The Arizona attorney general announced on Friday that a two-year investigation found no evidence of a quid pro quo necessary to bring a bribery charge over allegations that a state contractor received favorable treatment after making political contributions benefiting Gov. Katie Hobbs (D-AZ).
Kris Mayes, a Democrat, said her office would decline prosecution following its investigation into Sunshine Residential Homes, a company that operates group homes for foster children and received substantial rate increases from the Arizona Department of Child Safety after making contributions to Hobbs’s inaugural fund and the Arizona Democratic Party.
“After two years of investigation, consisting of multiple interviews, reviews of campaign-finance records, procurement records, bank documents, and State emails and chats, totaling over one terabyte of data, including more than 100,000 documents, the investigation has not uncovered any evidence of the necessary quid pro quo to support a bribery charge,” Mayes said in a statement.
The investigation began in 2024 after an Arizona Republic report raised questions about the timing of Sunshine’s political contributions and an increase in the amount the state paid the company to house foster children.
Sunshine had donated to the Arizona Democratic Party before Hobbs’s 2022 gubernatorial election and then to Hobbs following her victory. The company’s founder also donated to Hobbs’s gubernatorial campaign.
In the same time period, Sunshine had unsuccessfully sought a rate increase and was denied again shortly after Hobbs took office. Arizona DCS later approved an increase in May 2023 that raised the company’s reimbursement from $149 to $195 per bed. Only Sunshine and one other provider received increases between 2022 and 2023.
Hobbs has denied wrongdoing and said she was not involved in the decision, which DCS made after Sunshine said it would reduce the number of beds provided if the state reimbursement rates were not raised.
“The report released today clearly states that there was no wrongdoing by the Governor or her office,” Hobbs’s office told the Washington Examiner. “Governor Hobbs always puts Arizona first and that’s why she is focused on lowering costs, securing the border, and delivering results for Arizona families.”
Mayes said the absence of evidence sufficient to bring criminal charges did not eliminate concerns about transparency surrounding political contributions from state contractors.
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“Declining prosecution is a conclusion about the legal standard for charging a case, but this case shows there is a need for legislative reform,” Mayes said. “The Legislature and the Governor have the power to ensure greater transparency with regard to political donations made by state contractors. I am urging them to work together and try again to pass legislation that does so.”
Mayes’s decision does not end scrutiny of the matter. A separate investigation by Maricopa County Attorney Rachel Mitchell and the state auditor general is ongoing.