Highlights

Arizona Attorney General Kris Mayes announced Friday she will not file criminal charges against Gov. Katie Hobbs over allegations that the governor gave preferential treatment to a group home company that contributed $100,000 to her inaugural celebration and later received a state rate increase.

The investigation centered on Sunshine Residential Homes, which the Arizona Republic had revealed contributed to Hobbs' inaugural fund and the Arizona Democratic Party before receiving a 30% payment increase. Only Sunshine and one other company received increases during the 2022-2023 contracting period.

"The investigation has not uncovered any evidence of the necessary quid pro quo to support a bribery charge," Mayes said in a statement. While declining to charge, Mayes said her investigation "shows there is a need for legislative reform" around the transparency of political donations made by state contractors, and she urged Hobbs and the GOP-controlled Legislature to adopt improvements.

The company gave $200,000 to the state Democratic party in the months leading up to Hobbs' November 2022 election against Republican Kari Lake. Sunshine's founder, Simon Kottoor, and his wife, Elizabeth Kottoor, each contributed a total of $10,000 to Hobbs' gubernatorial campaigns, according to records cited in the AP report. Sunshine sought a rate increase in 2022, which was denied about a month after Hobbs took office. A second request was approved in May 2023, raising its rate from $149 to $195 per bed.

The Arizona Department of Child Safety said then-DCS Director David Lujan approved the increase and that the governor and her staff were not involved. The agency said Sunshine had threatened to reduce its bed capacity and redirect beds to house unaccompanied immigrant children for the federal government, which was reimbursing group homes at nearly twice the state rate. Sunshine operates 28 homes with approximately 290 total beds and provides 70% of beds for siblings in foster care in metropolitan Phoenix, making its potential exit a significant capacity concern for the state child welfare system.

The investigation has become a political liability for Hobbs as she seeks a second term. Her Republican opponent, U.S. Rep. Andy Biggs, has run advertising underscoring the probe. Hobbs has denied wrongdoing, saying she was not involved in the decision to grant the increase.

The Sunshine matter carries a separate, darker thread. Republican state Sen. T.J. Shope pointed to the company's scrutiny over its care of Jakob Blodgett, a 9-year-old who stayed at a Sunshine home in Glendale in December 2022 after his father was arrested on a drug charge. Blodgett died days later from complications of Type 1 diabetes. A lawsuit alleges negligence by child welfare authorities and Sunshine; two Sunshine employees testified they lacked the training to manage a Type 1 diabetic. The Maricopa County Sheriff's Office investigation into Blodgett's death remains open with no charges filed.

Mayes, a Democrat like Hobbs, emphasized the AG's office found no criminal threshold met. A parallel investigation by Republican Maricopa County Attorney Rachel Mitchell and the state auditor general is continuing; no completion date has been announced.

What happens next in the Hobbs investigation?

The Maricopa County Attorney's Office and the state auditor general are conducting a separate inquiry that remains active. It is unclear when that investigation will conclude or how its scope differs from the attorney general's examination, which is now closed.

The Maricopa County investigation has no announced timeline for completion.

Sources

Every factual claim in this article traces to one of the sources below. See how we work for the editorial process.

  1. AZ Family (3TV/CBS5) retrieved 21/08/2026 19:56

Authored by The Scottsdale Signal. Drafted by AI from primary-source material under our beat-specific editorial guides; reviewed by humans before publish under our five-gate process. Sources retrieved at 21/08/2026 19:56. Every claim traces to a source.