House speaker says probe clearing Sunshine Residential, Katie Hobbs omitted bribery claim

Arizona House Speaker Steve Montenegro says Attorney General Kris Mayes omitted a key bribery allegation from her investigation that cleared group home contractor Sunshine Residential Homes and Gov. Katie Hobbs of wrongdoing.

In a letter sent Thursday to Mayes, Montenegro said her memo left out an allegation that Sunshine CEO Simon Kottoor offered to put in a good word with Hobbs to help then-DCS Director Mike Faust keep his job. Allegedly, Kootoor would vouch for Faust as long as he got a pay raise.

“Her office knew about the allegation, investigated it and chose not to include it in the memo she released to the public,” Montenegro said in a statement. “The remaining question is whether those omissions were deliberate and whether her investigation was designed to give Governor Hobbs political cover before an election.”

Montenegro said the omission undercuts the memo’s claim that investigators did not find “any evidence” of potential bribery.

“We now know that statement was not true,” he wrote.

What sparked the alleged Katie Hobbs pay-to-play investigation?

The case stemmed from a 2024 Arizona Republic report alleging that Hobbs’ administration gave preferential treatment to Sunshine Residential Homes, which contracts with the Arizona Department of Child Safety.

The company donated about $400,000 to Hobbs’ inauguration committee and the Arizona Democratic Party, and DCS later approved a special 30% rate increase for the group home operator in 2023.

The Arizona Attorney General’s Office announced Aug. 21 that it found insufficient evidence to prosecute the governor, Sunshine Residential or anyone else involved.

Mayes’ office defends her Sunshine Residential investigation

Mayes said that while Faust told her investigators about the conversation, Kottoor denied making the statement and contended Faust was the one making promises.

The allegation is a “he said, he said” dispute, Mayes concluded.

Mayes’ spokesperson, Richie Taylor, said the investigation focused on allegations that Kottoor made political donations to Hobbs in exchange for a rate increase from her administration, but no evidence was found to support those allegations.

“Speaker Montenegro is cherry-picking evidence and leaking one-sided accounts of alleged events to push a partisan political narrative,” Taylor said in an email to KTAR News 92.3 FM. “Doing so ignores the totality of the facts in this case and selectively omits other information that contradicts his assertions.”

Taylor noted the Legislature has not interviewed Kottoor, the only other witness to the conversation in question.

“How much taxpayer money is the Legislature wasting paying a firm with partisan affiliations when Arizonans have already paid for the Attorney General and the Legislature’s own auditor general to investigate these same matters?” Taylor asked.

Mayes and Hobbs, both Democrats, face GOP opponents in November who have sought to use the investigation against them.

KTAR News reporter Serena O’Sullivan contributed to this report.

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