Arizona Governor Katie Hobbs acknowledged during a live television interview that she is under investigation in connection with allegations of a pay-for-play scheme involving state funding decisions. The admission came amid ongoing criminal and legislative inquiries into actions taken by her administration.
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The allegations first emerged in 2024, when Arizona Attorney General Kris Mayes opened an investigation into whether political donations influenced state funding decisions. The probe focuses on Sunshine Residential Homes Inc., a provider that works with the Arizona Department of Child Safety and received a significant increase in state reimbursement rates.
According to state records, the Department of Child Safety approved an increase of roughly 60 percent in the daily rate Sunshine Residential Homes charges to care for a child. The increase stood out because other providers reportedly did not receive similar pay raises during the same period.
Governor Katie Hobbs speaking with attendees at the 2024 Legislative Forecast Luncheon hosted by the Arizona Chamber of Commerce & Industry at Chase Field in Phoenix, Arizona
Photo: Gage Skidmore
Sunshine Residential Homes and its executives donated approximately $400,000 to Hobbs’ campaign and the Arizona Democratic Party between 2022 and 2023, despite having no prior history of political contributions. The company’s chief executive officer, Simon Kottoor, also served on Hobbs’ inaugural committee, and Hobbs publicly praised the company while campaigning for governor.
Attorney General Mayes opened the criminal investigation in June 2024 after Republican state Sen. T.J. Shope formally requested a review of what he described as a potential pay-for-play arrangement. In a letter to Shope, Mayes’ office confirmed it was authorized to investigate the allegations and would proceed accordingly. Separately, the Republican-controlled Arizona House launched its own inquiry in November, led by an advisory group appointed by House Speaker Steve Montenegro.
During an interview with KPNX, Hobbs confirmed that while investigators from the attorney general’s office have not personally interviewed her, members of her staff have been questioned, indicating the investigation remains active. Hobbs, who is seeking reelection in 2026, has dismissed the legislative inquiry as politically motivated and has said she expects to be cleared of any wrongdoing.[/read]