by Staff Reporter | May 17, 2025 | News
By Staff Reporter |
Governor Katie Hobbs has another secretive fund, this one used to cover legal expenses.
Hobbs has never disclosed the existence of this fund, which covered the costs of a lawsuit filed against her by former gubernatorial candidate Kari Lake. AZ Capitol Times uncovered and first reported on its existence after discovering a financial report from the parent company of the state’s electric utility giant, Arizona Public Service (APS), disclosing a gift of $100,000 in 2024 to cover Hobbs’ legal expenses.
State law enables Hobbs to maintain this secretive fund; it has for nearly a decade.
APS parent company, Pinnacle West Capital Corporation (PWCC), also gave to Hobbs’ other secretive fund for her inauguration.
Although Hobbs’ legal fund was discovered, the governor says she won’t be publicizing any other details about the donors or total amount collected.
Hobbs also attempted to keep her inaugural fund secret, but relented to public disclosure after receiving threats of litigation. Records revealed that Hobbs’ inaugural fund collected nearly $2 million, but the event cost less than $210,000. Government transparency watchdogs attempted to determine whether Hobbs’ inauguration team continued to collect donations in excess of a pre-event budget, to no avail.
PWCC’s singular donation of $250,000 to the fund covered the inauguration in its entirety — but Hobbs pocketed the excess of well over a million for her reelection bid next year. Other large donors to that fund issued $100,000 each: Blue Cross Blue Shield, the National Association of Realtors, and Sunshine Residential Homes.
That last major donor, Sunshine Residential Homes, received millions in contracts from the Arizona Department of Child Safety (DCS) after making around half a million in campaign donations to Hobbs and the Arizona Democratic Party — despite DCS denying pay increases to home operators and dropping 16 providers during the contract renewal process.
Michael Beyer, the newly named communications director for Hobbs’ reelection campaign, defended the legal fund and its secrecy in a statement to the AZ Capitol Times.
“Kari Lake baselessly challenged the results of a free and fair election she lost,” said Beyer. “We won eight times in court, and yet Lake fought the results all the way through November 2024 when she finally lost her last appeal to the Arizona Supreme Court.”
Beyer recently joined the Hobbs campaign following his stint as the communications director for Virginia Senator Tim Kaine’s re-election campaign. Beyer’s past communications work includes the campaign for Mississippi’s 2023 Democratic gubernatorial candidate Brandon Presley, the Ohio Democratic Party, New Hampshire Democratic Party, and the Democratic Governors Association.
Some question whether the funds are another example of alleged “pay-to-play” occurring within the governor’s office. Hobbs approved legislation permitting public power entities like APS to engage in securitization. APS wrote the legislation.
Hobbs issued a defense of her passage of the bill, saying it would lower energy costs and improve grid resiliency.
“By working with bipartisan legislators I put in safeguards to ensure everyday Arizonans, not utilities, will benefit from securitization. And I made sure this bill will provide a tool to grow our energy economy,” said Hobbs. “Because of this bill, Arizona families will save money and we will help create more jobs in a clean energy economy that, in just the last few years, has brought nearly $18 billion in investments to our state and created over 18,000 quality jobs.”
Hobbs also vetoed legislation from Senate President TJ Shope requiring companies seeking state contracts to list all donations given in the past five years to the governor.
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by AZ Free Enterprise Club | May 14, 2025 | Opinion
By the Arizona Free Enterprise Club |
Since becoming Governor of Arizona in 2023, Katie Hobbs’ name has been synonymous with corruption. Now, one of her latest vetoes shows the lengths she is willing to go to protect her own schemes.
Buried on the afternoon of Friday, May 2, Hobbs vetoed SB 1612, along with 21 other bills. Sponsored by Arizona State Senator TJ Shope, SB 1612 would have required anyone applying for grants to various state agencies to disclose gifts, donations, or other support provided to the sitting governor. That sort of transparency should be something that every Arizonan can get behind—Republicans, Democrats, Independents, you name it—unless, of course, your agenda doesn’t involve the best interests of Arizona citizens, right Katie Hobbs?
This whole story starts at the very beginning of Hobbs’ tenure as governor. If you’ll recall, at the time, Hobbs set up a shady slush fund to provide donors with a conduit to buy political favor from her administration. While setting up and managing the fund, Hobbs illegally used public resources—like the state’s website—to solicit money for her inauguration. And she also tried to stop the disclosure of the names of those who donated to her inaugural fund.
But after immense political pressure and public records requests filed by groups like the Arizona Freedom Foundation (who operates AZ Free News), Hobbs finally released the names of the donors. One of the names of the groups on the list was Sunshine Residential Homes Inc., a for-profit company that contracts with the State of Arizona to provide some child welfare services. At the time, Sunshine Residential Homes made a donation of $100,000. But in June 2024, an eye-opening report revealed a deeper level of corruption—an alleged pay-to-play scheme between Hobbs and the group home…
>>> CONTINUE READING >>>
by AZ Free Enterprise Club | Mar 12, 2025 | Opinion
By the Arizona Free Enterprise Club |
If the Hobbs administration has proven itself to be uniquely skilled at anything over the past two years, it’s incompetence and negligence. But now, Arizona’s governor has taken the next step toward outright fraud.
As a part of her recent budget proposal, Hobbs has asked for a supplemental appropriation to the Arizona Department of Economic Security (DES) to cover a shortfall in the Division of Developmental Disabilities (DDD). Without the additional funding, the DDD could run out of money by May, affecting many people under a program that provides services to Arizonans with disabilities.
For weeks, Hobbs has been trying to push the blame onto the legislature, but the reality is, she has no one to blame but herself.
The problem stems from a COVID-era program funded entirely by the federal government that would pay parents who operate as caregivers for their children with disabilities—the Parents as Paid Caregivers program. The program was intended to be temporary, but Hobbs received approval from the federal government in February 2024 to make it permanent.
That approval came with a catch. Beginning on April 1, the State of Arizona would have to cover 32% of the costs, which Hobbs attempted to get funding for in last year’s budget. Her proposal was not approved by the legislature, which she mutually agreed to as part of the budget process. But she continued funding the program anyway—likely believing that she would be able to flip the legislature in November’s election or bully lawmakers into giving her the money. She failed on both counts and now has created a shortfall in the DDD program that has exceeded $100 million…
>>> CONTINUE READING >>>
by AZ Free Enterprise Club | Jun 15, 2024 | Opinion
By the Arizona Free Enterprise Club |
June has been off to a brutal start for Arizona Governor Katie Hobbs. She kicked off the month by breaking her own hiring freeze to bring in a new press secretary. Then, a few days later, a Maricopa County Superior Court judge ruled that Hobbs violated the law when she sidestepped the Senate’s confirmation process for agency directors. And to top it all off, an eye-opening report was released uncovering an alleged pay-to-play scheme between Hobbs and an Arizona group home.
This shouldn’t come as much of a surprise. After all, this is the same Katie Hobbs who broke the law to take credit for the Republican tax rebate. And it’s the same Katie Hobbs who required the nonprofit behind her $30 million medical debt relief program to give her credit. But this latest scandal shows that Hobbs’ corruption has reached a new level.
According to the report, Sunshine Residential Homes has donated approximately $400,000 toward the Arizona Democratic Party, Hobbs’ gubernatorial campaign, and her inaugural fund. And what did the group home receive in return? A nearly 60 percent rate increase! And this was at a time when the Arizona Department of Child Safety (DCS) cut loose 16 providers, and no other standard group home provider received a rate increase.
That’s convenient.
Sunshine Residential Homes could potentially receive millions of dollars more at the taxpayers’ expense from their investment (sorry…donation). And that must have their CEO—who also happened to serve on Hobbs’ inaugural committee—excited.
Hmmm…Hobbs’ inauguration fund. Do you remember that?
This entire saga began when Hobbs set up a shady inaugural slush fund to provide donors with a conduit to buy political favor from her administration…
>>> CONTINUE READING >>>
by Daniel Stefanski | Jun 17, 2023 | News
By Daniel Stefanski |
An Arizona Republican legislator has renewed his efforts to hold the state’s Democrat chief executive accountable to the rule of law.
On Wednesday, Representative David Livingston filed a complaint and request for investigation with Arizona Attorney General Kris Mayes, regarding Governor Katie Hobbs’ use of state resources to influence elections pursuant to state statutes. This action from Livingston follows an earlier attempt from the legislator to obtain a legal opinion on “whether Arizona law allows a Governor-Elect to fundraise for political entities that make expenditures to influence elections through a state website promoting inaugural events.” In this latest effort, Representative Livingston revealed that Attorney General Mayes had “declined to provide a legal opinion, stating there were factual questions that made the issue inappropriate for a legal opinion.”
Livingston released the following statement in conjunction with his announcement: “State law prohibits using public resources, including websites, to influence elections. As the Attorney General has already acknowledged, there are unanswered factual questions here that warrant an immediate and thorough investigation. If Governor Hobbs had simply transferred the leftover funds to the state protocol account like former Governors have done, it would not be necessary to file my complaint. But the Governor’s unprecedented actions and refusal to provide information to me about where the funds went, who controls the funds, and how the funds will be spent left me with no choice. As the state’s chief legal officer charged with investigating potential violations of Title 16, the Attorney General must scrutinize these transactions and seek judicial relief if necessary to remedy past violations and prevent future violations of state law.”
The state lawmaker argues that the Arizona Attorney General’s Office “is empowered to investigate potential violations of Title 16,” pointing out that “Mayes invoked this authority earlier this year when she filed an unsuccessful lawsuit against Cochise County, citing concerns that without taking legal action, the Cochise County Board of Supervisors might hide actions that should be done publicly in compliance with Arizona’s open meeting law.”
This issue rose to importance earlier this year as Arizona lawmakers received murky and incomplete information about Hobbs’ inaugural fund, which totaled more than $1.5 million in the lead-up to her inauguration at the State Capitol on January 5. After multiple weeks of questions, Hobbs’ campaign manager released the donor list, showing 120 contributors to the fund.
Even with the uncovered donor list, lawmakers wanted more transparency from Hobbs, but they weren’t finding the level of cooperation they sought from her Office. Reports showed that the inauguration cost $207,000, which was a fraction of the funds received from the Hobbs’ Inaugural Fund. With knowledge of how much was raised and spent from the fund, Senate President Warren Petersen and House Speaker Ben Toma sent a letter to the Governor on January 26, asking her to “commit the balance of her $1.3 million inaugural fund proceeds to the state, as past governors have, for the sake of transparency & accountability to the people of Arizona.”
The legislative leaders wrote that “Given….the Inaugural Fund’s own descriptive title, Arizonans would have reasonably anticipated that any excess funds would be used for state interests. In any event, given the public resources that were utilized to solicit funds for the Inaugural Fund and to host the inauguration, it would be inappropriate to utilize any monies in the Inaugural Fund to influence an election.”
The governor’s actions in this matter prompted the introduction of SB 1299, sponsored by Senator Wendy Rogers, which dealt with the governor reporting inauguration expenses. The bill required “the Governor’s Office to publish on its website, within 15 days after the inauguration ceremony, information detailing each organization that organized, supported or funded the ceremony.” The proposal was passed out of both legislative chambers with broad bipartisan support and signed into law by Hobbs.
Representative Livingston’s communication to Attorney General Mayes references this legislation, stating that SB 1299 “is no impediment to your investigation. Because SB 1299 requires all inaugural donations to be deposited directly into the state protocol account, it prohibits future Governors and Governors-Elect from unlawfully using state resources to engage in political fundraising. However, SB 1299 does not have retroactive application and does not remedy past violations of A.R.S. 16-192.”
The legislator ends his referral letter with an exhortation for the state’s top cop to take his complaint seriously, writing, “No one is above the law, including Governor Hobbs.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
