Hobbs Called Into Question After Reported Pay-To-Play Scheme Uncovered

Hobbs Called Into Question After Reported Pay-To-Play Scheme Uncovered

By Daniel Stefanski |

Arizona legislative Republicans are readying the wheels of accountability and oversight after a bombshell report concerning a state department under the governor’s purview.

This week, the Arizona Republic reported on the Arizona Department of Child Safety “approv[ing] what amounts to a nearly 60% increase in the rate that Sunshine Residential Homes Inc. charges to care for a child for a day, meaning potentially millions of dollars more going to the company at taxpayers’ expense.” This action was taken as “DCS has denied pay increases to home operators and cut loose 16 providers during the contract renewal process.” The Republic asserted that “no other standard group home provider was approved for any rate increase during Hobbs’ tenure.”

The report highlighted that this organization “has undertaken a new six-figure spending campaign benefiting Hobbs and Democratic politics in Arizona.” According to a release issued by Senate Republicans, the donations from Sunshine Residential Homes totaled “approximately $400,000, going towards the Arizona Democratic Party, Hobbs gubernatorial campaign, as well as her inauguration fund.” The Republic also stated that Sunshine’s CEO “was on Hobbs’ inaugural committee.”

Senate President Warren Petersen vowed to hold the Governor’s Office accountable for this action from DCS. He wrote, “Arizonans deserve to know how their elected officials are spending their money, and this case raises a major red flag with what’s happening behind closed doors on the ninth floor. With the state in the middle of a budget shortfall, and with what appears to be a pay-for-play scheme now exposed, the Legislature has a lot of questions we will be seeking answers to from both the Governor’s office and DCS. Our citizens deserve better. Rest assured, we will continue to serve Arizonans as the check and balance against any abuse of power displayed by our Executive and the agencies under her administration.” 

Former State Legislator David Lujan serves as the Cabinet Executive Officer of DCS. He was not confirmed by the Arizona Senate to serve as a “director” after Hobbs pulled his name – and many others – from the nomination process after several of her appointments faced intense scrutiny by Republicans in that legislative body.

“This is a disgusting abuse of taxpayer dollars to further her political career, and our hardworking citizens deserve answers as to how she got away with this,” said Senate President Pro Tempore T.J. Shope, Chairman of the Senate Committee on Health & Human Services. “Knowing Arizona’s Governor and the Arizona Democratic Party are providing preferential treatment to a facility alleged to have engaged in negligence leading to the death of a child is unconscionable. Our children are our most precious population, and the state should be doing everything in its power to discourage abuse and neglect, not reward it. How can we trust Hobbs, Democrats, and DCS after these disgraceful transactions that wreak of corruption? This is a prime example of why I sponsored SB 1571. The public has a right to know who is donating to Hobbs, and what favors those entities are receiving in return.”

SB 1571 “instructs candidate committees for statewide candidates to file campaign finance reports during each calendar quarter comprising the forty-eight-month period before the general election,” according to the overview from the Arizona House of Representatives. After receiving overwhelmingly bipartisan support in both the state House and Senate, it was signed into law by Hobbs in April.

Arizona State Treasurer Kimberly Yee weighed in on the shocking news from the Hobbs’ administration, saying, “This is highly concerning and raises more questions than it answers. ‘Pay to Play’ and special favors have no place in state government.”

Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.

FTX Asks Arizona Legislators To Return Contributions

FTX Asks Arizona Legislators To Return Contributions

By Corinne Murdock |

In a “confidential” letter issued Sunday, debtors of fallen crypto giant FTX asked for refunds from Arizona politicians, political action committees, and other beneficiaries. Arizona politicians received at least $33,200; debtors estimate total FTX donations at $93 million, however FTX executives admitted using dark money routes to finance their favored political allies. 

The Arizona Democratic Party (ADP); Reps. Ruben Gallego (D-AZ-03), Eli Crane (R-AZ-02), Debbie Lesko (R-AZ-08), David Schweikert (R-AZ-01); and Sen. Mark Kelly (D-AZ) received FTX funding. 

Of the $24.7 million given to Republicans, FTX co-CEO Ryan Salame donated $2,900 to Lesko, $2,900 to Schweikert, and $2,900 Crane. Of the $8.4 million given to Democrats, FTX Director of Engineering Nishad Singh donated $2,900 to Kelly. Of his $38 million, FTX CEO Samuel Bankman-Fried donated $11,600 to Gallego and $10,000 to ADP.

As of press time, only Schweikert and Gallego have responded to the FTX scandal by divesting themselves of the funds. Schweikert donated the funds to various, unnamed charitable organizations, while Gallego gave the funds to Rep. Andrea Salinas (D-OR-06) who Bankman-Fried attempted to defeat in the primary election through millions to her opponents.

In a press release, FTX Debtors stated that they have the right to take legal action if these contributions aren’t refunded voluntarily. They noted that any payments or donations to third parties, even charities, could be subject to FTX’s recovery efforts.

Gallego called for an investigation into the FTX collapse, in response to Elon Musk pointing out that Bankman-Fried primarily donated to Democrats.

“Musk knows about crypto schemes. FYI we should investigate FTX collapse,” said Gallego.

For years, Schweikert has advocated for maintaining freedom and limiting government oversight of cryptocurrency and other blockchain technologies. He’s been a longtime member of the bipartisan Congressional Blockchain Caucus, and introduced multiple bills in past years to advance crypto development. 

Schweikert hasn’t issued a public comment about his FTX funding either, though he’s listed as having donated the funds.

Donations directly to campaigns weren’t the only ones influencing Arizona politics.

As AZ Free News reported last year, Bankman-Fried gave the most, $27 million, of his funding to a Phoenix-based political action committee (PAC), Protect Our Future PAC. The PAC treasurer, Dacey Montoya, is a key player in the Democratic dark money network. Montoya served as treasurer for Kelly and Gov. Katie Hobbs’ campaign committees, along with numerous other political committees and PACs across at least 16 other states. Montoya also described herself as a friend of Hobbs.

Kelly, along with Gov. Katie Hobbs, gave over $1 million to Montoya for her work. 

Protect Our Future PAC shipped its millions outside of Arizona, specifically to 19 Democratic House candidates including Reps. Lucy McBath (D-GA-07), Maxwell Frost (D-FL-10), and Jasmine Crockett (D-TX-30).

Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.