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Arizona GOP lawmaker calls for investigation into state contracts with prolific Hobbs donor

A top Republican in the Arizona Senate is calling on Attorney General Kris Mayes to investigate whether Gov. Katie Hobbs’ administration violated the law when it gave pay increases to a state contractor and Hobbs political donor. 

The Arizona Republic reported that the Department of Child Services gave a nearly 60% pay rate increase to Sunshine Residential Homes, a group home provider for foster children, as the department has reduced its reliance on group homes overall. The company’s current $234 daily rate is the highest of any group home contractor and well above the $169 average daily rate paid by DCS under its current contracts.

The Republic also found that pay bump came as the company donated hundreds of thousands of dollars to the state Democratic Party and a dark money group affiliated with Hobbs. Sunshine Residential’s CEO, Simon Kottoor, also made a personal contribution to the Hobbs’ gubernatorial campaign in 2022.

TJ Shope
T.J. Shope at the Arizona State Capitol in 2023.

Republican Sen. TJ Shope, who chairs the Arizona Senate’s Health and Human Services Committee, sent letters to Mayes and Maricopa County Attorney Rachel Mitchell, calling on them to investigate the situation, which he said “can only be described as a pay-to-play scheme between Governor Katie Hobbs’ Office, the Arizona Department of Child Safety, and political donors.”

Shope alleged the payments could violate multiple laws, including those prohibiting bribery and conflict of interest. 

He also wrote to DCS CEO David Lujan, asking him to provide unredacted copies of the solicitation and other documents related to the department’s contract renewal with Sunshine Residential Homes.

A spokesman for Hobbs told the Republic that the governor’s office was not involved in DCS’ decision to approve that contract. He cited a letter from Kottoor to DCS, saying the company was losing money and needed a higher rate to continue providing group home services to DCS.

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Wayne Schutsky is a broadcast field correspondent covering Arizona politics on KJZZ. He has over a decade of experience as a journalist reporting on local communities in Arizona and the state Capitol.