By Howard Fischer
Capitol Media Services
GLENDALE -- Gov. Katie Hobbs won't disclose who is helping to fund the legal costs she has incurred in investigations of whether she was involved in a "pay-to-play'' scheme.
Nor does she intend to do so even as at least some of those inquiries continue.
And Hobbs told Capitol Media Services Sunday she plans to continue to collect money for her legal defense fund -- with no reporting of donors to the public -- even after that probe is finished, this time in anticipation of possible upcoming litigation of her reelection campaign.
Candidates must report donations to run their campaigns. That enables individuals to see who has contributed large sums, something that can be relevant in determining whether favors are being returned.
But a 2016 revamp of financial disclosure law removed the requirement to disclose who is providing legal help -- or even the funds given to candidates and politicians to hire their own attorneys.
In the governor's case, that currently includes the law firm of Coopersmith Brockelman. It has been handling the inquiries being made over any link between money given to the governor and the Arizona Democratic Party and a 400% increase in the cash paid by the state to Sunshine Residential for providing group homes for foster children.
"Everything that's required to be reported we have reported,'' the governor said Sunday while on a campaign event in Glendale.
Attorney General Kris Mayes said last month she could find no evidence of a link between the donations and the sharp increase in the contract awarded to Sunshine by the governor's Department of Child Safety.
There are, however, still separate active probes, one by the state Auditor General's Office assisted by Maricopa Attorney Rachel Mitchell, and a second being conducted by an attorney hired by House Republicans.
But Hobbs dodged the question of whether the public is entitled to know who has been providing what is clearly hundreds of thousands of dollars to help her deal with her legal problems -- past, present and future.
Instead, the governor said she would not comment beyond a letter sent to the Attorney General's Office by Andrew Yost, an attorney with Coopersmith Brockelman.
It confirmed what was already known about the $100,000 that Sunshine Residential gave to Hobbs during her 2022 bid for governor and another $300,000 the firm gave that same year to the Arizona Democratic Party.
All that occurred prior to the decision by the Department of Child Safety to accede to demands by Sunshine for more money.
But that letter also disclosed for the first time ever that Sunshine Residential put another $150,000 into a separate Hobbs legal defense fund in 2023 and 2024, after she was elected, and after the company already got the twin raises.
The governor, however, said she won't provide the names of others who have given -- and continue to give?
"I will refer you to the letter that we submitted, the campaign committee submitted, to the AG's office,'' Hobbs said. "And that's all I have to say about that.''
And she brushed aside questions of whether voters should know who might be trying to influence her with large donations -- donations that can run into hundreds of thousands of dollars?
"I have gone above and beyond in being transparent,'' she said.
As proof, Hobbs said she signed legislation that restricts how money raised for inaugural events can be raised and spent.
But that's leaves out an important fact: The 2023 legislation -- adopted by a unanimous vote -- came only after the governor's own 2023 inaugural.
The record shows that a special fund her campaign set up collected more than $1.7 million from donors -- including $250,000 from Arizona Public Service, the state's largest utility. And that was for an event that the inaugural committee said at the time cost less than $210,000.
More to the point, since there was no law at the time, the excess got put into a fund that the governor can use for political purposes. In fact, that inaugural committee still exists, run by Nicole DeMont who also chairs the governor's reelection campaign.
The law signed by Hobbs in 2023 ensures that won't occur again, no matter who wins in November.
It limits individual donations to no more than $25,000. And the funds received have to go into a special "state promotional fund,'' meaning anything left over can be used only for specified state purposes.
Even with new rules about inaugural fund donations, that still leaves any cash raised for the governor's separate legal defense fund totally anonymous and unregulated. Hobbs does not dispute that fact.
But, pressed for details Sunday, she professed ignorance of who has given her cash to help her with her legal woes.
"Not off the top of my head,'' she responded.
What about the major contributors?
"No,'' Hobbs said, cutting off further questions.
"Look, I'm not going to get into it with you,'' she said.
"I've said what I have said,'' Hobbs said. "You can go to the letter. We've reported everything that's required to be reported.''
The governor's legal defense fund is not new.
It actually goes back to the 2022 election when her win was legally contested by Kari Lake, her Republican foe. That resulted in litigation that ran all the way into late 2024 when Lake lost her final appeal to the Arizona Supreme Court.
Hobbs never disclosed how much that legal effort cost.
But one hint came after Lake lost the just first round of the legal dispute in Maricopa County Superior Court in December 2022. At that time, the governor-elect's attorneys said they were entitled to nearly $84,000 in definite fees and expenses and an additional $550,210 in estimated fees.
But Judge Peter Thompson, while agreeing to force Lake to cover some costs, rejected the application for legal fees, ruling that the claims presented "were not groundless and brought in bad faith.''
There were no documents immediately available about the appellate costs.
Hobbs on Sunday repeated her claim that she needs that outside cash -- even if she won't publicly disclose the donors -- and anticipates needing even more money what with the upcoming gubernatorial election.
"The reason we have a legal defense fund is because people like Kari Lake and, now, my opponent Andy Biggs refuse to acknowledge the results of elections,'' she said.
"And as long as they're going to continue working to undermine the will of the voters -- we have no idea what's in store for 2026 -- I'm going to continue to use every tool at my disposal to defend that,'' the governor said. "And that's what we're doing.''
But what the letter from Coopersmith Brockelman to the Attorney General's Office disclosed in its defense of Hobbs in the Sunshine Residential probe is that the fund has been ongoing -- and not just something formed to cover election issues.
"The Legal Defense Fund is not a formal, distinct entity,'' Yost wrote. Instead, he said, these are funds held in the law firm's trust account for the benefit of the inaugural fund and the governor's campaign committee.
Yost said that money gets transferred in and out of the fund at the direction of DeMont who is president of the still-active inaugural fund as well as the reelection campaign. And while he, like Hobbs, provided no details of donors or even the amount of money collected, he did say that it was DeMont who approached Abi Saifi, director of programs at Sunshine Residential, to provide the $150,000 for the legal defense fund as Hobbs was still fighting Lake in court.
Hobbs has a multi-year relationship with Coopersmith Brockelman.
She chose the firm with its long ties to the Democratic Party to represent her in her official capacity as secretary of state -- the job she held for four years before becoming governor -- when her office was involved in election disputes. In those cases, she was able to have the state pay the firm's legal fees.
It also has handled official cases Hobbs since she became governor, also at state expenses, as well as political matters like her legal fight over the 2022 election and, now, queries over money donated by Sunshine Residential to her inaugural campaign and legal defense fund.
Until earlier this year much of the governor's legal business at the firm was handled by Andy Gaona. She subsequently named him to fill a vacancy on the state Court of Appeals.
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