Katie Hobbs’ Corruption Is Reaching New Heights

Katie Hobbs’ Corruption Is Reaching New Heights

June has been off to a brutal start for Arizona Governor Katie Hobbs. She kicked off the month by breaking her own hiring freeze to bring in a new press secretary. Then, a few days later, a Maricopa County Superior Court judge ruled that Hobbs violated the law when she sidestepped the Senate’s confirmation process for agency directors. And to top it all off, an eye-opening report was released uncovering an alleged pay-to-play scheme between Hobbs and an Arizona group home.

This shouldn’t come as much of a surprise. After all, this is the same Katie Hobbs who broke the law to take credit for the Republican tax rebate. And it’s the same Katie Hobbs who required the nonprofit behind her $30 million medical debt relief program to give her credit. But this latest scandal shows that Hobbs’ corruption has reached a new level.

According to the report, Sunshine Residential Homes has donated approximately $400,000 toward the Arizona Democratic Party, Hobbs’ gubernatorial campaign, and her inaugural fund. And what did the group home receive in return? A nearly 60 percent rate increase! And this was at a time when the Arizona Department of Child Safety (DCS) cut loose 16 providers, and no other standard group home provider received a rate increase.

That’s convenient.

Sunshine Residential Homes could potentially receive millions of dollars more at the taxpayers’ expense from their investment (sorry…donation). And that must have their CEO—who also happened to serve on Hobbs’ inaugural committee—excited.

Hmmm…Hobbs’ inauguration fund. Do you remember that?

This entire saga began when Hobbs set up a shady inaugural slush fund to provide donors with a conduit to buy political favor from her administration. While setting up and managing the fund, Hobbs illegally used public resources—like the state’s website—to solicit money for her inauguration. And she also tried to stop the disclosure of the names of those who donated to her inaugural fund.

But after immense political pressure and public records requests filed by groups like the Arizona Freedom Foundation (who operates AZ Free News), Hobbs finally released the names of the donors. And lo and behold, guess which group was among those listed? Sunshine Residential Homes Inc., which at the time made a donation of $100,000. But this is just one part of the story.

After raising huge sums of money for her inauguration, Hobbs and her administration only spent a small fraction of it for that purpose. At the time, it was reported that Hobbs brought in $1.5 million from approximately 120 donors for an inaugural event that cost less than $210,000.

So, what happened to the rest of the money? It’s clear that Hobbs and the Democrats plan to spend it on legislative races this November all while using the fund as nothing more than a quid pro quo factory on the Ninth Floor.

This must be stopped, and a criminal investigation into this matter is absolutely necessary. So far, Arizona Attorney General Kris Mayes and Maricopa County Attorney Rachel Mitchell have announced that they will investigate. But Mayes should be nowhere near this investigation. She has proven time and time again that she will do whatever it takes to protect Hobbs and the Democratic party from any real accountability—which is probably why she’s pushing so hard for Mitchell to stand down. And it’s also probably why Hobbs refuses to answer questions about whether she would comply with both a Mayes and Mitchell investigation.

Hobbs knows she’s in trouble, and she’s big mad that this scandal has been exposed. But her good buddy Mayes can’t be allowed to bail her out this time.

Rachel Mitchell should not only be the one to conduct the investigation, she should step in immediately to freeze the assets.

Hobbs’ inaugural slush fund is still in existence and sitting on a mountain of cash. She’s planning on spending contributions from this fund—which is under criminal investigation—on political campaigns in the coming months. This can’t be allowed.

From its inception to today, Hobbs’ inaugural fund has been a monument to corruption and abuse. And while the funds should probably just be refunded to the initial donors, that’s impossible now that it’s all under criminal probe.

It’s time for Rachel Mitchell to freeze these funds pending the outcome of the investigation. Giving taxpayer dollars to political donors is a severe misuse of public funds. And it should not be taken lightly. Mitchell should stop donors from cashing in on the Hobbs gravy train and give Arizona taxpayers the accountability they deserve from their government leaders.

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Reforming the Arizona Commerce Authority: Lawmakers Should Resolve Constitutionality Problems First

Reforming the Arizona Commerce Authority: Lawmakers Should Resolve Constitutionality Problems First

There are plenty of problems with the Arizona Commerce Authority. Since its inception in 2011, criticisms were raised concerning its freewheeling powers to dole out taxpayer money with practically no legislative oversight and broad exemptions from important guardrails such as the prohibition of using outside counsel (rather than the Attorney General’s office.) These issues have resurfaced over the years in critical Auditor General reports that have highlighted the insufficient reporting and record keeping for the administration of grants and awards provided by the agency to private businesses. This led to a mere 2-year extension of the agency in 2016, and a controversial reauthorization in 2018 when Republicans and Democrats alike banged the table for reforms. And most recently, the agency has come under fire by the Attorney General herself, for unconstitutional gifts in the way of wining and dining and Super Bowl tickets for CEOs.

Despite consistent criticism across the aisle and over the years, the ACA has evaded any real substantial reforms. That could very well change this year.

There now seems to be bipartisan interest in reining in an unaccountable agency with a $226M budget and a multi-million-dollar slush fund. Additionally, Republicans are unhappy that the ACA has been utilized by Governor Hobbs to pursue radical goals on abortion, water, and social equity…(digital equity plan). Democrats, on the other hand, must straddle support for a Hobbs-regime that is at cross purposes with purported opposition to corporatism and degradation of tax revenues that could be used elsewhere.

So, the question isn’t whether the ACA will be reformed this session, but which reforms will ultimately be adopted.

Among the reforms being considered, by far the most important and inarguable is a statutory “test” on the Gift Clause. Arizona’s constitution includes a protection for taxpayers from the “depletion of the public treasury or inflation of public debt by engag[ing] in non-public enterprises or by giving advantages to special interests.” This critical protection called the Gift Clause has been litigated over the years, yet arguably, the most important ruling occurred in 2021, well after the ACA was formed. The Schires Decision put forth a two-part test to clarify when an expenditure tripped the line into a Gift Clause violation. First, an expenditure must serve a public purpose, admittedly a low and subjective bar, according to the court. And secondly, the “the value to be received by the public is far exceeded by the consideration being paid by the public.” Schires clarified that, “relevant ‘consideration’ consists of direct benefits that are ‘bargained for as part of the contracting party’s promised performance’ and does not include ‘anticipated indirect benefits.’”

In other words, the customary “economic impact” metrics used by the Commerce Authority are not relevant factors to satisfy consideration, including tax revenues generated by the private business, as the court argued calculating such factors would “eviscerate the Gift Clause” altogether. Instead, the ACA must receive a “bargained-for benefit as part of the private party’s performance, and the payment of public funds must not be grossly disproportionate to the fair market value of that benefit.”

The Arizona Commerce Authority is in blatant violation of the Gift Clause and most urgently needs reform to ensure its compliance going forward. The bill that passed out of Senate Government on March 21 includes just that, codifying the Schires test in statute and obligating the ACA to analyze all grants and loans accordingly. A failure to adopt this obvious reform this session would be total neglect by the legislature, it would invite litigation of nearly all the Authority’s programs and leave the decimation of the Authority to the courts.  

Additionally, the bill reformed all current refundable tax credits (Qualified Facilities, Research and Development, and Film tax credits) administered by the Authority by making them non-refundable. This would ensure these programs comply with the Gift Clause as the refundable portion of the credit is, strictly speaking, a subsidy, for which statute currently does not require bargained-for benefits to receive.

Aside from these two most critical reforms to simply ensure the agency is constitutional, the legislature should prioritize making the agency more transparent in its reporting by defining its terms of performance, give small businesses and taxpayers a voice in its administration by diversifying the board of directors, and eliminate exemptions that make the agency less accountable, including allowing them to have their own in house counsel and permitting them to compete with the private industries. Moreover, the Authority could provide invaluable information to policymakers and businesses alike if they were required to focus their resources on monitoring the tax and regulatory environment, especially locally, as often those are the most important factors considered by businesses for location and relocation.

With no shortage of legal and functional problems at the Arizona Commerce Authority, lawmakers should seize on the opportunity to pass long-overdue reforms this year.

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Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!

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Arizona Voter Rolls Contain 500,000 Unqualified Voters. We’re Suing to Clean Them Up.

Arizona Voter Rolls Contain 500,000 Unqualified Voters. We’re Suing to Clean Them Up.

Last Friday, the AZ Free Enterprise Club filed a lawsuit in federal court against Arizona Secretary of State Adrian Fontes for failing to comply with the National Voter Registration Act’s (NVRA) mandate that he maintain accurate and updated voter registration records. Why? The data shows that there are 500,000 unaccounted for registered voters who are not qualified either due to death or moving out of the state, and in total, up to more than a million voters on the rolls who should not be registered.

Clean and accurate voter rolls are the bedrock of elections run with integrity. Ensuring only those eligible to vote may register and are on the rolls means that only eligible voters may vote in an election. It’s a basic principle: garbage in, garbage out. If we begin with bad data – ineligible individuals on the rolls – the system is susceptible to allowing ineligible ballots to be cast.

That’s why in 2022 we championed two landmark pieces of legislation to accomplish just that, and why, unsurprisingly, Marc Elias and the left’s lawfare machine immediately sued to stop these commonsense safeguards from going into effect. HB2492 ensures only eligible citizens who have provided proof of citizenship can register to vote and HB2243 requires regular and routine voter roll maintenance using several databases of information, with regular reports to the legislature of the results.

Both these laws are consistent with the NVRA’s mandate that states maintain accurate voter registration lists. But right now, Adrian Fontes is failing in his obligations under both, and that’s why we have filed a lawsuit in federal court to force him to do his job.

Four Counties Have More Registered Voters Than People

How do we know? According to the most recent census and voter registration data, more than 90% of the voting age population in Arizona is purportedly registered to vote. The national average is 69.1%. Why would Arizonans register to vote at an absurdly higher rate than the rest of the country? The only answer is that the state and counties are failing to adequately remove individuals who are no longer eligible, leading to bloated rolls.

It is even worse when looking county by county. For example, somehow 117% of the voting age population in Apache County is registered to vote. That’s right, the most recent census data reports that while there are only 48,096 people in Apache County that are of voting age population, 56,461 people are registered to vote – more people registered than live there! La Paz and Santa Cruz counties also exceed 100%, and in the state’s most populous county, Maricopa, 2,939,138 of the 3,128,330 (91.3%), voting aged residents are registered to vote. Again, that’s far higher than the national average rate of 69.1%.

No Recorded Responses of Registration Confirmation Notices

Even more alarming in Maricopa County is that of the 752,387 confirmation notices sent, 131,682 voters were removed from the rolls, but there is no reported response from a staggering 620,000 individuals. By contrast, in every other county, almost every single confirmation letter is accounted for. Meaning, if 100,000 letters were sent out, there is a recorded response for all 100,000 of them. Not so in Maricopa County, where more than 82% have no record.

Fontes’ List Maintenance Procedures Are Still “In Development”

All of this unfortunately comes as no surprise, considering just last year we sent a letter to Fontes demanding he clean the rolls. The numbers have not changed much since then, and the quarterly reports from the Secretary of State required by HB2243 make the growing problem even more evident.

In the most recent report, 43,305 individuals in just the first three months of 2024 moved to and obtained a driver’s license in another state. But no notice was sent to them, because according to Adrian Fontes the process is still “in development” two years after the law was passed. More than 4,000 people also self-reported they are no longer a resident of the county, but they will remain on the rolls because Fontes’ process for handling this is also “in development.”

On its face, a registration rate of over 90% is not plausible. But digging into the data reveals hundreds of thousands of individuals that should not be on the rolls, and according to Fontes himself, they will remain because his removal process is still “in development.” That flies in the face of the NVRA’s mandate for uniform statewide list maintenance, and that is why we have sued. We expect the courts to agree and compel Fontes to do his job.

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Arizona Free Enterprise Club President Files Lawsuit to Force Cleanup of State’s Voter Rolls

Arizona Free Enterprise Club President Files Lawsuit to Force Cleanup of State’s Voter Rolls

PHOENIX, ARIZONA – Late last week, Scot Mussi, the President of the Arizona Free Enterprise Club, filed a lawsuit in the U.S. District Court for the District of Arizona over the State’s failure to comply with Section 8 of the National Voter Registration Act (NVRA), which requires states to “conduct a general program that makes a reasonable effort to remove the names of ineligible voters from the officials lists of eligible voters by reason of … (A) the death of the registrant; or (B) a change in the residence of the registrant” to maintain accurate voter-registration records in a uniform manner across the state.

“Election integrity is a serious issue in our nation,” said Mussi. “Ensuring that Arizonans can have faith in the integrity of our election system and representative government starts with clean voter rolls that leave no doubts about who is able to cast a ballot. That’s why we sent a prelitigation notice to Secretary Fontes last August highlighting the artificially high voter registration rates. Unfortunately, most Arizona counties continue to have voter registration rates far exceeding the national average. We hope that the court compels Secretary Fontes to comply with his obligations under the NVRA to clean up Arizona’s voter rolls.”

Joining Mussi as Plaintiffs in this challenge are the Chair of the Republican Party of Arizona, Gina Swoboda, and Steven Gaynor.

In their lawsuit, the Plaintiffs argue that Arizona Secretary of State Adrian Fontes has failed to perform his mandatory list maintenance duty under the NVRA. For example, the most recent voter registration and census data show that up to four Arizona counties – Apache, La Paz, Navajo, and Santa Cruz – have more registered voters than eligible citizens. The remaining counties across the state have implausibly high voter registration rates that far exceed the average national and statewide voter-registration rates in recent years. Consistent with these artificially high registration rates, the complaint alleges that Arizona has at least 500,000 registered voters on the rolls who should have otherwise been removed because they are deceased or no longer reside in Arizona.

The Plaintiffs ask the federal court to find that Secretary Fontes is in violation of Section 8 of the NVRA, and to require the Secretary to fully comply with any existing procedures Arizona has in place to ensure ineligible voters are identified and removed from the rolls.

Read the complaint here.

It’s Time to Hold AG Kris Mayes Accountable for Abusing the Power of Her Office

It’s Time to Hold AG Kris Mayes Accountable for Abusing the Power of Her Office

Nobody likes a bully, and yet some people relish playing such a role. Here in Arizona, perhaps no person has taken on that persona quite like Kris Mayes. When she began her political career with the Arizona Corporation Commission, Mayes quickly gained a reputation for bullying other people around, but since becoming Arizona’s Attorney General (AG) in January 2023, she has taken it to a whole other level.

Within months of occupying the AG office, Mayes began using her post to target and investigate the very people and entities she is constitutionally obligated to defend. First in her crosshairs was the Arizona Department of Water Resources (ADWR), a state agency she is legally obligated to represent and provide legal advice to. But because she wants to score political points with her radical environmental allies, she decided to threaten legal action against ADWR unless they provide her with documentation showing that the agency is in compliance with its water management responsibilities.

Mayes then turned around a few weeks later and went after the Empowerment Scholarship Account (ESA) program at the Department of Education. In a public tirade, she falsely claimed that the budget agreement that protected universal school choice would bankrupt the state, despite the expenditure data showing that the ESA program actually saves the state money. When that didn’t stop the Republican budget bill from being signed by Governor Hobbs, Mayes doubled down on her ESA assault by threatening legal action against her own client, the Arizona Department of Education, over the program.

And now that she has had more time to get comfortable in office, Mayes is discovering new and creative ways to abuse her power, including collusion and the usage of dirty tactics to target political opponents.

Mayes Colluded with Cochise County Attorney to Pursue Indictments Over the Election Certification

Last year, the State Bar began investigating Cochise County Attorney Brian McIntyre for a possible violation of attorney-client privilege with his clients the Cochise County Board of Supervisors. And it proved to be quite revealing.

According to a letter recently submitted as evidence to the State Bar, McIntyre appears to have colluded with Secretary of State Adrian Fontes and AG Mayes against Cochise County Supervisors Peggy Judd and Tom Crosby. In the letter, McIntyre asked Mayes to retract an opinion set by her predecessor, Mark Brnovich, on expanded hand counts. But this request was made while McIntyre’s clients were actively appealing to be able to complete those hand counts. That’s a big no-no.

But did Kris Mayes stop him? No. Several months later, Mayes withdrew Brnovich’s opinion as requested by McIntyre. And then, in November of last year, she secured indictments against Judd and Crosby for delaying certification of the 2022 elections results—charging them with felonies for election interference and conspiracy. That’s an outrageous abuse of power, but Mayes’ overreach didn’t stop there.

Mayes Used Dirty Tactics to Secure Indictments Against Alternative Slate of Electors

Last month, an Arizona grand jury indicted a slate of alternate electors for the 2020 election and hit them with charges of conspiracy, fraud, and forgery. But according to a new report from Politico, these indictments were unprecedented and “unusually aggressive.”

And who do you think was leading the probe? Kris Mayes.

One witness described the questioning as “intense” and having “exceeded the limited scope that prosecutors had publicly acknowledged.” On top of that, some of those indicted were promised by prosecutors that they were not the subject of the investigation nor any charges.

But that proved to be a lie. Just ask one of President Trump’s lawyers, Jenna Ellis, for example. According to the report, Mayes’ prosecutors asked Ellis to appear for a “free-talk interview.” And a prosecutor in Mayes’ office even indicated in a letter that Ellis was not the target of the State’s investigation. But after a follow-up letter to arrange an interview reiterated as much, Ellis was indicted just four days later. And the same thing happened to another of Trump’s attorneys, Christina Bobb.

That’s low…and dirty. And you would think that our own corporate media, like the Arizona Republic, would be on top of such a revealing news story, but no. The Republic is so infatuated with Mayes that it would rather write glowing puff pieces about her while national news outlets and other alternative media blow the whistle on such government overreach.

The reality is that all of this should be more than enough to conduct a deep dive into the actions of AG Kris Mayes. And while the legislature may have started an investigation into her prosecutorial conduct, our court system and the Bar Association need to hold her accountable as well. All of this stinks, and if our legal system is really concerned about setting precedent and protecting norms, then these types of actions by a prosecutor need to be stopped.

Let’s start with Kris Mayes.

Help Protect Freedom in Arizona by Joining Our Grassroots Network

Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!

Join our FREE Grassroots Action List to stay up to date on the latest battles against big government and how YOU can help influence crucial bills at the Arizona State Legislature.