Arizona House Hires Independent Counsel to Investigate Alleged DCS “Pay-to-Play” Scandal

Lawmakers bring in outside attorney Justin Smith to probe claims of political favoritism tied to Governor Katie Hobbs’ administration and Sunshine Residential Homes. The Arizona House of Representatives has brought in an independent investigator to examine allegations of political favoritism involving Governor Katie Hobbs and the state’s Department of Child Safety (DCS). House Speaker Steve Montenegro announced that attorney Justin Smith of Missouri has been retained as outside counsel to lead the probe. Smith will have full authority to review documents, conduct interviews, and report his findings directly to the House advisory team overseeing the matter. The move follows an investigative series by The Arizona Republic, which revealed that Sunshine Residential Homesreceived a 30% rate increase worth millions after contributing more than $400,000 to political groups connected to Hobbs and the state Democratic Party. According to the reporting, other child-welfare providers were denied similar increases, and internal DCS communications acknowledged Sunshine’s political ties and suggested efforts to keep the rate hike confidential. Montenegro said the decision to appoint out-of-state counsel was intended to ensure impartiality and transparency. “The Arizona Republic’s reporting describes political donations followed by special treatment inside Governor Hobbs’ administration,” he said, emphasizing the need for a thorough and unbiased review. The investigation expands on earlier legislative actions from 2024, including referrals to the Arizona Auditor Generaland Maricopa County Attorney’s Office, as well as calls for Kris Mayes to recuse herself from related inquiries due to potential conflicts of interest. Smith’s appointment marks a significant escalation in the legislature’s scrutiny of the Hobbs administration. The advisory team will continue to coordinate with him as evidence is gathered and findings are developed. Montenegro pledged that the House would “follow the facts” wherever they lead. “Arizonans deserve transparency and accountability,” he said. “We will not turn a blind eye if taxpayer dollars or vulnerable children were used as political leverage.”