Mayes defends pay-to-play probe, backs political contributions ban for state contractors

Arizona Attorney General Kris Mayes said her office went above and beyond in its investigation into pay-to-play allegations against Gov. Katie Hobbs as she faces criticism from Republicans, who accuse Mayes of giving her fellow Democrat special treatment.

Last week, the Attorney General’s Office released a report clearing Hobbs of criminal wrongdoing following a two-year investigation into allegations that campaign contributions influenced a decision to award a pay rate increase to Sunshine Residential, a state contractor that houses foster children.

Mayes began investigating the situation after a 2024 report by The Arizona Republic revealed that Sunshine Residential, founder Simon Kottoor and others connected to the company made significant contributions to Democrats and Hobbs’ campaign in 2022 before the company received a 60% pay rate increase.

Investigators concluded that, though some Department of Child Safety officials were aware of the contributions, Kottoor’s politics did not factor into the decision to raise Sunshine Residential’s pay and Hobbs did not influence the decision.

Following the release of the report, Republicans accused Mayes of playing politics as both she and Hobbs seek reelection this year.

“Kris Mayes made a calculated decision to protect her political ally, Katie Hobbs, in the now-infamous pay-to-play scandal,” Senate President Warren Petersen, who is running for attorney general against Mayes, said in a statement.

Critics pointed out that Hobbs never actually sat down for an interview with the Attorney General’s Office over the course of the two-year probe, even after Mayes said, “You cannot blow off the Attorney General's Office — full stop.”

Instead, attorneys for the Governor’s Office and Hobbs’ re-election campaign submitted written responses to investigators.

“She allowed Hobbs to avoid questioning, ignored the growing trail of political contributions, and then cleared her fellow Democrat after a two-year investigation,” Sen. T.J. Shope, who requested the investigation, said in a statement.

Mayes defended her investigation.

“It was a thorough and professional investigation conducted by my criminal division,” Mayes said. “We interviewed, I think 12 people, collected hundreds of thousands of documents and emails, and collected two statements from the governor herself or her campaign.”

Ultimately, Mayes said Hobbs’ decision not to sit for an interview did not affect the investigation.

“So at the end of the day, we believed we had all the information that we needed to close out the case and to present the findings that we made,” Mayes said. “So I don't think that the fact that she chose not to sit for an interview was a make or break here.”

And Mayes said that investigation, which included interviews with DCS officials and campaign manager Nicole DeMont, went well beyond pay-to-play investigations by past attorney generals.

She pointed to former Attorney General Mark Brnovich’s investigation into allegations against former Gov. Doug Ducey, who sent a no-bid state contract to Google after the tech giant brought its Waymo driverless vehicles to Arizona at Ducey’s behest, according to The Arizona Republic.

“My predecessor, in his investigation into the Google situation, I think took … like two months, and the sign out memo on that one was done in writing, and was one page,” Mayes said.

Petersen argued Mayes should not have overseen the investigation in the first place since $300,000 of the money from Sunshine Residential went to the Arizona Democratic Party, which supports Democratic candidates like Mayes.

Mayes denied any of that money benefited her campaign.

“I did not benefit from that funding at all,” she said.

The Sunshine files

To shed more light on the investigation, Petersen has called on Mayes to release video interviews and transcripts from the investigation.

“If Mayes is confident in the integrity of her investigation, she should have no problem allowing Arizonans to judge for themselves. Release the files,” he said in a statement.

The Attorney General’s Office said it will release those files, though it is unclear exactly when that will happen.

“They will need to be reviewed and redacted before disclosure,” Richie Taylor, a spokesman for the Attorney General’s Office, said.

Taylor said the Attorney General has conducted joint interviews and shared information with the Arizona Auditor General’s Office, which is conducting a separate ongoing review alongside Maricopa County Attorney Rachel Mitchell.

In the memorandum clearing Hobbs, Nick Klingerman, Mayes’ criminal division chief, suggested the Attorney General’s Office keep its investigation open for the time being in order to assist the Auditor General.

“Our investigation remains open for those reasons. Before any underlying information in the investigation is released, it will need to be reviewed with that in mind,” Taylor said.

The Auditor General’s Office did not respond to a request for a status update on its investigation.

Reforms

Though she declined to bring any charges against Hobbs or her administration, Mayes did call on both the governor and Legislature to reform the state’s procurement and campaign finance laws to improve transparency.

Shope, the state lawmaker, criticized Mayes for waiting to make that call until after the legislative session, when Hobbs killed his bill that would have required companies that seek state contracts to disclose “anything of value” they have provided to the governor, a gubernatorial campaign or other entities that supported the governor’s election or inauguration in the past five years.

“That's not leadership. It's political damage control,” he said.

Hobbs vetoed Shope’s proposed reforms twice over the past two sessions.

She offered her own competing proposal that would have stopped potential contractors from making large donations during the bid process. But it died in the Republican-led Arizona Legislature.

“If Mayes is sincere, she can endorse the legislation, appear before lawmakers and demand that Hobbs sign it,” Shope said. “If she refuses, Arizonans will know her call for reform was nothing more than election-year cover for the governor.”

Mayes now says her office would be “happy to be involved in helping to broker that legislation and to help write it.”

But she indicated she thinks Shope’s proposal did not go nearly far enough and should apply to all state agencies, including the Legislature. The real question, Mayes said, is just how far it should go.

“I mean, you've got city managers and city councils. You've got elected sheriffs that do procurement. You've got a whole lot of different folks,” Mayes said. “So the question is, where do you cut that off?”

Any procurement reform and transparency legislation should at least apply to the Governor’s Office, Legislature and state agencies, she said.

“At a minimum, and that does seem like kind of a no-brainer,” Mayes said.

She also said she would support a limit or outright ban on state contractors giving to political campaigns.

“I would think that you can really solve a lot of the problem by banning state contractors from making campaign contributions,” she said.

Shope previously defended his legislation, which specifically targeted donations to the Governor’s Office, saying the Legislature does not handle procurement.

“There’s not one member here making decisions on finance or procurement issues like the governor’s office does with billions and billions of dollars of decisions like that, which is why we ran the bill,” he said in February.

However, lawmakers do vote on legislation that can affect state contracts and who receives them, such as a bill Shope introduced that would have changed the bidding process used by the state’s Medicaid agency. The Joint Legislative Budget Committee also oversees certain expenditures by state agencies, like the Medicaid program, which, in turn, affects public dollars paid out to contractors.

Legislative leaders themselves also award contracts to contractors that provide services to lawmakers, including security companies and outside law firms that represent the Legislature in litigation.