New Advisory Team to Examine Alleged Political Favoritism in Arizona Child Safety Contracts

Allegations Raise Questions About Political Favoritism

Arizona House Speaker Steve Montenegro has formed an advisory team to examine claims of political favoritism inside the state’s Department of Child Safety (DCS). The move follows reporting suggesting that Sunshine Residential Homes, a child-care provider, received a significant financial benefit after making substantial political donations.

According to documents and internal messages, the company received a 30-percent rate increase valued in the millions after donating more than $400,000 to Governor Katie Hobbs and the state Democratic Party. Other residential providers reportedly did not receive similar increases, and staff discussions referenced political connections and the need to keep the approved increase quiet from competitors. The developments come as DCS faces a budget shortfall and a mandate to reduce dependency on group homes.

House Forms Advisory Team to Lead Inquiry

In response to the findings, Speaker Montenegro announced a select advisory team of House leaders who will guide a legislative investigation. The panel will focus on gathering facts, coordinating with existing law-enforcement inquiries, and evaluating whether legislative action is needed to prevent political influence in state contracting.

The advisory team includes: Rep. Selina Bliss; Rep. David Livingston; Rep. Matt Gress; Rep. Quang Nguyen; and Speaker Pro Tem Neal Carter. Montenegro emphasized that the Legislature intends to secure records, pursue answers, and consider reforms “to ensure it never happens again.” He also directed state agencies and contractors to preserve relevant documents and cooperate with the House’s efforts.

Previous Calls for Investigation

The advisory team’s formation builds on earlier legislative actions. In June 2024, Representative Matt Gress urged the Maricopa County Attorney’s Office and the Arizona Auditor General’s Office to investigate potential illegal activity. His request followed initial reporting on the financial relationship between Sunshine Residential Homes and the governor’s office.

Representative David Livingston, Chair of the House Appropriations Committee, also pressed for Attorney General Kris Mayes to recuse herself from related matters, citing what he described as a conflict of interest and a pattern of shielding Governor Hobbs and the Democratic Party.

Response from Arizona Democrats

Arizona Democrats, including those aligned with Governor Hobbs, describe the allegations and ensuing investigation as politically motivated. The administration has characterized the inquiry as stemming from “radical and partisan legislators,” while asserting that the governor has “been a champion for Arizona families and kids.” Democratic officials have committed to cooperating with official investigations, though they have not publicly detailed a full defence of the specific contract-rate increase.

Legislative Leaders Say Accountability Is the Priority

Speaker Montenegro stated that the concerns raised by the documents and communications cannot be overlooked. “Arizona’s children, families, and taxpayers deserve a system that is clean, fair, and focused on care, not political access or donations,” he said.

He added that the House will work with the Auditor General, the Maricopa County Attorney, and the Attorney General, noting that the Legislature will respect ongoing investigations by law-enforcement authorities. The advisory team is expected to review records, interview stakeholders, and ultimately recommend whether statutory or policy changes are necessary to strengthen transparency and integrity in state contracting.

Next Steps for the Investigation

With law-enforcement and legislative inquiries now running in parallel, the House’s advisory group will play a central role in determining the state’s response. Their work may influence future contracting rules, oversight procedures, and agency requirements around disclosure and accountability.

For now, the Speaker has made clear that the investigation will proceed with the goal of restoring trust in Arizona’s child-welfare system. What the House discovers—and how officials address those findings—may shape the state’s contracting practices for years to come.