By Matthew Holloway |
Republican Rep. Abraham Hamadeh (AZ-08) said Arizona has a “captured government” after Democratic Attorney General Kris Mayes declined to prosecute Gov. Katie Hobbs over allegations involving political contributions connected to Sunshine Residential Homes and rate increases the company received from the Arizona Department of Child Safety (DCS).
Hamadeh made the remarks during an appearance on James T. Harris’ “The Conservative Circus,” calling Mayes’ two-year criminal investigation “a sham” that he said was intended to clear Hobbs before the November election.
“Arizona has a captured government right now,” Hamadeh said.
“The most important thing we have to do this November is get rid of both Kris Mayes and Katie Hobbs.” Hamadeh said. Hamadeh accused Mayes and Hobbs of protecting one another and said the state’s news media had failed to hold either official accountable.
“The attorney general is not going to hold the governor accountable,” Hamadeh said. “This is what you call a captured government. So it is up to We the People to show them accountability by voting them out of office.”
The congressman also tied the decision to his continuing claim that Mayes is an “illegitimate attorney general,” arguing that Hobbs withheld evidence while serving as secretary of state during Hamadeh’s unsuccessful challenge to the 2022 attorney general election. Mayes defeated Hamadeh by 280 votes after a recount, a result later recounted in an Arizona Court of Appeals decision rejecting Hamadeh’s request for a new trial.
Mayes announced earlier this month that her office found no evidence of a quid pro quo connecting Sunshine’s political contributions to the company’s DCS rate increases.
“After two years of investigation, consisting of multiple interviews, reviews of campaign-finance records, procurement records, bank documents, and State emails and chats, totaling over one terabyte of data, including more than 100,000 documents, the investigation has not uncovered any evidence of the necessary quid pro quo to support a bribery charge,” Mayes said.
The attorney general’s seven-page legal memorandum said investigators conducted 12 interviews and reviewed campaign-finance records, procurement documents, bank records, and state communications. The memorandum concluded that prosecutors lacked evidence establishing a reasonable likelihood of conviction for bribery or related offenses.
Hobbs declined an in-person interview and submitted two written statements through her attorneys on Aug. 17, according to the memorandum. She stated that she had never discussed Sunshine’s rates or DCS contracting decisions with Sunshine founder and CEO Simon Kottoor or anyone affiliated with the company. Hobbs also denied directing anyone to intervene and said Sunshine’s political contributions did not influence state agency decisions.
Sunshine gave $200,000 to the Arizona Democratic Party before Hobbs’ 2022 election, $100,000 to her inaugural fund and another $100,000 to the state party in August 2023. Kottoor and his wife, Elizabeth, also made contributions to Hobbs’ gubernatorial campaigns.
The company received a mid-contract rate increase in May 2023 that raised its payment to $195 per bed, followed by an increase to $234 per bed during an April 2024 contract renewal. The AG memorandum said Sunshine’s rate increased 56% between 2019 and 2024. Two other providers received larger percentage increases over that period while retaining lower daily rates.
Mayes’ Investigation found that DCS officials knew about Sunshine’s political contributions as they considered its request. Then-DCS official Robert Navarro told colleagues during a February 2023 meeting that Sunshine was likely to seek an increase and was a donor to Hobbs, according to the memorandum. Navarro told investigators that the donations created perceived pressure. The Attorney General’s Office concluded that any perceived pressure resulted from Navarro’s own knowledge of the contributions and found no evidence that Hobbs or her office directed DCS to increase Sunshine’s rate.
The memorandum concluded that Sunshine’s rate increases resulted from its leverage as one of Arizona’s largest congregate-care providers. Sunshine accounted for approximately 20% to 25% of the state’s non-Division of Developmental Disabilities group-home beds. DCS officials told investigators that the company had threatened to move beds to the federal Office of Refugee Resettlement, which paid higher rates to house unaccompanied migrant children. Officials said losing Sunshine’s capacity would have strained the foster-care system and reduced beds available to keep siblings together.
Mayes called for legislation increasing transparency around political contributions from state contractors when she announced the decision. Hobbs previously vetoed two bills sponsored by Republican Senate President Pro Tempore T.J. Shope (R-LD16) that would have required certain companies seeking state contracts or grants to disclose political contributions and required agencies to retain procurement records.
Mayes’ criminal division recommended closing its pay-to-play investigation while keeping the matter open for the limited purpose of assisting the Arizona Auditor General. A separate review involving the Auditor General and Maricopa County Attorney Rachel Mitchell remains ongoing. The Arizona House has also commissioned an independent investigation.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
