by Staff Reporter | Jun 15, 2024 | News
By Staff Reporter |
Governor Katie Hobbs is under investigation for an alleged “pay-to-play” scheme with a group home that donated to her inaugural fund and the Arizona Democratic Party.
Last May, following the donations, the Arizona Department of Child Services (DCS) drastically increased the rates for the for-profit, state-contracted group home operator and major Democratic Party contributor, Sunshine Residential Homes (formerly Sunshine Group Homes). The nearly-60 percent rate increase was approved several months after the company gave $100,000 to Hobbs’ “dark money” inaugural fund. That $100,000 rendered to them by the second-largest donor after Arizona Public Service (APS). The governor raised nearly $2 million.
As the Arizona Republic reported, that $100,000 to the fund came several days after the group home operator was denied a rate increase in December 2022. No other group homes have been awarded rate increases under Hobbs, and none came close to the rate granted to Sunshine Residential Homes: over $230 a day, where the average was about $170.
The governor’s fund earned the unofficial “dark money” pejorative following reports that Hobbs pushed for $250,000 donations to her inaugural event, though the event itself only cost around $200,000.
Sunshine Residential Homes also donated $200,000 to the Arizona Democratic Party in September and October of 2022, and another $100,000 to the party in August 2023.
The group home operator’s CEO and founder, Simon Kottoor, and his wife, Elizabeth, also donated $10,000 collectively to Hobbs’ campaign.
Hobbs appointed the Kottoors to her inaugural committee.
Last year, the group home operator received a nearly 60 percent increase in rates: much higher than the rates awarded to other group homes, and unique given DCS choosing to cut contracts with dozens other group homes: 16, to be exact.
DCS blamed budget constraints coupled with a desire to scale back on the reliance of group homes for the contract denials.
Hobbs’ spokesman, Christian Slater, claimed the allegations came from a place of unsubstantiated scrutiny similar to other attacks by “radical and partisan legislators.”
“Governor Hobbs is a social worker who has been a champion for Arizona families and kids,” said Slater “It is outrageous to suggest her administration would not do what’s right for children in foster care.”
Some have questioned whether Sunshine Residential Homes wired additional funds to Hobbs’ inaugural fund after their $100,000 donation cleared in February 2023, or whether the group home operator or its executives issued donations to other groups operated by Hobbs, like the “An Arizona For Everyone” entity.
An Arizona For Everyone, a nonprofit, was activated in December 2022 and voluntarily dissolved in September 2023. No tax filings exist for the nonprofit on the IRS public search portal of tax-exempt entities.
Last Thursday, Attorney General Kris Mayes announced an investigation into the matter. On Friday, Mayes also ordered Maricopa County Attorney Rachel Mitchell to back off her investigation and for Auditor General Lindsey Perry to stay away.
“It would not be appropriate or in the best interest of the state to conduct parallel investigations into the same matter. Furthermore, a separate process conducted by the MCAO could jeopardize the integrity of the criminal investigation that my office will now proceed with,” wrote Mayes.
However, Treasurer Kimberly Yee urged Mitchell to continue her own investigation into Hobbs to complement Mayes’ investigation. In a press release on Monday, Yee announced request letters to both Mitchell and Mayes.
“Arizona taxpayers deserve financial accountability. Giving state dollars to political donors is a grave misuse of public funds,” posted Yee on X.
In her letter to Mitchell, Yee advised that Mitchell continue her investigation over Mayes’ conflict of interest.
“Pursuant to these legal authorities and due to concerns related to Attorney General Mayes’ ethical conflict of interests because her office is required to provide legal services to the agencies at issue and the fact that her representatives have personal and professional relationships with those individuals potentially involved in any alleged wrong-doing, I respectfully request that you investigate the allegations that have occurred in your jurisdiction, Maricopa County,” wrote Yee.
In Yee’s letter to Mayes, the treasurer advised the attorney general that her assertion of singular control over any investigation — especially one involving the state agencies she represents — was inappropriate and unlawful. Yee suggested that Mayes transfer the investigation wholly to Mitchell or another independent county attorney.
“[T]hat is the only action that will ensure the integrity of the investigation and avoid the duplication of efforts you raise as a concern in asserting sole jurisdiction,” wrote Yee.
Sunshine Group Homes was recognized as a nonprofit by the IRS until 2022, when they were placed on the auto-revocation list that August (EIN: 86-0815254).
According to the latest publicized tax filings from a decade ago, the Kottoors received a collective $623,500 annually in reportable compensation from related organizations.
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by AZ Free Enterprise Club | Jun 12, 2024 | Opinion
By the Arizona Free Enterprise Club |
There are plenty of problems with the Arizona Commerce Authority. Since its inception in 2011, criticisms were raised concerning its freewheeling powers to dole out taxpayer money with practically no legislative oversight and broad exemptions from important guardrails such as the prohibition of using outside counsel (rather than the Attorney General’s office.) These issues have resurfaced over the years in critical Auditor General reports that have highlighted the insufficient reporting and record keeping for the administration of grants and awards provided by the agency to private businesses. This led to a mere 2-year extension of the agency in 2016, and a controversial reauthorization in 2018 when Republicans and Democrats alike banged the table for reforms. And most recently, the agency has come under fire by the Attorney General herself, for unconstitutional gifts in the way of wining and dining and Super Bowl tickets for CEOs.
Despite consistent criticism across the aisle and over the years, the ACA has evaded any real substantial reforms. That could very well change this year.
There now seems to be bipartisan interest in reining in an unaccountable agency with a $226M budget and a multi-million-dollar slush fund…
>>> CONTINUE READING >>>
by Daniel Stefanski | Jun 11, 2024 | News
By Daniel Stefanski |
Maricopa County Attorney Rachel Mitchell is attempting to bring justice for an Arizona victim but is meeting resistance from the state’s attorney general.
Earlier this month, the Maricopa County Attorney’s Office announced that it had “filed a motion with the Arizona Supreme Court in a move to ultimately seek a warrant of execution for Aaron Brian Gunches.”
Gunches has been sentenced to death twice over the murder of the ex-husband of his girlfriend in 2002.
“For nearly two years, we’ve seen delay after delay from the governor and the attorney general,” said Maricopa County Attorney Rachel Mitchell. “The commissioner’s report was expected at the end of 2023, but it never arrived. In a letter received by my office three weeks ago, I’m now told the report might be complete in early 2025. For almost 22 years, Ted Price’s family has been waiting for justice and closure. They’re not willing to wait any longer and neither am I.”
Attorney General Mayes pushed back against Mitchell’s legal effort, writing, “Only the Attorney General is authorized to seek warrants of execution. Despite what rogue Maricopa County Attorney Rachel Mitchell may believe, there is only one Attorney General at a time – and the voters decided who that was 18 months ago. Just three weeks ago, I notified County Attorney Mitchell about my plans for seeking warrants of execution a little over six months from now after the completion of the independent death penalty review. But apparently, conducting this cynical performance to look tough in her competitive re-election primary is more important to the County Attorney than following the law.”
Mayes added, “Make no mistake, I will vigorously defend the authority of this office – and will not stand by as the Maricopa County Attorney attempts to create chaos to save her political career. My office will next move to strike this motion and prevent County Attorney Mitchell from continuing her unauthorized actions related to the death penalty.”
Mitchell disagreed with Mayes’ assessment of her legal limitations in this matter. She said, “I believe that as an attorney who acts on behalf of the state, I also can appropriately ask the Supreme Court for a death warrant. The victims have asserted their rights to finality and seek this office’s assistance in protecting their constitutional rights to a prompt and final conclusion to this case.”
The saga over Gunches execution started in late-2022, when former Arizona Attorney General Mark Brnovich asked the Arizona Supreme Court for a warrant of execution. After the January 2, 2023, transition of power to Katie Hobbs and new Attorney General Kris Mayes, the state desperately attempted to reverse the actions that set Gunches’ execution process into motion. These efforts proved to be unsuccessful, however, when the high court did, in fact, grant the warrant of execution, ordering the state to put Gunches to death on April 6, 2023. The governor refused to comply with the court-issued warrant, stating that the State would not be seeking to carry out the execution at this time. Hobbs’ decision triggered court filings from Maricopa County Attorney Rachel Mitchell and Republican leaders in the Arizona Legislature.
The Arizona Supreme Court declined to force the State of Arizona to carry out the issued warrant for Gunches but would not withdraw it either. The warrant expired last year, leading to County Attorney Mitchell’s attempt to seek this action before the state’s high court.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
by Daniel Stefanski | Jun 11, 2024 | News
By Daniel Stefanski |
Government officials across different jurisdictions are attempting to lay claim to the investigation of the Arizona Governor’s Office over a recent media report that the Hobbs administration may have engaged in an improper, or unethical, or unlawful relationship with an organization receiving taxpayer dollars.
Last week, after her Criminal Division head confirmed the existence of an inquiry, Arizona Attorney General Kris Mayes transmitted two letters to Maricopa County Attorney Rachel Mitchell and Arizona Auditor General Lindsey Perry, over their respective Office’s plans to investigate the Hobbs administration over a recent revelation of alleged impropriety with taxpayer funds from a state agency. Attorney General Mayes told County Attorney Mitchell that “it would not be appropriate or in the best interest of the state to conduct parallel investigations into the same matter,” and that “a separate process conducted by the MCAO could jeopardize the integrity of the criminal investigation that my office will now proceed with.”
Mayes similarly told Auditor General Perry that “while [the Auditor General’s] office is statutorily authorized to examine records and conduct audits at the direction of the Joint Legislative Audit Committee, at this time, the assistance of [her] office is not needed by the Attorney General’s Office for our investigation.”
The letters from Mayes to Mitchell and Perry followed a communication from State Representative Matt Gress to the Maricopa County Attorney, which informed the Republican prosecutor that “the Auditor General’s Office stands ready to partner with you in getting the facts about this troubling matter [the interconnected web of financial and political relationships between Sunshine Residential Homes, Inc. and Governor Katie Hobbs].” Gress, the chairman of the Joint Legislative Audit Committee, told County Attorney Mitchell that “we will allocate the resources the Auditor General needs to help restore what appears to be a major breach of trust in our government.”
After receiving letters from Senator T.J. Shope and Gress, County Attorney Mitchell let them know that her office was “contacted by the Arizona Auditor General asking that the Maricopa County Attorney’s Office serve as the prosecution office that will work with them while they conduct an investigation into this matter.”
Less than a week ago, The Arizona Republic broke a story about 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.” The alleged action to approve the rate increase for the one organization was made while “DCS has denied pay increases to home operators and cut loose 16 providers during the contract renewal process.” The Republic also asserted that “no other standard group home provider was approved for any rate increase during Hobbs’ tenure.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
by Daniel Stefanski | Jun 9, 2024 | News
By Daniel Stefanski |
Arizona Governor Katie Hobbs’ difficulties may be increasing as a result of a recent media report about alleged selective treatment with taxpayer dollars for a state-based organization.
Hours after The Arizona Republic broke the story about 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,” State Senate President Pro Tempore T.J. Shope sent a letter to Attorney General Kris Mayes and Maricopa County Attorney Rachel Mitchell, asking their offices to “examine the facts surrounding the alleged decision and determine if conduct by any of the involved parties warrants a criminal or civil investigation.”
The reported action to approve the rate increase for the one organization was made while “DCS has denied pay increases to home operators and cut loose 16 providers during the contract renewal process.” The Republic also asserted that “no other standard group home provider was approved for any rate increase during Hobbs’ tenure.”
Shope said that he was “deeply disturbed by recent reports in the media outlining what can only be described as a pay-to-play scheme between Governor Katie Hobbs’ Office, the Arizona Department of Child Safety, and political donors.”
The letter from the powerful Arizona state senator noted that “these reports, if verified, raise serious public corruption questions that could implicate several state laws, including potentially: Bribery, Fraud schemes and artifices, Arizona Procurement Code, Conflict of interest, and Illegal expenditure of state monies.”
In a subsequent post to his “X” account, Senator Shope said, “We must find the truth of what Governor Hobbs knew and at what time she knew, as well as what she directed based on that knowledge.”
The Chief Counsel of the Arizona Attorney General’s Criminal Division sent a letter back to Senator Shope on Thursday, informing the legislator that his division was “statutorily authorized to investigate the allegations and offenses outlined in [his] letter [and would] be opening an investigation.”
Karrin Taylor Robson, a former Republican candidate for Arizona Governor, weighed in on the matter, writing, “This is why people have lost faith in our elected leaders. Governor Hobbs owes the people of Arizona a complete and total explanation as to how something like this could ever be allowed to happen. Accountability matters.”
The Arizona Republic shared a quote from Hobbs’ spokesperson in response to the Shope letter, which stated, “Like every other ‘investigation’ launched by this chaotic and radical legislature, this is another desperate, partisan stunt. It will don nothing by show the administration put the best interest of Arizona first.”
The Arizona Republic also highlighted that “the news website that documented Governor Hobbs’ private event with Sunshine Residential Homes CEO took down the story,” in an interesting development to the saga.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
