PHOENIX — The Arizona Attorney General's Office is investigating a group home that donated $400,000 to Gov. Katie Hobbs and other Democrats in an alleged "pay to play" scheme.
According to a story first published by The Arizona Republic, Sunshine Residential Homes seemingly received preferential treatment from the Department of Child Services after the donations.
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12News has been able to confirm $400,000 donated by Sunshine Residential Homes in political contributions surrounding the 2022 election.
Documents provided to 12News by State House Republicans show a $100,000 contribution to Katie Hobbs' inaugural fund, in addition to a total of $300,000 in three $100,000 donations to the Arizona Democratic Party during the 2022 election.
State documents reviewed by 12News show Sunshine runs 28 group homes for the Arizona Department of Child Safety. The state recently awarded contracts to increase the number of kids allowed in their care from 280 to 322.
The latest state contracts also show Sunshine's rate per child increased from $195 to $234.
Meanwhile, a DCS spokesperson told 12News last week that while 52 contracts were awarded for group home providers, 16 other providers were not awarded contracts.
"Anytime you're talking about millions of dollars in taxpayer funding going to an entity that has, you know, in essence, been found to been potentially trying to buy that type of access to those funds is very troubling," Republican State Senator T.J. Shope (R-Coolidge), said.
Shope sent a letter requesting the Arizona Attorney General's Office and the Maricopa County Attorney's Office to investigate the relationship between Sunshine, DCS and Hobbs' Office, calling it 'pay-to-play' and alleging specific crimes of bribery, fraud and contract law violations.
In a statement to 12News, a DCS spokesperson denied the allegations.
"The Department of Child Safety categorically denies any assertion of a pay-to-play scheme regarding the award of group home pay increases and contracts. The Department awarded group home pay increases and contracts based solely on departmental needs and used an evaluation process that complies with the law," DCS Spokesperson Cynthia Weiss said in part of a prepared statement.
"Neither CEO Lujan, nor the Governor’s Office were involved in the bid process or award of contracts," Weiss added.
Still, Shope's additional concern is because of Jakob Blodgett, a 9-year-old diabetic boy who died after being in the care of Sunshine Residential homes, then Sunshine was awarded more money.
"While other group homes who did not have this type of problem did not receive rate increases, even though they had requested them, was definitely alarming," Shope said.
12News asked the Governor's Office for comment on criticism the donations garnered a more lucrative contract for Sunshine Residential homes. In response, a spokesperson sent a prepared statement.
"Just like past investigations instigated by radical and partisan legislators the administration will be cleared of wrongdoing," a Governor's Office spokesperson said in an emailed statement. "Governor Hobbs is a social worker who has been a champion for Arizona families and kids. It is outrageous to suggest her administration would not do what’s right for children in foster care."
In January, Republican State Representative Matt Gress (R-Phoenix) questioned DCS head David Lujan about the increase. Lujan said Sunshine is one of the largest providers, including one of two that can keep sibling groups together and was being offered more money by other entities.
"He was basically threatening to remove his beds from our system... We also look at if there were any previous incidents and what type of job they did. This particular provider I think overall is doing a good job, so the recommendation was made to give this particular provider a rate increase," Lujan said.
Tommy McKone sent the following statement on behalf of Sunshine Residential:
Sunshine Residential has been involved in the State Procurement process and operating for over 30 years. As a competitor, like any other state approved vendor, Sunshine Residential has conducted themselves in an ethical and legal manner pursuing state contracts while abiding by state procurement laws. Out of respect for the ongoing investigation, Sunshine Residential will continue to work with the authorities investigating this case.
In a letter sent to Shope and Gress Maricopa County Attorney Rachel Mitchell said her office would be assisting as a prosecutorial agency for the Arizona Auditor General's investigation.
On Friday, Mayes, a Democrat, sent a letter to Maricopa County Attorney Rachel Mitchell, a Republican, stating the attorney general is statutorily authorized to investigate the allegations in Shope's referral and that it would not be appropriate for the two agencies to conduct parallel investigations into the same matter.
"Should my office need the assistance of either your office or the Auditor General, we will reach out and let you know," the attorney general wrote to Mitchell.
Robert Pastor, an attorney in the Valley who's handled cases against Sunshine dating back to 2007, also represents Blodgett's father. Pastor said Blodgett's father is bringing a lawsuit against the state for his son's death.
"I think it raises a lot of red flags here you have a group home with a history of below standard care, right? They have proven time and again that they are really not interested in looking at the best interests of Arizona's most vulnerable children," Pastor said. "And yet the state has rewarded them with a contract that is head and shoulders above all the rest."
Pastor notes the quality of care impacts the kids who are in Arizona's child welfare system.
"I think the Arizona Department of Child Safety needs to cease placing children in Sunshine group homes, because we don't know if those children are still in danger," Pastor said.
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