Phoenix – State Attorney General Kris Mayes said Friday that her office will not pursue criminal charges against Governor Katie Hobbs following an inquiry into alleged pay‑to‑play dealings with Sunshine Residential Homes, a large group‑home operator that received a rate increase after contributing to the governor’s inaugural fund.
Investigation findings
Mayes’ statement noted that investigators did not uncover the specific quid pro quo required to support a bribery charge. While the governor denied any involvement in the decision to raise Sunshine’s rates, the probe highlighted a pattern of donations: Sunshine gave $200,000 to the Arizona Democratic Party in the months before Hobbs’ 2022 election, $100,000 to her inaugural fund in early 2023, and another $100,000 to the party in August 2023. The company’s founders, Simon and Elizabeth Kottoor, each contributed $10,000 to Hobbs’ campaign.
Sunshine sought a rate increase in 2022, which was denied shortly after Hobbs took office. A second request was approved in May 2023, raising the per‑bed rate from $149 to $195. The Arizona Department of Child Safety said Sunshine warned the state it would reduce its bed capacity if the increase was not granted, and would instead use the beds for unaccompanied immigrant children under a federal program.
Impact on child‑welfare capacity
Sunshine operates 28 homes with roughly 290 beds, providing about 70% of sibling placements in foster care across metropolitan Phoenix. The Department of Child Safety warned that losing those beds could force siblings to be split among different facilities, a serious concern for the child‑welfare system. The agency’s statement emphasized the “potential loss of approximately 290 beds” as a capacity issue that required careful consideration.
All providers with existing contracts received rate increases in a 2024 contract round, and Sunshine’s rate rose again to $234 per bed. The department said then‑Director David Lujan approved the increase and that the governor and her staff were not involved.
Related investigations and political context
Republican state Sen. T.J. Shope highlighted Sunshine’s scrutiny in the death of 9‑year‑old Jakob Blodgett, who died in a Sunshine home in Glendale after complications from Type 1 diabetes. A lawsuit alleges the group‑home failed to manage his condition properly. Maricopa County Sheriff’s Office interviews with Sunshine staff remain part of an ongoing criminal investigation, though no charges have been filed.
Separate inquiries continue under Republican Maricopa County Attorney Rachel Mitchell and the state auditor general. The outcomes of those investigations have not yet been disclosed.
Political ramifications
The investigation has become a focal point in Governor Hobbs’ bid for a second term. Republican U.S. Rep. Andy Biggs has run advertisements emphasizing the probe, framing it as evidence of partisan misuse of state resources. Hobbs maintains she had no role in the rate decision and that the investigation’s conclusions vindicate her administration.
Mayes, also a Democrat, said the findings underscore a need for legislative reform to increase transparency around political donations and contract awards. She urged lawmakers to consider measures that would make the process clearer to the public.
The case illustrates the ongoing tension in Arizona politics between the Democratic governor’s office and Republican legislators who are pushing for stricter oversight of state contracts and campaign financing.
Original reporting: Alexandria, VA News – WTOP News — read the source article.
