The facts
House Speaker Steve Montenegro, a Republican from Goodyear, sent a criminal referral to the U.S. Department of Justice's National Fraud Enforcement Division on July 21, according to documents obtained by The Arizona Republic. The referral says the House's investigation uncovered "substantial evidence" that leaders of Sunshine Residential Homes committed bribery, wire fraud and honest services fraud.
The referral grew out of a House Republicans' investigation launched in February that cost taxpayers over $300,000. Records show the probe, run by the Missouri-based James Otis Law Group, cost almost $307,000, mostly attorneys' time. The firm was founded by John Sauer, who is now President Donald Trump's solicitor general at the DOJ.
There is no public evidence the federal government did anything with the referral. In late September, more than two months after it was sent, spokespeople for the Governor's Office, the Department of Child Safety and Hobbs' campaign said they had not been contacted by the DOJ. The company's attorney said Sunshine Residential had not been contacted either. A DOJ spokesperson said the department does not comment on investigations.
Sunshine Residential has for decades run group homes for children removed from their families by the Arizona Department of Child Safety. In 2023 it received a special rate increase worth approximately $4 million a year, though other providers were denied. Around the same time, its leaders, including CEO Simon Kottoor, were touting their connections to newly installed Gov. Katie Hobbs, and the company began giving to support Hobbs' political operation, contributing over $550,000.
Former DCS Director Mike Faust told House investigators that Kottoor offered to recommend Hobbs keep Faust in the job if Faust approved a special rate increase for Sunshine Residential. Faust declined the offer. The company's attorney says Faust's claim is disputed, that Sunshine was never given a chance to respond before the referral, and that the House withdrew its subpoenas to the company.
The state Attorney General's office investigated for over two years and concluded in August that there was no evidence Hobbs or her staff committed bribery. Republican lawmakers accused Attorney General Kris Mayes, another Democrat up for reelection in November, of covering up for Hobbs, while admitting there was no evidence of a crime.
House GOP spokesman Andrew Wilder said the rate increases resulted in approximately $20 million in additional state payments to Sunshine Residential, and that the House had a responsibility to examine what happened. The House finished its fact-finding and will hand its work to the Arizona Auditor General, which with the Maricopa County Attorney's Office launched its own investigation in 2024 that is still ongoing. In September, Arizona Senate Republicans launched another investigation, the fourth government-funded probe of a situation first publicly revealed over two years ago.
Our take
What the fuck is wrong with these people? Steve Montenegro, a Republican dickhead from Goodyear, just spent $307,000 of your money to produce a piece of paper so worthless that the Department of Justice, an institution currently run by his own party's president's fucking solicitor general, couldn't even be bothered to send a 'Read: 2:47 PM' receipt. That's not an investigation; that's a $307,000 taxpayer-funded wank into a federal mailbox. For that price, you could hire a team of actual detectives, or you could buy a single Ferrari, or you could just light the cash on fire and at least keep some homeless people warm for a night. Montenegro chose the legal equivalent of setting the money on fire and then mailing the ashes to Washington, D.C. What a useless, grandstanding prick.
And what was this monumental waste chasing? The spectacularly clumsy attempt by Sunshine Residential CEO Simon Kottoor to buy influence. According to the former state child safety director, this genius offered to put in a good word to keep the guy's job if he approved a special $4 million-a-year rate increase for his company. The director said no. Think about that: the alleged bribe was so transparently stupid that the supposed mark turned it down immediately. This isn't 'House of Cards'; it's 'Dumb and Dumber: The Foster Care Edition.' Yet Kottoor's company still got the rate hike nobody else did and then shoveled over $550,000 into Governor Katie Hobbs' political machine. Her defense is that another Democrat investigated for two years and found no crime. Great. So the standard is now 'a friendly attorney general couldn't quite make the charges stick.' That's not an exoneration; that's a confession that the system is so fucked you need a signed, notarized video of the money handoff to even get a subpoena.
Meanwhile, the Republican clowns in the legislature are having a full-blown, multi-agency panic attack. The state AG said no crime. So the House spent $307,000 and said 'fuck you' to the AG. The feds got the referral and said nothing. So the county attorney started a probe. And now, because clearly the problem is that not enough government lawyers are billing hours to this shitshow, the Arizona Senate has launched investigation number four. That's four separate government-funded probes into the same set of donations, resulting in exactly zero fucking charges but approximately $20 million in extra state payments to the company at the center of it all. The only thing flourishing in Arizona politics is the consulting industry for investigating Arizona politics. It's a perpetual motion machine of graft, where the only guaranteed payout is to the lawyers and politicians pretending to look for graft. They're all a bunch of grifting bastards, feeding at the same rotten trough and pointing fingers at each other with one hand while palming your cash with the other. It's a carnival of cunts, and you're paying for the tickets.
