In response to recent controversies surrounding state contract awards under Governor Katie Hobbs’ administration, the Arizona Senate has approved legislation to strengthen oversight, prevent potential political favoritism, and protect taxpayer funds.
SB 1186 introduces mandatory disclosure requirements for companies applying for state contracts via Requests for Proposals (RFPs) or seeking certain state grants.
Under the bill, applicants must report any “thing of value” provided within the preceding five years. This includes anything given—directly or indirectly—by the company, its officers, directors, or their family members to the Governor; entities controlled by the Governor (such as campaign committees, joint fundraising committees, or inaugural funds); or organizations advocating for the Governor’s election or opposing their opponents, including political committees or nonprofits that make independent expenditures.
These disclosure obligations extend to companies currently holding state contracts, promoting ongoing transparency during the term of taxpayer-funded agreements. The bill also amends procurement record retention rules by prohibiting the destruction of notes taken during RFP evaluations. If such notes are destroyed in violation of the provision, related contracts awarded after the effective date may be resolicited.
🚨FOR IMMEDIATE RELEASE: Senate Passes Contracting Oversight Bill Following Hobbs Administration Scandals
The legislation addresses documented concerns from high-profile cases, including the Sunshine Residential Homes controversy—where the group home operator received a significant rate increase from the Department of Child Safety following substantial political donations tied to Governor Hobbs—and issues with a multibillion-dollar Arizona Health Care Cost Containment System (AHCCCS) Medicaid contract award.
In the latter, an administrative law judge highlighted serious flaws in proposal evaluation, scoring, fairness, and record-keeping, prompting questions about the integrity of the state’s procurement practices.
“What we have seen under the Hobbs administration exposed serious weaknesses in how state contracts are awarded and monitored,” stated bill sponsor President Pro Tempore T.J. Shope (R-LD16). “When billions of taxpayer dollars are involved, transparency cannot come after the fact. The public deserves to know who is seeking state contracts, what relationships exist, and whether decisions are being made fairly before money goes out the door. This legislation closes those gaps by requiring disclosures upfront, preserving critical records, and creating clear accountability standards so Arizonans can have confidence that contracts are awarded based on merit, not political connections.”
Supporters argue that SB 1186 modernizes oversight by focusing on pre-award transparency, in contrast to post-award reporting proposals. The bill amends Title 41 of the A.R.S., adding sections on disclosures for contracts and grants while strengthening record retention in procurement.
The measure now heads to the Arizona House for further consideration.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
Republican lawmakers in the Arizona House are continuing their investigation into Gov. Katie Hobbs over an alleged pay-to-play scheme.
On Monday, House Speaker Steve Montenegro (R-LD29) announced the House advisory team obtained outside counsel from out of state to investigate the connection between Hobbs and a Glendale group home, Sunshine Residential Homes, independently.
Montenegro said in a statement that the connection between the governor and the group home constituted special treatment derived directly from political donations. The lawmaker said that the addition of outside counsel was necessary to achieve the full independence an investigation of this significance needed.
“The advisory team has done serious, disciplined work, and their recommendation to bring in independent counsel is the right next step,” said Montenegro. “The House will not look the other way when taxpayer dollars and vulnerable children may have been used as leverage in a political scheme. We will follow the facts, consider the findings, and ensure transparency and accountability in state government. Arizonans deserve nothing less.”
The outside counsel is Justin Smith with the Missouri-based James Otis Law Group. The law group was founded by Trump’s solicitor general, D. John Sauer.
Smith is the listed counsel in President Donald Trump’s lawsuit against a woman, E. Jean Carroll, alleging battery and defamation. Carroll sued Trump for defamation after he publicly denied her 2019 claims of him sexually assaulting her in the 1990s.
According to Montenegro, Smith will conduct records review and interviews. All findings will go directly to the advisory team and House leadership.
Advisory team members are State Reps. Selina Bliss (R-LD1), David Livingston (R-LD28), Matt Gress (R-LD4), Quang Nguyen (R-LD1), and Neal Carter (R-LD15).
Last November, that advisory team was created to follow up on 2024 media reporting alleging the pay-to-play scheme within the Arizona Department of Child Safety under Hobbs’ direction.
In the summer of 2024, the Arizona Republic reported that Sunshine Residential Homes received a unique 30% rate increase following a donation exceeding $400,000 to Hobbs and the Arizona Democratic Party.
Much of 2024 was spent attempting to determine who, if anyone, was fit to conduct an investigation into the allegations against the governor.
One of the earliest requests came from Republican State Sen. T.J. Shope, who asked Attorney General Kris Mayes to investigate. Mayes complied initially, but was immediately hit with other Republican lawmakers and state leaders asking her to recuse herself due to an alleged conflict of interest.
State Rep. Matt Gress asked Maricopa County Attorney Rachel Mitchell and Auditor General Lindsey Perry to investigate.
All three leaders are investigating. Mitchell and Perry are coordinating on one investigation, while Mayes will conduct her own investigation.
As reported last November, the work of the House’s advisory team will coordinate with these parallel investigations by the auditor general and county attorney, and the attorney general.
In February 2024, Sunshine Residential Homes owners Elizabeth and Simon Kottoor maxed out their donations to Hobbs’ reelection campaign. Each gave the maximum $5,400 contribution amount.
In October 2022, the Kottoors gave Hobbs’ initial gubernatorial campaign $10,000.
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
Over the past month, Minnesota has been hard at work to set the gold standard for jaw-dropping fraud scandals under the watch of Democrat Governor Tim Walz. The Somali daycare scandal has turned the state into a national punchline—hundreds of millions in taxpayer dollars stolen in plain sight while Kamala Harris’ favorite “masculine” governor looked the other way.
Now, with Walz stepping aside from this reelection bid, a new contender for “most scandal-plagued governor on the 2026 ballot” has emerged: Arizona Governor Katie Hobbs. While Minnesota’s scandals have dominated headlines, Hobbs has been busy compiling a rap sheet that rivals what happened in the Land of 10,000 Lakes. But unlike Walz, Hobbs and her administration are under active criminal investigation.
A Pay-to-Play Scheme Engulfs the Hobbs Administration
The list of Hobbs’ scandals is a mile long and begins at the start of her tenure as governor. At that 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.
After immense political pressure, 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. Sunshine Residential donated $100,000 to the secret fund, which was suspicious enough. But after some additional digging by local reporters, an even deeper level of corruption was revealed—an alleged pay-to-play scheme between Hobbs and the group home.
According to the report, it turns out Sunshine Residential Homes doled out $400,000 to the Arizona Democratic Party, Hobbs’ gubernatorial campaign committee, and her aforementioned inaugural fund. Hobbs and her campaign finance manager even arranged a dinner with the government contractor to meet with the CEO in private.
After making the large donations, Sunshine was granted a 30 percent increase in their rates at a time when the Arizona Department of Child Safety cut loose 16 providers! On top of that, no other standard group home provider received a rate increase. This arrangement ensured that Sunshine Residential would receive millions in additional revenue at the taxpayers’ expense.
Hobbs’ is currently under three separate criminal investigations for this pay-to-play scheme, but it’s not the only financial scandal we’ve seen during her reign as governor…
15 months. That is how much time we have left until Arizona can elect a new governor, and it couldn’t come soon enough.
Since taking office in 2023, Katie Hobbs has been a complete disaster. The heights of her corruption have certainly been well documented. From her illegal use of public resources to solicit money for her inauguration, to an alleged pay-to-play scheme between Hobbs and an Arizona group home that donated to her inauguration, to shelling out $700,000 to a company owned by the brother of the now-former Office of Tourism Director to create a new state logo, Hobbs has proven that the people of Arizona are her lowest priority. And there are no signs that will change any time soon.
In the latest reveal of her efforts to turn her office into a jobs program for her political friends, it was discovered that Hobbs handed out nearly $600,000 in taxpayer money to a former Democrat politician and her assistant for two newly created jobs. These just add to the long line of other phony baloney jobs Hobbs has created so that her buddies can get paid six-figure salaries to sit around and do nothing on your dime. In fact, just last year, she added six new jobs in the newly created Office of Resiliency (whatever that is), four new employees in the Office of Tribal Relations, and three new in-house attorneys, to name a few. All total, Hobbs has increased executive employment costs by over 50%!
With all these new government jobs, you would think Arizona must be leading the way in the nation for job creation, but no. It’s just the opposite…
A massive new ad-buy released by State Solutions, Inc., a company connected to the Republican Governor’s Association, has placed Governor Katie Hobbs under a microscope urging her and her office to cooperate with the criminal investigation of her ongoing pay-to-play scandal with Sunshine Residential Homes, Inc. The new ad campaign represents a six-figure investment to pressure Hobbs to clean up corruption in Phoenix.
In a press release from State Solutions, spokesman Ryan Koopmans explained, “Where there’s smoke there’s fire, and Katie Hobbs’ administration is up in flames. “This pay-to-play scandal is so brazen, Democrat Attorney General Kris Mayes has launched a criminal investigation. Arizonans deserve answers, and Katie Hobbs needs to cooperate, not dodge questions.”
The ad explains, “Three days after a state agency denied a contractor’s request to charge taxpayers higher rates, a donation appeared: One hundred thousand dollars from the same company… into a slush fund controlled by Governor Katie Hobbs. Within months the Hobbs administration reversed course, approving the request for more taxpayer money. Pay-to-play so brazen, Democrat Attorney General Kris Mayes has launched a criminal investigation. Tell Hobbs to cooperate — and cut the corruption..”
The ad, in video and audio formats, is already hammering the Arizona airwaves and digital spaces.
As previously reported by AZ Free News, Hobbs has been implicated in an alleged “pay-to-play” corruption scheme with Sunshine Residential Homes (formerly Sunshine Group Homes), a major donor to her inaugural fund and the Arizona Democratic Party which enjoyed a major increase in contract rates from the Arizona Department of Child Services (DCS) shortly after the donations. The rates received by Sunshine Residential Homes was almost sixty percent according to an Arizona Republicreport.
Even more blatantly, CEO and founder, Simon Kottoor, of Sunshine Residential Homes and his wife, Elizabeth, were even appointed to Hobbs’ inauguration committee.
Hobbs’ refutations via spokesman Christian Slater impugned the accusations as unsubstantiated attacks from ““radical and partisan legislators,” adding, “Governor Hobbs is a social worker who has been a champion for Arizona families and kids. It is outrageous to suggest her administration would not do what’s right for children in foster care.”
These protestations have widely fallen flat though with Democrat Attorney General Kris Mayes sparring with Maricopa County Attorney Rachel Mitchell over their office’s dueling investigations. As reported by The New York Post, Treasurer Kimberly Yee, a Republican, urged Mayes to stand down after she asserted she has jurisdiction over any investigations.
“As the Treasurer of Arizona, I am responsible for overseeing, safekeeping, and managing the State of Arizona’s securities and investments, which are duties I take seriously. Arizona taxpayers need financial accountability and deserve to know how their money is being spent,” Treasurer Yee told the Post. “Providing state dollars to political donors is a grave misuse of public funds. ‘Pay to play’ and special favors have no place in state government.”
“I have requested a separate investigation to be conducted by the Maricopa County Attorney’s Office,” Yee said. “The Maricopa County Attorney’s Office has separate jurisdiction in this matter and the current investigation by the Attorney General’s Office raises concerns of potential ethical conflicts of interest in representing state agencies and officials involved in the alleged scheme.”
In a respone, Mayes wrote, “As with any other investigation our office conducts, we will follow the facts wherever they lead us. As with everything else we do, we are also fully cognizant of our ethical obligations and have taken appropriate measures to protect the interests of all concerned, including directing the Department of Child Services to obtain outside counsel in this matter.”
As of this report, it appears that the calls for Hobbs to submit and cooperate with investigators are not only coming from political action campaigns but also from within her own cabinet, and her own party.
