than two years “has not uncovered any evidence of the necessary quid pro quo to support a bribery charge,” Mayes, also a Democrat, announced Friday.
Hobbs spokesperson Christian Slater said the report clearly says that there was “no wrongdoing” by the governor or her office. Newsweek reached out to the governor’s office for comment outside of normal business hours. Sunshine gave $200,000 to the state Democratic Party ahead of Hobbs’ 2022 election, followed by $100,000 to her inaugural fund and another $100,000 to the party in 2023, according to records.
After being denied an increase in 2022, the company was approved in May 2023, months after Hobbs took office, raising its rate from $149 to $195 per bed. Sunshine said that without a rate increase, it would reduce the beds it made available to the state and instead use those beds for unaccompanied immigrant children under the federal program, according to the Arizona Department of Child Safety (DCS). The agency is Arizona’s largest provider of beds for children without developmental disabilities, operating about 290 across 28 homes.
After calling the potential loss of beds a “serious capacity concern,” the DCS approved the increase. The agency also said that the governor and her staff members were not involved. Sunshine spokesperson Tommy McKone told Newsweek that the company has fully cooperated with all investigations over the past two years.
Sunshine has been committed to transparency from the start, and that commitment continues today.” In statements sent via attorneys, Hobbs said she did not discuss contract rates with anyone from Sunshine, nor did she “order or authorize” others to do so on her behalf, according to a memo from Nick Klingerman, chief of the attorney general’s criminal division. In addition, the company’s founder, Simon Kottoor, and his wife each contributed a total of $10,000 to Hobbs’ gubernatorial campaigns. Mayes, however, said the case shows there is a need for legislative reform.
I am urging them to work together and try again to pass legislation that does so.” A separate investigation by Republican Maricopa County Attorney Rachel Mitchell and the state auditor general is ongoing. Hobbs is running for reelection against Republican Representative Andy Biggs in the key swing state. Last week, she announced her running mate, former Mesa Mayor John Giles, a longtime Republican who changed his party affiliation to independent earlier this year.
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