Gov. Katie Hobbs has released long-awaited proposals to reform the state’s campaign finance and procurement laws in response to ‘pay to play’ allegations lobbed against her administration by Republican critics.
But the governor is pairing those reforms with a ban on lobbyists wining and dining state officials, including the very lawmakers in the Republican-led Legislature that would have to vote to approve her proposal.
Hobbs’ plans include prohibiting potential state contractors from making contributions of more than $50 during the bid process.
That means companies and individuals seeking those contracts could not make large contributions to candidate committees, political action committees and statewide or legislative candidates from the time a bid opens to when it is officially awarded.
Violators would be subject to a fine of $500 or up to twice the value of the illegal contribution, whichever is larger, and a three-year ban on seeking state contracts.
The governor released the plans nine months after she vetoed a Republican bill that would have required companies seeking state contracts or grants to disclose “anything of value” they have provided to the governor, a gubernatorial campaign or other entities that supported the governor’s election or inauguration in the past five years.
Sen. T.J. Shope (R-Coolidge) introduced that legislation after reporting by the Arizona Republic revealed a foster care group home operator received a substantial rate increase from the state after its owner made sizable contributions to Hobbs’ campaign and Democratic electoral efforts.
Hobbs has repeatedly denied any wrongdoing and said she was not involved in awarding those rate bumps, though her own Department of Child Safety director told the Republic the situation put the agency in an awkward position.
GOP lawmakers are backing a different plan sponsored by Shope that is similar to his vetoed legislation from last year.
“She had mentioned that they were working on something three or four months ago, and this is the first time that we’ve seen it,” Shope said.
Hobbs said her reforms go beyond what Shope proposed.
“Rather than merely requiring disclosure of past donations, this proposal freezes political giving during the active bidding window and prevents potential conflicts before a contract is awarded. This helps ensure that contracts are awarded based on merit, not political connections,” according to a press release from the Governor’s Office.
Hobbs is also calling on the state to upgrade its online portal to create a searchable database of all state contractors, and require those businesses to disclose the names of anyone who owns 5% or more of the company.
But Shope said Hobbs’ plan, which bans contributions during the bid process, wouldn’t address rate increase requests by existing contract holders owned by political allies.
“I would note that there’s nothing in this legislation — I can’t even call it legislation — nothing in this concept that she’s floating that would have prevented the subject that she doesn’t like talking about, which is Sunshine Residential,” Shope said.
Lobbyists too
In addition to reforming state procurement and campaign finance rules, Hobbs is also seeking to ban lobbyists from paying to gain access to state officials, including senators and representatives.
According to the secretary of state’s records, lobbyists and the organizations they represent spent $1.8 million in 2022 on their lobbying efforts.
The governor’s proposal would prohibit lobbyists from “from paying for food and beverages, speaking engagements, travel and lodging, and flowers.”
“Arizonans deserve complete confidence that their government is working for them — not for lobbyists or special interests,” Hobbs said in a statement. “This is one of the most comprehensive transparency and ethics reform efforts our state has seen in decades.
Communication breakdown
Shope is backing separate legislation this year that would require companies responding to state solicitations for grants or contracts to disclose “anything of value” provided to a governor or associated campaign or electoral committees over the past five years.
Shope pointed out that any governor is in a unique position to influence those bids, because of their power over the state agencies that vet those contracts.
“There’s not one member here making decisions on finance or procurement issues like the governor’s office does with billions and billions of dollars of decisions like that, which is why we ran the bill,” he said.
Senate Bill 1186 will be amended to apply to companies currently holding state contracts as well, according to a press release from Senate Republicans.
The bill would also require agencies to preserve any notes taken during the contract award process.
Both Hobbs and Shope said in the past they were willing to work across the aisle to move disclosure legislation forward, but it appears those communications broke down in recent days.
“The Governor’s Office worked in good faith with Sen. Shope on SB 1186, but he rejected our policy ideas and issued a press release instead,” Hobbs spokeswoman Liliana Soto said in a statement. “Now we’re showing the public our policy ideas, and we’re calling on the Legislature to include them in their reform to ensure a bill gets signed, rather than making a political statement.”
Shope said it was too early to comment on the specifics of the governor’s proposal, including the ban on gifts and goods for state lawmakers.
“The refrain that I hear from my Democratic colleagues on a near-daily basis in this place is ‘we’ve just seen the bill,’” Shope said. “In this case, it’s not even a bill, it’s a concept, and so to have anything to say on any specific portion of it would be premature at best.”
SB 1187 is scheduled to be heard in a Senate committee on Wednesday.
KJZZ’s Camryn Sanchez contributed to this report.