A former high-ranking Arizona child welfare official is backing up a claim that the head of a group home company offered to recommend Gov. Katie Hobbs keep a former director in his job if the director approved a special pay hike for the provider.
Shalom Jacobs worked for the Department of Child Safety for 23 years and was one of two deputy directors when then-Director Mike Faust told her of the offer from Sunshine Residential Homes CEO Simon Kottoor.
Jacobs said in a statement that Faust called her in November 2022.
"He stated that Simon indicated that he would 'put in a good word with the Governor' for him to keep his position as DCS Director if Director Faust approved his special rate increase," Jacobs' statement said. "It was my observation
that Director Faust appeared clearly shaken by the conversation."
Faust called to tell Jacobs about that conversation immediately after Kottoor called Faust, according to Jacobs, who left the department in January 2023. Kottoor has denied making such an offer.
Jacobs' statement was provided to Arizona Senate Republicans and was the centerpiece of a Sept. 2 news conference convened by top-ranking Senate Republicans.
Senate President Warren Petersen and Sens. TJ Shope, David Farnsworth and Mark Finchem called on Arizona Attorney General Kris Mayes to release more documents from her investigation of Hobbs' ties to Sunshine Residential. Mayes concluded on Aug. 21 that Hobbs did not influence the May 2023 special pay increase DCS gave to Sunshine Residential, which had supported Hobbs' election and legal defense with over $550,000 in contributions.
Mayes' office has said, and confirmed again on Sept. 2, that the records would be released once a legal review has been completed.
Petersen is running against Mayes in November, and Hobbs is also on the ballot in what is expected to be a close race against Republican Andy Biggs. Petersen, Shope, Farnsworth and Finchem have all endorsed Biggs.
Even before the Republicans could gather, spokespeople for Sunshine Residential and Hobbs' campaign dismissed their news conference as a political stunt.
"We understand this is a campaign season, and we respect that reasonable people can debate state contracting policy, as they should," Sunshine Residential spokesperson Tommy McKone said in a statement. "What we will not do is let an unproven, recently fabricated false claim overshadow the evidence-based finding of a two-year investigation or distract from the work our staff do every day for Arizona's children."
Hobbs' spokesperson Michael Beyer said in a statement that, "With just 35 days until voting starts, it’s no surprise partisan extremists are launching desperate political stunts. As has been made abundantly clear multiple times by public reporting and the Attorney General’s report, there was no wrongdoing by Gov. Hobbs, the Governor’s Office, or the Hobbs campaign."
Shope noted that Mayes' investigation just concluded last month, so there was no way to raise their concerns about its scope earlier. But the Coolidge Republican also appeared to concede that Republicans have no evidence the governor intervened in the special treatment given to Sunshine Residential Homes.
"The information we have seen on that is very similar" to what Mayes found, Shope said.
A spokesperson for Mayes said Jacobs was not a witness to the conversation between Faust and Kottoor, and accused the Republicans of "trying this case in the media."
"The line for us in charging a case is whether we can expect a reasonable likelihood of conviction and we have proof beyond a reasonable doubt that would be admissible as evidence," Mayes' spokesperson Richie Taylor said. "And nothing they shared today changes the fact that evidence doesn't exist in that case."
But Petersen said he thought, if he was the attorney general, he could have found evidence to support a bribery charge.
"I certainly wouldn't be done with that kind of contradictory evidence," he told The Arizona Republic.
"You have evidence that is used in your investigation, even hearsay, but then you have evidence once you walk into court — you have to reach a higher standard," he said. "I feel like based off of what I know now, you could find that evidence. I think you could find the evidence to charge.
"I feel like we would be able to find it, but that's just speculation," Petersen added, acknowledging he had only a limited view of Mayes' investigation given that only a summary of her findings has been released publicly.
Jacobs' statement disputes several key details that DCS has relied on to justify the special rate increase in May 2023. She wrote that Sunshine Residential's threats to pull beds from DCS and make more money working for the federal government would have violated the terms of its contract with the state.
"I did not believe there was a sufficient basis for approving an extraordinary, out-of-cycle, unfunded rate increase for Sunshine Residential," Jacobs said.
"I am not offering an opinion about the ultimate legal conclusions of the Attorney General’s investigation," her statement reads. "I am providing the information I have based on my firsthand experience, the information available to me while I was serving in DCS leadership and what has been publicly available since my departure."
Reach reporter Stacey Barchenger at stacey.barchenger@arizonarepublic.com or 480-416-5669.
This article originally appeared on Arizona Republic: Ex-DCS deputy backs claim contractor leveraged Hobbs ties
