(The Center Square) - Arizona Republican Party Chair Sergio Arellano criticized Attorney General Kris Mayes’ decision not to press charges against Gov. Katie Hobbs in an alleged pay-for-play scheme.

On Friday, Mayes announced her office would not pursue criminal charges against the governor after an investigation into allegations that Sunshine Residential Homes made political donations that influenced the state's approval for Sunshine's rate increases. The approval came after Sunshine made donations benefiting Hobbs and the Arizona Democratic Party in 2022. Both Hobbs and Mayes are Democrats who are running for reelection this year.

Sunshine Residential Homes, which is a private foster-care provider for Arizona children, gave $200,000 to the Arizona Democratic Party and $100,000 in 2022 to Hobbs’ fund in for her inauguration, according to various media reports. 

In May 2023, Sunshine saw its bed-per-day rate increase from $149.99 to $195, according to the attorney general's office. The office's legal analysis said the rate increase was approved by David Lujan, director of the Arizona Department of Child Safety. Hobbs appointed him in March 2023.

Three months later, Sunshine Residential Homes donated another $100,000 to the Arizona Democratic Party. In April 2024, the company got the state's approval for a rate increase from $195 to $234.

This represents a 56% increase in its rates from 2019 to 2024.

In its legal analysis, Mayes’ office said it did not find any evidence “to substantiate a pay-for-play scheme involving Governor Hobbs and Sunshine.”

Mayes’ office noted two other providers “received 85% and 60% increases respectively, but their per-day rates were lower.”

The office said Sunshine Residential Homes received a rate increase because it was the Arizona Department of Child Safety’s biggest provider of congregate-care beds. The attorney general's staff also said the DCS feared losing the company to the federal Office of Refugee Resettlement, which pays more per bed.  

“After two years of investigation, consisting of 12 interviews, reviews of campaign-finance records, procurement records, bank documents, and State emails and chats, totaling over one terabyte of data and more than 100,000 documents, the investigation has not uncovered any evidence of the necessary quid pro quo to support a bribery charge,” Mayes’ office wrote.

The attorney general's office said Hobbs declined to be interviewed by the office for its investigation. Instead, Hobbs submitted two written responses to the attorney general's office through her lawyers. According to the attorney general's office, Hobbs said she never discussed Sunshine's rates or the Department of Child Safety contracts with anyone connected with Sunshine and never ordered such discussions on her behalf. Hobbs also denied that Sunshine's donations influenced any state agency decision.

Despite declining to prosecute the governor, Mayes said legislative reform is needed.

“The Legislature and the governor have the power to ensure greater transparency with regard to political donations made by state contractors. I am urging them to work together and try again to pass legislation that does so,” she explained.

The Center Square reached out to Hobbs’ office for an interview, but it did not respond before publication time.

According to Arellano, the attorney general dropping her investigation into the governor “isn’t just business as usual — it’s a masterclass in how corruption works in Arizona.”

“For months, Hobbs looked Arizonans in the eye and claimed she was ‘in touch’ with the [attorney general’s] office. That was a straight-up lie. She explicitly refused to sit for an interview,” the state Republican Party chair told The Center Square via email on Monday.

“No interview. No accountability. No consequences. Just same-party protection timed perfectly for election season,” Arellano said. “This is the Arizona Democratic Socialist playbook, plain as day: Delay, deny, delete the evidence, and declare ‘no quid pro quo’ when the political calendar gets tight.”

“When the people sworn to enforce the law protect their own instead of the public, the system isn’t broken. It’s working exactly as the insiders designed it,” he added.

Arellano said Arizonans deserve “better than this cartel of convenience."

Mayes is running for reelection in the Nov. 3 general election against Senate President Warren Petersen, R-Gilbert. Petersen, the Republican nominee, said Mayes’ decision on Hobbs was “predictable in an election season.”

“She shamefully shifted accountability and protected her political ally, turning a blind eye to Hobbs’ conduct,” Petersen said on social media.

“Once again, Mayes has proven herself unfit to lead the Arizona Attorney General’s Office, putting politics ahead of enforcing the law,” he added.