Arizona AG declines to charge Hobbs over pay-to-play allegations

Arizona Attorney General Kris Mayes announced Friday that state prosecutors will not file criminal charges against Governor Katie Hobbs over allegations of a pay-to-play scheme involving a group home company. The company, Sunshine Residential Homes, received a 30% rate increase from the state after contributing $100,000 to Hobbs' inaugural celebration.

Mayes, a Democrat like Hobbs, said the investigation found no evidence of the "necessary quid pro quo" to support a bribery charge. However, she noted the case highlights a need for legislative reform around transparency of political donations by state contractors, urging Hobbs and the GOP-controlled Legislature to adopt improvements.

Hobbs has denied wrongdoing, stating she was not involved in the decision to grant the increase. The Arizona Department of Child Safety said the increase was approved by then-DCS Director David Lujan, with no involvement from the governor or her staff.

The company, which operates 28 homes with about 290 beds, had threatened to reduce capacity if it didn't get a rate increase, potentially using beds for unaccompanied immigrant children instead. The agency said losing Sunshine's beds would significantly affect the state's ability to place children, likely splitting up siblings in foster care.

A separate investigation by Republican Maricopa County Attorney Rachel Mitchell and the state auditor general is ongoing. The company also faces scrutiny over the death of 9-year-old Jakob Blodgett, who stayed at a Sunshine home in December 2022 and died days later from complications of Type 1 diabetes. A lawsuit alleges negligence, and two employees testified they lacked training to manage a diabetic child. No charges have been filed in that case, which remains open.