Allegations of a potential pay-to-play scheme have emerged from the Arizona Department of Child Safety, involving a prominent Democratic donor and a former state agency director. These claims suggest possible quid pro quo actions, but the state’s governor remains unimplicated according to official reports.
Despite fresh testimony supporting claims from the agency’s ex-director, Mike Faust, recent findings from the Arizona Senate do not link Governor Katie Hobbs to any misconduct. Attorney General Kris Mayes has previously determined that no evidence exists showing Hobbs pressured agency leaders regarding rate increases for a state group home operator.
A report from the Attorney General’s Office dated Aug. 21 exonerated Hobbs of criminal actions after a two-year probe into whether donations from Sunshine Residential’s founder, Simon Kottoor, affected the decision to grant the company two significant pay hikes in 2023 and 2024.
Faust’s accusations against Kottoor, suggesting the use of political connections for benefits, were not highlighted in Mayes’ report. Faust, appointed by former Republican Gov. Doug Ducey, claims Kottoor offered to help retain his position in exchange for a rate increase approval.
Sunshine Residential’s spokesperson, Tommy McKone, defended the company, stating: “We cooperated fully with the Attorney General’s office and all investigating authorities for two years, and the record speaks for itself.” He further emphasized the unfounded nature of the claims amid campaign season debates on state contracting policies.
Emerging Testimony
Adding to the narrative, former Deputy Director Shalom Jacobs, with over two decades at the agency, has lent support to Faust’s account. Jacobs, who departed shortly after Hobbs’ inauguration, recalled a conversation with Faust in November 2022, where he recounted Kottoor’s offer to influence the new governor on his behalf.
Republican Senators have clarified they are not pushing for charges. “We’re not calling for charges from this press conference,” stated Kim Quintero, Senate GOP spokeswoman.
Despite the lack of actionable evidence, Senate President Warren Petersen voiced his belief in the occurrence of a crime, highlighting the alleged bribery attempt involving state representatives.
Mayes refrained from including Faust’s claims in her report due to insufficient evidence for criminal charges, as noted by the Attorney General’s spokesman, Richie Taylor. The situation, described as “he said, he said,” lacked corroborative testimony beyond hearsay.
Underlying Factors
Republican skepticism remains over the eventual rate approval in May 2023 under David Lujan, appointed by Hobbs, following multiple past rejections. Lujan attributed Sunshine Residential’s financial difficulties and potential federal service shift as reasons for the decision, not any illicit agreement.
Jacobs contested this rationale, pointing out the state’s strategy to reduce reliance on group homes since 2021, impacting Sunshine’s revenue. She also noted that Sunshine was not contracted with the federal Office of Refugee Resettlement at the time, disputing any imminent service switch.
The Attorney General’s inquiry was narrowly focused on potential criminality, and Jacobs’ statements offered no new evidence beyond supporting Faust’s allegations.
Calls for Transparency
Senate Republicans have urged the release of investigation files to the public, seeking clarity on omitted details. “Arizonans deserve to see the evidence behind it,” stated Sen. T.J. Shope.
The Attorney General’s Office has pledged to release the files post-legal review, while continuing to assist in a related investigation by the Auditor General. Concurrently, Arizona House Republicans are conducting their own probe.
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