In 2022, Simon Kottoor, CEO of Sunshine Residential Homes — a private foster-care provider — donated $200,000 to the Arizona Democratic Party and another $100,000 to Governor Katie Hobbs' inauguration fund. By 2023, his company's reimbursement rate from the state jumped from $149.99 to $195 per bed, per day.
By 2024, after another $100,000 donation to the Arizona Democratic Party, the rate climbed again to $234. A 56% total increase from 2019 to 2024.
Then came the investigation. Former Arizona Department of Child Safety Director Mike Faust reported that Kottoor had allegedly offered to recommend Faust's retention in his position in exchange for approval of the rate increases. That's the kind of arrangement that has a specific legal name, and it isn't "civic engagement."
Attorney General Kris Mayes opened a probe. In August 2026, she closed it — announcing that Hobbs would not face criminal charges. Communications Director Richie Taylor said "no serious prosecutor would bring charges in this case." Hobbs offered her own contribution: "I was not involved in the decision." The decision to donate hundreds of thousands of dollars and receive hundreds of thousands in rate increases, presumably.
Arizona Republicans aren't buying the burial. GOP Chair Sergio Arellano called for the attorney general's investigation to get to "the bottom of it." U.S. Rep. Andy Biggs, R-Gilbert, called it a "huge problem" — not the allegations themselves, but how Mayes handled them. House Speaker Steve Montenegro, R-Surprise, has joined the chorus demanding transparency.
Chad LeBeau, campaign director for Senate President Warren Petersen's attorney general race, put it plainly: Mayes "had one job: Investigate potential bribery in an alleged pay-to-play scheme." She had one job, and she clocked out early.
The timeline is worth laying out flat. Kottoor donates six figures to the party. Hobbs takes office. Hobbs appoints David Lujan as DHS Director in March 2023. Kottoor's rates go up. Kottoor donates again. Rates go up again. A whistleblower reports an explicit quid pro quo offer. The Democrat AG investigates the Democrat governor — and finds nothing worth prosecuting.
Mayes' office didn't release the legal analysis. Didn't publish the evidence reviewed. Didn't explain which elements of the allegation failed to meet the threshold. They issued a statement and moved on, seven weeks before the November 3 gubernatorial race. The timing is, at minimum, convenient.
The defense amounts to: the legal analysis found no evidence of a "pay-for-play scheme." But declining to prosecute and clearing someone are two different things. One is a legal judgment. The other requires showing your work. Arizona got the first without the second.
Former DCS Deputy Director Shalom Jacobs is among those connected to the controversy, and the web of appointees and donors keeps expanding the more Republicans pull at the thread. A foster-care CEO writes checks to the party, the party's governor appoints new agency leadership, the new leadership approves rate hikes, and the party's attorney general decides there's nothing to see.
A 56% rate increase. Three hundred thousand dollars in donations. One investigation, quietly closed. That's not a coincidence. That's a receipt.
