Hobbs won't disclose money she's taking for legal fees

And it’s perfectly legal because of a exception carved into state law nearly a decade ago.

Hobbs has set up a special fund to pay for the costs her campaign incurred in defending her against lawsuits filed by failed Republican gubernatorial candidate Kari Lake challenging the legitimacy of Hobbs’ 2022 election.

But Hobbs never publicly disclosed the existence of the special account. Instead, she is relying on the law that creates the exception allowing candidates to approach donors — and take as much as they want for legal fees from anyone — without having to file the same reports required of other campaign expenses.

Her fund would have remained secret except that one donor — Pinnacle West Capital Corp., the parent company of Arizona Public Service, the state’s largest electric utility — filed a new report disclosing that it gave the governor $100,000 last year for her legal expenses. The report, obtained by Capitol Media Services, shows that’s more money than Pinnacle West Capital gave anyone in political donations in 2024.

The only reason the company provided the information is that the Arizona Corporation Commission, which regulates APS, ordered regulated utilities to file such reports after they were accused a decade ago of secretly funneling money into efforts to elect commission members of their choosing.

A spokesman for the Hobbs campaign, Michael Beyer, refused Monday to disclose others who have given to her special fund, nor would he say the total amount the governor has collected for her legal fees. Instead, Beyer said the fund’s creation was justified.

“Kari Lake baselessly challenged the results of a free and fair election she lost,’’ he said. “We won eight times in court, and yet Lake fought the results all the way through November 2024 when she finally lost her last appeal to the Arizona Supreme Court.’’

This isn’t the first time Pinnacle West has donated corporate funds for Hobbs’ benefit.

The company in 2023 gave $250,000 to the governor’s inaugural fund, money that also was not publicly disclosed until reported by Capitol Media Services.

That was part of more than $1.9 million Hobbs took in for the January 2023 event — an event that cost only $207,000 to put on.

The balance went into campaign accounts for the governor’s 2026 reelection efforts; required campaign finance reports show she has about $4.1 million in the bank.

The new Pinnacle West report also shows the company gave another $50,000 this past year to the Democratic Governors Association which, in turn, is free to spend the money to help Hobbs remain in office.

And there was $25,000 given to the “Governors Fund’’ of the Arizona Democratic Party.

This isn’t the company’s first foray into providing money for Democrats’ legal fees. Pinnacle West disclosed in 2022 it had given $25,000 to help Kris Mayes fend off a legal challenge by Republican Abe Hamadeh to her election that year as attorney general.

One difference, however, is that Mayes was a bit more open about her solicitation, having created a public website seeking the donations. But she, like Hobbs, never provided a public list of her donors, with her campaign aide D.J. Quinlan saying, “Arizona law doesn’t require it.’’

A spokesman for Pinnacle West did not respond to specific questions about the company’s decisions to provide funds for the governor’s inaugural as well as to help her pay for the cost of fending off legal challenges to her office.

But the company has an interest in having good relations with Hobbs.

Right now, the governor has a bill on her desk being pushed largely by APS to allow it to “securitize’’ debts by selling low-interest bonds versus borrowing money at higher rates.

The utility and its legislative backers say that will save money in the long run. But the measure has raised concerns that it allows utilities to bond without limits — and, by extension, to automatically pass on the costs to ratepayers.

House Bill 2679, which Hobbs must act on by Tuesday, comes over the objections of many members of the governor’s own Democratic Party who say the measure lacks guardrails to protect consumers.

The company has had other issues that need gubernatorial blessing, as well, including legislation that would shield it from certain liabilities if its power lines caused wildfires.

The figures above of direct giving of corporate funds by Pinnacle West don’t include the money that the company, through its separate political action committee, has given directly to candidates for their campaigns, which does have to be disclosed in regular campaign finance reports.

That includes $10,600 given to Hobbs’ 2022 election campaign that year, another $5,000 in 2023, and $5,800 at the beginning of this year.

Nothing that Hobbs, Mayes or any other elected official is doing to solicit money for their legal fees — and keep the donors and the amounts secret — is illegal.

The exemption for legal fees was part of a 56-page revamping of campaign finance laws in 2016.

Its passage was largely pushed through by the Republican legislative majority.

Then-Democratic Sen. Martin Quezada of Glendale attempted to limit the scope of the legal fees exemption, saying lack of disclosure should be allowed only if the legal expenses were to help candidates comply with election laws. His proposal was defeated on a party-line vote.

The 2016 law wasn’t just about legal fees. Other expenditures the GOP-backed legislation exempted from reporting requirements ranged from the cost of communications by a company to its employees, to money spent by political parties to support their nominees through things like bumper stickers, pins and posters.

The legislation also reduced the penalties against campaign committees for violating election laws.

Hobbs, then the minority leader of the Senate, voted against the final legislation, which ultimately was signed by then-Gov. Doug Ducey, a Republican.

The discovery of the governor’s legal defense fund comes as she has been under scrutiny by state lawmakers over questions about whether outside groups could be influencing her with political donations.

Earlier this month Hobbs vetoed a proposal by Coolidge Republican Sen. T.J. Shope. It would have required any company responding to a request for proposals to sell services or goods to the state to list all donations made by the company and its officers in the past five years to the governor. That included not just donations to the governor but any related entity such as a campaign committee or an inaugural fund.

Hobbs, in her veto, made no mention of those provisions in rejecting the plan. She said her objection was to removing a broad exemption that the state Medicaid program has from complying with procurement laws.

But among the issues raised during debate on the measure was the fact that Sunshine Residential Homes, which serves children in foster care, got a 60% increase in state reimbursement shortly after the company gave $100,000 in 2023 to the governor’s inaugural fund.

That contract alteration with Sunshine remains under investigation by both Mayes and Maricopa County Attorney Rachel Mitchell. Hobbs’ press aide Christian Slater at the time dismissed the probe as partisan and said the administration will be cleared of wrongdoing.

While Pinnacle West reported various corporate donations to Hobbs and Democratic interests, the report shows the company has spread its cash around for other causes.

It gave $650,000 in 2022 — the year Hobbs was campaigning against Lake — to the Republican Governors Association. But there seemed to be some hedging of its bets as it also gave $60,000 that year to the Democratic Governors Association, a figure it added to this past year with the additional $50,000.

That’s also true of efforts to support legislative races.

Pinnacle West gave $25,000 last year to the Arizona Democratic Legislative Campaign Committee. It gave an identical amount to Republicans, split between committees run by House and Senate GOP leaders.

This year’s donations of its corporate funds also included $50,000 to the Republican Party of Arizona, $50,000 to We Build Arizona, which lobbies for more spending on roads and infrastructure, and $25,000 to Elevate Arizona, which helped get voter approval of a plan to let the Maricopa Community Colleges spend more money.