Arizona GOP senator to subpoena Democratic governor, attorney general in probe

At a press conference Wednesday, the Queen Creek Republican said the public deserves answers about how Sunshine Residential ended up getting so much extra money from the Department of Child Safety to provide housing for foster children after two prior agency directors concluded the increase was not necessary.

But Hoffman is hardly a neutral party: His private consulting business has received more than $1.2 million to help Republican U.S. Rep. Andy Biggs unseat Hobbs in the November election for governor.

And Mayes' spokesman, Richie Taylor, said of Hoffman's subpoenas announcement: "This is nothing more than performative political nonsense at the taxpayers' expense just weeks before an election."

But Hoffman said his Senate Government Committee, in what appears to be an unprecedented action, wants to hear directly from the Democratic governor and others in her orbit about the Sunshine Residential rate decision.

He also wants the Democratic attorney general and her staffers to testify about their own investigation, which concluded there was no evidence Hobbs directed her DCS director to approve the increase or that she even knew about it.

Also being subpoenaed is Simon Kottoor, owner of Sunshine Residential.

Hoffman said this Sept. 29 hearing isn't just to answer questions. He also wants them to produce all documents, including phone records, related to the decision to boost payments to Sunshine.

He wants to see everything that investigators in Mayes' office accumulated over their two-year probe — not just the 7-page synopsis issued last month finding there was no evidence of any illegal act.

The same records have also been requested by news reporters.

Mayes said Tuesday those records are being reviewed to determine what can and cannot be released. She also said she does not want to make public anything that might impair a parallel investigation already being conducted by the Auditor General's Office — an arm of the Legislature — with help from Republican Maricopa County Attorney Rachel Mitchell.

Hoffman said that's not up to Mayes to decide.

"If the attorney general claims that a specific record is legally protected, her office must, under the law, identify that record and explain the legal basis for withholding it,'' he said. "If there's nothing to hide, there's no reason for Kris Mayes to hide the Hobbs file.''

Hoffman said anyone who refuses to show up for the hearing or doesn't bring the subpoenaed documents could be charged with ignoring a legislative subpoena, which is a Class 2 misdemeanor and carries a penalty of up to four months in jail.

"A legislative subpoena is not an invitation,'' he said. "It's not a letter saying, 'We'd like to get together.' ''

Hoffman also pointed out that Arizona law says those who refuse to obey a legislative subpoena or who show up but won't answer questions can be cited for contempt. That entitles the legislative body, by resolution, to order the sergeant at arms to go out, make an arrest, and bring that person to the chamber.

That, however, requires a vote of the full Senate, which doesn’t return to the Capitol until the next legislative session starts in January.

Hoffman backs Hobbs' election opponent

Hoffman said he intends to conduct a fair inquiry. "We are not prejudging their testimony,'' he said of those he wants to appear. "We will give them a fair chance to come in and have an honest dialogue with the people's elected representatives about what actually occurred.''

But at the press conference, Hoffman made it clear he thinks there is far more to be told about the increase in contract payments to Sunshine. He took a slap at the report Mayes' office produced, saying the attorney general "feigned an investigation'' into her fellow Democrat.

The press conference came as Hoffman stood behind a podium where Senate staffers had taped up a sign proclaiming ''Katie Hobbs' corruption hurts Arizona.'' Hoffman said that doesn't mean he has already reached a conclusion.

Yet what Hoffman is planning — just days before early ballots go out for the election — has some hallmarks of politics. For example, he said if people do not show up for the hearing, which will be streamed live online and is likely to get extensive media coverage, his intent is to still ask the questions.

"If that means asking them to an empty seat, we will gladly do that,'' Hoffman said.

He snapped at a question of whether that is "pure political theater,'' given that it would not produce any answers.

"I'm very shocked that you think that trying to get to the bottom of alleged pay-to-play corruption is political theater,'' Hoffman said. "It will be a shame if Katie Hobbs or Kris Mayes or her staff or the staff of Sunshine Residential thumb their nose at the law of Arizona by failing to appear for compelled testimony.”

Hoffman also bristled at a separate question of whether he can be fair, given that an advertising firm he owns has been paid to promote Biggs' gubernatorial campaign against Hobbs.

"The reality is that this is the media trying to spin narratives that don't exist,'' Hoffman responded. "That question is absolutely inappropriate.”

He did not deny that his firm, 1Ten Media, is getting money from Turning Point PAC for advertising to promote Biggs' candidacy. But he said that, as a part-time legislator, he is entitled to have outside employment.

'Desperate political stunts'   

The connection between Hoffman and Biggs did not go unnoticed by Michael Beyer, spokesman for Hobbs' reelection campaign.

He cited public records showing money going from Turning Point to 1Ten Media on behalf of the GOP gubernatorial contender. And Beyer noted that polling has consistently shown Biggs running behind Hobbs.

"With just 21 days until (early) voting starts and Andy Biggs' cronies realizing they are running out of time to change the trajectory of his floundering campaign, it's no surprise a political consultant profiting from Biggs' campaign is resorting to desperate political stunts to rescue him,'' Beyer said in a written statement.

Christian Slater, Hobbs’ official press aide, declined to comment.

Hoffman said the Republican-controlled Legislature is simply providing the "checks and balances'' that the Arizona Constitution requires over the executive branch, including both the governor and the attorney general.

Increase in contract pay

The record shows that Sunshine gave $300,000 to the Arizona Democratic Party before the 2022 election, and another $100,000 the following year.

There was also $100,000 paid to the newly elected governor's inaugural fund in December 2022 — second only to $250,000 provided by Arizona Public Service — for an event that collected $1.7 million but actually cost only a fraction of that amount. The law in effect at that time allowed Hobbs to use the excess for political purposes.

And it was recently revealed that in 2023 and 2024, after the contract increases were approved, Sunshine gave another $150,000 to a largely secret "legal defense fund'' maintained by Hobbs, one where she has declined to detail who else has given, how much she has collected, and where the money went.

Sunshine had sought a large increase in what the state was paying for housing foster children. It was rejected in 2022 by Michael Faust, the DCS director under Republican former Gov. Doug Ducey.

That changed after Hobbs was elected and appointed former state Rep. David Lujan to head DCS. He approved boosting payments, in the middle of the contract, from $149 per bed to $195 and, finally, to $234.

Mayes, in her investigation, said that despite the governor's "close relationship'' with Kottoor, there was not enough evidence to support bringing charges linking Sunshine's donations with the rate increase.

Instead, she concluded Sunshine could get away with demanding more money because of its "outsized leverage.'' Mayes said DCS needed the beds and the company threatened to instead make them available to the federal Office of Refugee Settlement, which was offering more money.

But in a statement given to lawmakers, Shalom Jacobs, a former DCS deputy director, said the state was in no danger of losing the needed space that Sunshine provides for children in foster care.

She said Sunshine at the time was housing 14% to 16% fewer children than the prior year, which she said likely represented a reduction in state payments by $2.5 million to $3 million a year. That is what resulted in any claim by Sunshine of financial hardship, Jacobs said.

Hoffman, in announcing the probe, said the purpose is to hear from everyone he believes has any knowledge, including Jacobs as well as Faust, who turned down Sunshine's initial request.

Slater, the governor's press aide, did not respond to a question of whether Hobbs will appear at the Sept. 29 hearing.

Mayes was never able to get Hobbs to sit for an interview with her investigators during their probe of the Sunshine rate increase. Instead, the Attorney General's Office had to settle for a pair of letters written by Hobbs’ attorneys, one representing her in her capacity as governor and the other representing her campaign and inaugural fund.

Hoffman also wants answers to allegations by Faust that Kottoor told him after the 2022 election that he would recommend that Hobbs keep him on as director if Faust would approve a rate increase for Sunshine. That was after Hobbs had won, and months after Sunshine already had given money to the Democratic Party.

Faust said he declined the offer and reported it to other senior department officials, including Jacobs.

Mayes made no mention of that in her 7-page report.

Pressed Tuesday by reporters about why she didn't pursue it, the attorney general said there was no proof such an offer had been made. Faust never reported what he said happened to police or prosecutors at the time.