Hobbs Blocks Transparency Reform for State Contracts Worth Billions While Facing Ongoing Investigation into Alleged Pay-to-Play Scheme
FOR IMMEDIATE RELEASE
Monday, June 22, 2026
PHOENIX, ARIZONA—Governor Katie Hobbs is keeping Arizona taxpayers in the dark about potential political ties behind billions of dollars in state contracts and grants by vetoing SB 1186, a transparency measure sponsored by Senate President Pro Tempore T.J. Shope. The legislation would require companies seeking taxpayer-funded contracts and grants to disclose political donations, gifts, and other items of value connected to the Governor and her political network, while preserving records needed to verify that contract awards are based on merit rather than political influence. The veto comes as Hobbs remains under active investigation by Attorney General Kris Mayes over allegations of a pay-to-play scheme involving significant donations from Sunshine Residential Homes and a subsequent large rate increase approved by her Department of Child Safety.
SB 1186 responds to growing concerns over Arizona's contracting process following the Sunshine Residential Homes rate increase controversy and legal challenges surrounding a multibillion-dollar AHCCCS contract award. In that case, an administrative law judge identified significant flaws in how proposals were evaluated and scored, raising serious questions about fairness, accountability, and oversight when taxpayer dollars are on the line.
The legislation requires companies holding or seeking state contracts and certain state grants to disclose anything of value provided during the previous five years to the Governor, campaign-related entities, inaugural funds, joint fundraising committees, and organizations supporting the Governor or opposing the Governor's political opponents. The bill also prohibits state agencies and employees from destroying notes used during the evaluation of contract proposals and allows contracts tied to improperly destroyed records to be re-solicited.
In her veto letter, Governor Hobbs dismisses the legislation as a "political stunt."
"Governor Hobbs had a choice to either stand with taxpayers or protect the status quo while she faces an active Attorney General investigation into alleged pay-to-play involving one of the very contractors at the center of these scandals," said Senator Shope. "Arizona families work hard for every dollar they send to government. They have every right to know whether companies seeking millions or even billions of taxpayer dollars have financial or political ties to the Governor's inner circle before contracts are awarded, not after another scandal makes headlines. They have every right to expect the records used to evaluate those contracts will be preserved, not destroyed. If state contracting decisions are truly being made fairly and on merit alone, transparency should not be controversial. Instead of giving taxpayers greater confidence in a system already facing serious scrutiny and investigation, Governor Hobbs is choosing secrecy over sunlight. At a time when trust in government is already declining, that's the exact opposite of what Arizonans deserve."
Arizona taxpayers fund every state contract and grant awarded by the executive branch. Whether Republican, Democrat, or Independent, voters deserve confidence that public dollars are being awarded fairly, transparently, and free from political favoritism. By vetoing SB 1186, Governor Hobbs is blocking reforms that would provide taxpayers, journalists, watchdog organizations, and lawmakers with greater visibility into potential conflicts of interest before public dollars change hands. At a time when confidence in government institutions is already strained, Arizona voters deserve more transparency and accountability, not less.
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For more information, contact:
Kim Quintero
Director of Communications | Arizona State Senate Republican Caucus