Arizona Governor Katie Hobbs is under investigation for “transfer-money” allegations after a group home business that cares for vulnerable children was reportedly approved for a rate increase after donating to the governor’s inauguration and the Arizona Democratic Party.
Arizona Attorney General Chris Mays, a Democrat, said his office opened an investigation into the matter at the request of Sen. T.J. Shopp, a Republican who is also the president pro tempore of the Arizona Senate.
The request came after The Arizona Republic reported that Sunshine Residential Homes, which operates group homes for foster children, was approved for a roughly 60 percent increase in taxpayer funds through the Arizona Department of Child Safety (DCS) after previously being denied an increase.
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Arizona Governor Katie Hobbs is under investigation for “smuggling” after a group home business was reportedly approved for a rate increase after making donations to the governor’s inauguration and the Arizona Democratic Party. (Mario Tama/Getty Images)
The endorsement came after private companies donated about $400,000 to Hobbs’ campaign, his inauguration and the state Democratic Party, according to reports.
The magazine reported that since July 2022, group home providers have asked authorities to increase the price of a standard bed at least 12 times.
One provider, Ohana Homes, received a rate increase to $155 a day in September 2022, before Hobbs took office, but Ohana’s contract was not renewed this year.
Sunshine Residential Homes asked for a 20% rate increase to $179 per day in December 2022, but DCS rejected the request on Feb. 6, 2023, according to department records cited by The Arizona Republic.
A $100,000 check from Sunshine was deposited in Hobbs’ inauguration campaign on February 9, 2023. A rate increase was secured in May 2023, meaning Sunshine Residential will earn $234 per day for standard group home services, much higher than the $169 average for other group homes. But a Hobbs spokesperson told the publication that the payment was made on December 15, 2022.
The hike means Sunshine is reaping the most profit out of the dozens of home providers operating in the state, The Arizona Republic reported, citing DCS and state contract records.
The newspaper also reported that no other group home providers have been approved for rate increases during Hobbs’ tenure. Sunshine requested the rate increase because of financial hardships caused by the coronavirus pandemic and inflation, The Arizona Republic reported.
The Sunshine Residential Homes site in Arizona. (Google Maps)
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Meanwhile, Schopf also sent a letter to Maricopa County Attorney Rachel Mitchell, who said it was time for investigators to look into what happened.
“We were talking millions of dollars, and it really concerned me to know that so few people have experienced such large rate increases,” Shope said. Fox 10 Phoenix.
The company’s CEO was a member of the Hobbs’ inauguration committee.
“I have to believe that at the very least, they are thinking about the allegations as I am, which is troubling at best, and probably more than that,” Schopf said.
Nick Klingerman, chief attorney for the criminal division of Mays’ office, said after being notified, it was their duty to investigate the matter.
“The Attorney General’s Office Criminal Division has the legal authority to investigate the allegations and crimes outlined in your letter, and as such, the Attorney General’s Office will be opening an investigation,” he wrote.
Arizona Governor Katie Hobbs delivers a short speech prior to President Biden’s speech at the Tempe Center for the Arts on September 28, 2023 in Tempe, Arizona. (Rebecca Noble/Getty Images)
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A spokesman for Governor Hobbs’ office denied the allegations in a statement and said his office had no involvement in DCS decisions about Sunshine’s pay.
“Just like past investigations instigated by extremist and partisan lawmakers, the administration’s wrongdoing will be uncovered,” the statement said. “Governor Hobbs is a social worker who has been an advocate for Arizona families and children, and it is outrageous to suggest that her administration would not do the right thing for children in foster care.”
The move to approve fee increases for Sunshine Residential Homes comes at a time when the state is considering reducing its use of group homes and moving vulnerable children into more family-like settings. DCS has refused to give pay raises to home operators, for example, and cut ties with 16 providers during the contract renewal process, The Arizona Republic reported.
