Republican lawmakers reject Hobbs' pick to lead the Arizona Department of Housing

Arizona Republicans rejected Democratic Gov. Katie Hobbs’ pick to lead the Arizona Department of Housing on Tuesday.

The governor will need to select a new agency director.

Senators are tasked with approving or rejecting the governor’s picks to lead state agencies. In 2023, GOP lawmakers criticized nominees and recommended rejecting housing department Director Joan Serviss.

Hobbs tried to circumvent the Senate confirmation process by renaming her agency directors as “deputy directors” with the same authority, but lost a court battle on the issue.

Serviss is the first agency director to get thrown out this legislative session.

Last week, Republicans warned Serviss to either resign or get formally rejected.

In making their votes, Democrats emphasized that Serviss has broad bipartisan support, reading recommendations and listing dozens of housing experts and groups who support Serviss.

“I know her. I know of her integrity. I know of her skill, and I would ask members to consider how they’re voting and give a qualified woman with integrity the opportunity to continue the good work that she has done,” said Sen. Lela Alston (D-Phoenix).

Sen. Analise Ortiz (D-Phoenix) said the rejection is political.

“I cannot believe that we are sitting here debating the qualifications of a lifelong public servant in an attempt for the majority party to try to weaponize this moment against the governor,” Ortiz said.

Sen. Jake Hoffman (R-Queen Creek) leads the Senate Director Nominations Committee, which interviews Hobbs’ agency picks. He blamed Serviss for a $2 million dollar wire transfer the department made to bad actors impersonating a nonprofit in June 2023.

The money was recovered through insurance after the group that was supposed to get the money notified the state later in the year.

“Two million hard-earned tax dollars were wired to essentially a Nigerian prince. Now, it was not an actual Nigerian prince, but it might as well have been. It was fraudsters,” Hoffman said. “The executive in charge of the department didn’t have the necessary skills to put in place the proper protocols and procedures to protect the hard-earned dollars that they were asked to steward.”

Democrats said their Republican colleagues were throwing the blame at Serviss for an issue that existed years before she joined the department.

Citing an audit that reviewed fiscal years 2021-2023. Democrats pointed out that former Department of Housing Director Tom Simplot led the department until January of 2023, when Serviss first took over.

“To say that you’re going to put all this on Director Serviss’s shoulders is wrong. … It’s misinformation,” Sen Teresa Hatathlie (D-Coalmine Mesa) told her colleagues.

“Wiring money to nonprofit organizations has long been a practice of ADOH. When an audit found that a bad actor had impersonated an organization that was the intended recipient of funding, Director Serviss made the necessary changes to prevent it from happening again,” Hobbs’ spokesperson Christian Slater said in a statement.

Republicans also cited instances of plagiarism in a former role as a reason to reject Serviss.

She told lawmakers it’s common practice for advocacy organizations to use “shared language,” as she did when she led the Arizona Housing Coalition, but Hoffman said that doesn’t excuse using others’ words without attribution and signing her name to it.

“This nominee has had issue after issue after issue … Somehow we’re supposed to just ignore it and move on?” he said.

Before rejecting Serviss, the Senate confirmed Hobbs’ pick to lead the Department of Economic Security, Michael Wisehart.

The Senate voted 16-12 to reject Serviss on party lines.

Hobbs is now required by state law to “promptly” replace Serviss, but that’s a vague term.

“She can’t serve as director. But I’m sure the Hobbs administration will create a work around for that. 😂 Maybe deputy director? TBD,” Senate Republican Communications Director Kim Quintero said in a text.

in a statement before the Senate vote. Hobbs said: “When I became Governor, I nominated Director Serviss to steer Arizona's housing efforts amid unprecedented cost increases and to keep Arizona affordable for years to come. Today, just as two years ago, she remains the best person for the job.”

The statement listed some of Serviss’s accomplishments as the head of the Department of Housing.

“Under her leadership, the state funded and broke ground on more affordable housing units than any other two-year time period in our history, dramatically expanded capacity for transitional housing and shelters, and created economic opportunity by making first-time homeownership a reality for more Arizonans,” Hobbs wrote.