Arizona Governor Katie Hobbs is in the hot seat and facing investigation for alleged “pay to play” schemes involving the Sunshine Residential Homes. This child protective services agency cares for kids who have been removed from their homes.
Sunshine contributed $100,000 to Hobbs to cover her inauguration ceremony, the second-highest donation from an organization to fund the event. Hobbs raised over $1.5 million from special interest groups to cover the inauguration, which cost just over $200,000.
Additionally, Sunshine donated $300,000 to the Democratic party during Hobb’s election campaign In 2022.
The relationship between Hobbs and Sunshine is under scrutiny after the organization received a 60% increase in rates paid by the Arizona Department of Child Services. The increase will see millions of taxpayer dollars filling Sunshine’s coffers. Sunshine was the only group home services provider to receive a rate increase under Hobbs.
Sen. T.J. Shope, who heads the Senate Committee on Health and Human Services, said he was “deeply disturbed” by these connections, which he claims might include serious offenses like conflicts of interest, illegally receiving benefits, illegal expenditures of state money, and bribery.
Shope has sent a letter to Arizona Attorney General Kris Mayes, asking for an investigation into Hobb’s connections with Sunshine and her potential “pay to play” scheme.
It’s a concern shared by Representative Matt Gress (R-Phoenix, Arizona), who sent his own letter to Mayes recommending she involve the Auditor General’s Office in the investigation. This office specializes in financial reviews, and according to Mayes’ response, the Attorney General’s office is authorized to oversee the prosecution of offenders the Auditor General investigates.
Sunshine has a history of involvement in controversies and only an average performance, making it an odd choice for increased funding. In 2022, Sunshine was implicated in a case of a diabetic child who was allowed to refuse insulin and subsequently died. According to Gress, Sunshine receives the highest pay of any other group home in Arizona. Before Hobb’s election, Sunshine had been denied rate increases for its services.
Before the inauguration, Sunshine had donated around $200,000 to the Democratic Party during Hobbs’ campaign, with the organization’s CEO and his wife personally donating $5,000 to Hobbs. Meanwhile, Sunshine’s Director of Programs donated $5,000 to Hobbs during her run for Arizona governor.
It should be noted that Sunshine had not contributed to any political campaigns before supporting Hobbs.
At $234 per child per day, Sunshine Residential charges more than the average $169 per child at other group homes. The company also enjoyed an increase from 291 beds to 300 in 2024.
The DCS redacted records at Sunshine’s request, alleging it needed to “protect” the organization’s “trade secrets” and financial information. It is the only group home services provider to be protected by DCS in Arizona.
Mayes is launching an investigation into the matter but cautions that parallel investigations from her office and the Auditor General’s office could “jeopardize the integrity of the criminal investigation” she has opened into Hobbs and Sunshine.
But Christian Slater, press aide for Hobbs, claims the complaint and the probe are “no big deal.” He said it’s unsurprising that a child welfare organization would contribute to Hobbs and scoffs, “Just like past investigations instigated by radical and partisan legislators, the administration will be cleared of wrongdoing.”
It’s not the first time Hobbs has been called out for her inauguration. In 2023, Mayes was asked to investigate if Hobbs used State resources to raise funds for inaugural purposes, with most of the funds raised going toward political purposes instead.
Rep. David Livingston (R-Peoria, Arizona) alleged last year that Hobbs used a state website to raise money for two inaugural events, one at the Capitol and another at the Talking Stick Resort. She raised enough money that funds were left over after paying for both events. The money then went to a generic “political purposes” fund, while the proceeds from the Talking Stick Resort inaugural ball were donated to the Arizona Democratic Party.
Following the investigation, Maye’s office cleared Hobbs of wrongdoing, claiming that the website did not use public resources for the “purpose of influencing an election.”
According to Stacey Barchenger of the Arizona Republic, Hobbs also sought donations of $250,000 from regulated utility providers, home builders, insurance companies, labor unions, and lobbying firms. The increased funding for Sunshine came even as the DCS dropped sixteen other group home operators over budgetary concerns and a desire to see kids taken out of group homes.