PHOENIX β Gov. Katie Hobbs collected nearly $1.5 million in donations from corporations and other special interests to cover the cost of her inauguration.
But the event cost about $207,000 to put on.
Thatβs going to leave her with a bunch of money she can spend on everything from gifts to visiting dignitaries to trying to flip control of the Arizona Legislature to Democratic in 2024.
A report of the donations, obtained by Capitol Media Services, also shows that Arizona Public Service, the stateβs largest electric utility, was the biggest donor at $250,000.
APS had previously confirmed it gave money but refused to say how much. Instead, company spokesman Mike Philipsen would say only that APS was βjoining Arizona businesses to support the governorβs inauguration.ββ
He also said the donation is βdirected specifically to the 2023 gubernatorial inauguration committee, meaning it can be used in support of all inauguration functions.ββ
But the APS contribution itself exceeds what the event cost. What to do with the balance is now up to Hobbs, because she set up the inaugural fund under a section of the Internal Revenue Code that allows proceeds to be used for political purposes.
Ironic flip of APS script?
If she spends the APS money β and the surplus from the other donors β to help get Democrats elected in 2024, that would prove to be a bit of irony.
The company gave more than $850,000 to the Republican Governors Association this election cycle. That organization in turn provided more than $9 million to the Yuma County Republican Central Committee, which used the cash to run commercials seeking to defeat Hobbs.
APS would not comment on whether the donation to the inaugural fund β the largest by a factor of 2.5 over any other β was a way of mending political fences with the new Democratic governor as the companyβs investment in the Republican Governors Association is disclosed in public reports.
By contrast, Salt River Project donated $25,000 for the inaugural, and Tucson Electric Power gave $10,000.
There was no response from APS to multiple messages seeking comment on the fact Hobbs can spend some of its leftover money for political purposes.
Other six-figure donors
While APS was the largest donor, there were others in the six-figure range.
They include Blue Cross Blue Shield, which not only offers health insurance plans to state employees but also lobbies on insurance legislation at the state Capitol.
Also at the $100,000 level is the Realtors Issue Mobilization Committee. It provides grants to local Realtor associations to advocate on public policy issues. Its funding was cited by the Arizona Association of Realtors in a successful 2016 campaign to add a measure to the state constitution forever prohibiting the taxing of services such as real estate services.
Sunshine Residential Homes, which provides care to children removed from their homes by the state Department of Child Safety, kicked in $100,000.
There also was a $50,000 donation from William Perry, owner of William K. Perry Farms. which grows cotton and alfalfa.
The Union Pacific Corporation Fund for Effective Government kicked in $26,450.
There were $25,000 donations from the Tohono Oβodham Nation, Southwest Mountain States Regional Council of Carpenters, homebuilder Taylor Morrison, the Arizona Dispensary Association that represents marijuana shops, the Health System Alliance of Arizona which lobbies on behalf of major hospitals, Honeywell International PAC and several individuals.
And there are a series of $10,000 and $5,000 donations, a few smaller; and one at $25.
The amounts donated are far in excess of what anyone could legally have given Hobbs β or any other candidate for statewide office β for their campaigns.
For the election just completed, Arizona law limited individual donations for statewide candidates to $5,300. Even political parties could give no more than $80,300 to a partyβs nominee.
And corporate donations to candidates β the kind that went to pay for the inaugural β are entirely prohibited.
Pressure to disclose
It wasnβt just Hobbs collecting money for the inaugural.
It turns out there was a separate State Inaugural Fund that received donations and pledges of about $85,000, the largest of which was $25,000 from food giant conglomerate Pepsico. Those dollars will be used to pay for event-production expenses, said Hobbs press aide Murphy Hebert.
Hobbs has been under pressure to release information on the sources of funds for the inaugural event since Capitol Media Services first wrote at the beginning of the month that she was not fully disclosing the names of all the individuals or corporations paying for the celebration.
She subsequently put a full list of the names in a booklet that was given out at the Jan. 5 event and listed them on an inaugural website. But this is the first time there is a full accounting of how much each donated.
βWith the inauguration events now behind us, we are fulfilling the governorβs commitment to transparency by disclosing the donations made to the Inaugural Fund as well as expenditures from the fund that helped cover the costs of the Jan. 5 inauguration ceremony,ββ Nicole DeMont, director of the inaugural committee, said in a prepared statement.
Part of what makes the excess inaugural money noteworthy is what Hobbs gets to do with it, which differs from what happened with her three most recent predecessors.
Republican Gov. Doug Ducey raised outside money, including at his second inaugural in 2019 where he sold tickets for the best seats to the event. For example, a $25,000 donation got six seats up front, three parking passes, six reception tickets, three photos and six inaugural pins.
But what was left over after paying costs was placed into the βprotocol fundββ that governors can use for things like gifts to dignitaries. Arizona law requires governors to annually account for how that money is spent.
In 2011 when Republican Gov. Jan Brewer was sworn in, she raised $200,000 from lobbying firms, business interests and the stateβs major utilities. When the event didnβt cost that much, leftover funds were earmarked to refurbish the governorβs offices, particularly to pay for new carpeting.
Democratic Gov. Janet Napolitanoβs 2007 inauguration raised $150,000 from private sources to supplement the $60,000 budgeted in state funds, with no indication of anything left over.
By contrast, Hobbs set up her inaugural committee as a βsocial welfare organization,ββ a category under the Internal Revenue Code for nonprofits that allows at least a portion of the funds to be used for political purposes.
That 501(c )(4) category is the same one, for example, the Free Enterprise Club is in. The club has used its status to promote candidates of its choice through independent expenditures for things like commercials.
Hobbs may use at least part of whatβs left over after paying expenses to run the same kind of independent expenditure campaigns in 2024 to get a Legislature more to her liking.
There was no disclosure of who attended Hobbsβ $150-a-head inaugural ball on the Saturday after she was sworn in. A spokesman said that had nothing to do with the inaugural committee, with the funds raised going to the Arizona Democratic Party.
