PHOENIX — Gov. Katie Hobbs is lashing out at those who suggest she and her administration did anything wrong in providing a huge boost in payments to the operators of foster care homes who donated money to her and the Arizona Democratic Party.
“I’m a social worker,’’ the governor said Tuesday when asked about the state contract with Sunshine Residential Homes and the probe being launched by Attorney General Kris Mayes. “And it is just outrageous that I would not act in the best interests of Arizona’s children in foster care.’’
Hobbs, however, declined to answer further questions about how the decisions were made that took the company from being paid $149 a day for each child housed in its facilities to the current rate of $234.
“I look forward to the conclusion of the investigation and finding that we acted in the best interests of Arizonans,’’ she said.
All this comes as Mayes is rejecting a demand by Rep. David Livingston, a Peoria Republican, that she recuse herself from investigating Hobbs, her fellow Democrat.
Livingston said that Mayes, by her actions — including telling Republican Maricopa County Attorney Rachel Mitchell to back off — “solidifies that any investigation by your office is already biased.’’
He said that is backed by history. Mayes cleared Hobbs of any wrongdoing last year after there was evidence the state’s website had been used to solicit funds that ultimately ended up at the Arizona Democratic Party, he said.
The Sunshine contract inquiry stems from a request by Sen. T.J. Shope, R-Coolidge, for Mayes to investigate what he said appears to be a “pay to play’’ deal linking Sunshine donations to Hobbs and the party to a sharp increase in what the Department of Child Safety agreed to pay the company.
Sunshine gave $100,000 to a committee seeking donations to pay for Hobbs’ 2023 inaugural. Only Arizona Public Service, at $250,000, was a larger contributor.
Before the 2022 election, Sunshine contributed $200,000 directly to the Arizona Democratic Party. There was another $100,000 donation in 2023.
DCS has said the 2023 rate hikes for Sunshine — there were two — were justified.
Agency spokesman Darren DaRonco said an initial increase request by Sunshine was rejected.
On May 27, 2023, however, the agency agreed to raise the standard rate from $149 per bed to $195, a 30% increase.
That, DaRonco said, came after Sunshine said unless it got more money, it would make more of its beds available to the federal government, which was looking for places for immigrant children. He said such a move — the feds were paying $225 — would have meant fewer places for DCS to place its foster children.
Then Sunshine got a new contract, boosting its rate to $234.
That was based on the need for beds, especially since Sunshine has 70% of the beds the agency wants in which to place siblings together, DaRonco said.
Livingston, in his letter asking Mayes to step away from this investigation, said she has a history of shielding the governor.
That goes back to the funneling of 53 contributions solicited through a state website, money that went to the Arizona Democratic Party.
“The most shocking aspect of your ‘investigation’ was that you allowed the ADP to simply deposit the improperly procured funds into Gov. Hobbs’ state promotional fund — after I submitted my complaint — instead of holding Gov. Hobbs or her agents accountable,’’ Livingston wrote to Mayes. “You could have sought civil penalties for each violation, to the tune of $265,000, but instead, you chose to sweep those statutory violations under the rug and protect your own party and Gov. Hobbs.’’
“You have already proven that you will shield both the Democrat governor and your own party from any liability,’’ he said.
Mayes won’t be responding directly to Livingston, said her press aide Richie Taylor.
As to that 2023 investigation, Taylor said it is closed “and we don’t have any additional comments to make.’’
After his dissatisfaction with that earlier probe, Livingston wrote House Bill 2768. It spells out the procedure for the attorney general to follow when there are allegations about improper spending of public money.
It would require the AG to determine if there is “an actual or potential conflict of interest.’’ If there is a conflict, the case must be handed off to a county attorney.
The measure cleared the House on a 32-25 vote but has yet to be considered by the full Senate.
While having an attorney general investigate a sitting governor is unusual — especially someone of the same party — it is not unprecedented.
In 1987, Republican Attorney General Bob Corbin secured a state grand jury indictment against GOP Gov. Evan Mecham over an alleged secret $350,000 loan to his campaign by developer Barry Wolfson that was not disclosed on his legally required finance reports.
Mecham unsuccessfully asked a judge to have Corbin disqualified because of what he claimed was an attorney-client relationship.
Mecham went to trial but eventually was acquitted after his attorneys convinced jurors that the failure to list the loan was a mistake, one he blamed on his brother, Willard, who had done the bookkeeping.
By that time, however, Mecham had been impeached and removed from office.
More recently, Attorney General Grant Woods launched a probe into what he said was $1.3 million in undisclosed donations to the campaign of fellow Republican Gov. Fife Symington by his wife and his mother. That inquiry was dropped after both claimed they were legitimate loans.
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