Arizona Senate Launches Hobbs ‘Pay-to-Play’ Investigation, Seeks Testimony From Governor and AG Mayes

Arizona Senate Government Committee Chairman Jake Hoffman announced September 16 that he would issue subpoenas for Gov. Katie Hobbs, Attorney General Kris Mayes, state officials, and Sunshine Residential Homes representatives as part of a legislative investigation into allegations that political contributions influenced state payments to the group-home provider.

“Today, as chairman of the Senate Committee on Government, I will be issuing subpoenas for document production and witness testimony connected to this matter,” Hoffman said during a news conference at the Capitol. He said a special committee hearing was planned for September 29.

🚨 SUBPOENAS ARE GOING OUT.

Attorney General Mayes closed her investigation into the alleged pay-to-play scandal involving Governor Hobbs and Sunshine Residential Homes, but the underlying evidence remains hidden.

Senate Government Committee Chairman @JakeHoffmanAZ is demanding… pic.twitter.com/Fc4TvSzZJS

— AZSenateRepublicans (@AZSenateGOP) September 17, 2026

The Senate inquiry follows Mayes’ August 21 decision to decline prosecution. Her office said its two-year investigation found no evidence of the quid pro quo necessary to support a bribery charge after reviewing more than 100,000 documents and over one terabyte of data.

“Individuals connected to Sunshine Residential contributed more than half a million dollars, benefiting Governor Katie Hobbs, her political operation, the Arizona Democratic Party, her inaugural fund, and her legal defense fund,” Hoffmann explained.

“Sunshine then received extraordinary rate increases from the Hobbs administration, ultimately becoming the highest paid group home provider in Arizona on a per child basis. A staggering 56% increase when department staff said no increase was necessary.”

“Political donations went in. Taxpayer-funded rate increases came out. All to benefit a key donor to Katie Hobbs,” he told reporters. 

The contributions spanned the period surrounding the rate decisions. As the California Globe previously reported, Sunshine’s legal-defense-fund payments began in November 2023, after the May 2023 increase, and continued through May 2024.

Hoffman said the legislative investigation would examine whether political access produced preferential treatment, whether taxpayer money rewarded financial supporters of the governor, and whether the attorney general conducted a complete investigation. He also identified possible changes to Arizona’s anti-corruption laws as an objective of the inquiry.

“Political contributions followed by a vague favorable government action do not by themselves prove a crime,” Hoffman said, before arguing that the circumstances warranted further investigation. Later, he added: “We are not declaring anyone guilty of a crime at this time.” His remarks are available in the press conference recording.

Hoffman said the subpoena targets include Hobbs and members of her administration; individuals connected to her campaign, inaugural fund, and legal-defense fund; Mayes and members of her office; Sunshine founder Simon Kottoor and other company representatives; and former DCS Director Michael Faust and former Deputy Director Shalom Jacobs. He said additional subpoenas could follow.

“We want testimony from all sides,” Hoffman said. “The people accused of wrongdoing, the people who investigated the allegations, the people who approved the government contracts, and the former officials who dispute the public explanation.”

Witnesses would testify under oath, Hoffman said, with questions addressing who requested and approved Sunshine’s rate increases, what Hobbs and her staff knew, and whether political contributions influenced those decisions. The committee would also examine the records underlying Mayes’ conclusions.

According to the attorney general’s investigative memorandum, Sunshine’s daily rate increased from $149.99 per bed to $195 in May 2023 under then-DCS Director David Lujan. It rose to $234 during the company’s April 2024 contract renewal, approximately 56% above the earlier rate.

As the California Globe previously reported, Sunshine contributed $100,000 to Hobbs’ inaugural fund and made three $50,000 payments to a campaign-affiliated legal-defense fund between November 2023 and May 2024. Hobbs subsequently declined to identify the fund’s other contributors, saying her campaign had reported everything required.

The attorney general’s memorandum attributed the rate increases to Sunshine’s importance to the state’s placement system and its threat to move beds to the higher-paying federal Office of Refugee Resettlement program. DCS officials told investigators that losing that capacity would create difficulties placing children, particularly siblings. The memorandum recorded denials that political contributions influenced the decisions.

Hobbs declined an in-person interview and provided written statements through her attorneys. She denied discussing Sunshine’s rates with company representatives or directing others to do so. Mayes also called for legislation improving transparency concerning political donations from state contractors.

Hoffman challenged the explanation for Sunshine’s increases, citing Jacobs’ assertions that the company did not need the additional payments and that its threatened shift to federal placements was unfounded. He identified the disagreement among former officials as one of the issues the committee intends to examine.

Hobbs’ campaign rejected the inquiry as politically motivated and reiterated that the governor, her office, and her campaign had committed no wrongdoing. Mayes’ office defended its investigation and criticized the timing ahead of the election. Arizona’s Family reported that Hoffman’s company has worked to support Republican gubernatorial nominee Andy Biggs, Hobbs’ opponent.

Mayes’ office said investigative files require legal review because its investigators coordinated with the Auditor General and conducted joint interviews while parallel investigations remain ongoing. It provided no firm timeline for completing that review.

Addressing potential noncompliance, Hoffmann also offered a warning to those subpoenaed: 

“Now, some witnesses may decide for political reasons that they don’t wish to appear, but let me be very clear about what Arizona law says: A legislative subpoena is not an invitation. It’s not a letter that says we’d like to get together. Under Arizona law, knowingly refusing to appear without a lawful excuse, refusing to be sworn, refusing to answer a proper and material question, or refusing to produce relevant documents after reasonable notice is a class 2 misdemeanor. It is a violation of Arizona law.”

Hoffman said he would seek assistance from Senate leadership and the full Senate to pursue lawful enforcement options if witnesses refused to comply. At the close of his prepared remarks, he said the first batch of subpoenas was ready to be sent that day.