Arizona GOP lawmaker calls for investigation into state contracts with generous Hobbs donor

Bridget Dowd/KJZZ

The South Mountain office of the Arizona Department of Child Safety in 2023.

A leading Republican in the Arizona Senate is calling on Attorney General Kris Mayes to investigate whether Gov. Katie Hobbs’ administration broke the law when it gave raises to a state contractor and Hobbs’ political donor.

The Arizona Republic reported that the Department of Child Services gave Sunshine Residential Homes, a provider of group homes for foster children, a nearly 60% pay raise as the department has reduced its reliance on group homes overall. The company’s current daily rate of $234 is the highest of any group home provider and is well above the average daily rate of $169 that DCS pays under its current contracts.

The Republic also found that the raise came about because the company donated hundreds of thousands of dollars to the state Democratic Party and a dark money group tied to Hobbs. Sunshine Residential CEO Simon Kottoor also made a personal donation to Hobbs’ 2022 gubernatorial campaign.

TJ Shope at the Arizona State Capitol in 2023.

Republican Senator TJ Shope, chairman of the Arizona Senate Health and Human Services Committee, has sent letters to Mayes and Maricopa County Attorney Rachel Mitchell urging them to investigate the situation, saying it “can only be described as a pay-to-play scheme between Governor Katie Hobbs’ office, the Arizona Department of Child Safety and political donors.”

Shope claimed the payments could violate several laws, including those against bribery and conflict of interest.

He also wrote to DCS CEO David Lujan asking him to provide unredacted copies of the request for proposal and other documents related to the department’s contract extension with Sunshine Residential Homes.

A spokesman for Hobbs told The Republic that the governor’s office was not involved in DCS’s decision to approve this contract, citing a letter from Kottoor to DCS saying the company was losing money and needed a higher rate to continue providing group home services to DCS.

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