Katie Hobbs' attorneys allege that Doug Ducey illegally issued over $210 million in Rescue Plan funds

16 February 2023

Once a bastion of Republican politics and Goldwater conservatism, Arizona has evolved into a swing state where Democrats are much more competitive in statewide races than they were in the past. In 2023, Arizona has a Democratic governor (Katie Hobbs), a Democratic attorney general (Kris Mayes), a Democratic secretary of state (Adrian Fontes) and a Democratic U.S. senator (Mark Kelly). Arizona Sen. Kyrsten Sinema, now an independent, was a Democrat until December 2022.

Doug Ducey, Arizona's last governor, is a conservative Republican who left office in January. Near the end of Ducey's administration, according to Tempe, Arizona station KJZZ-FM, over $210 million in American Rescue Plan grants were issued. And attorneys for Hobbs allege that they were released illegally.

KJZZ's Ben Giles reports, "A total of 19 non-compete grants were obligated to 16 private organizations in the days after a waiver of the state’s competitive grant process expired, according to the Hobbs Administration. Letters to all 16 organizations — including A for Arizona, the Arizona Chamber Foundation and the Arizona Science Center — were sent February 14 notifying them of the error and the grants' terminations."

Giles notes that Sean Behrens, a senior counsel for Hobbs, has "attributed the error to the Ducey administration's rush to spend ARPA dollars in the waning months and days of his term in office."

"Roughly $950 million in grants were issued in the final quarter of 2022, according to the Hobbs Administration," Giles explains. "In most cases, grants funded to non-state, private organizations are subject to competitive solicitation requirements under state law. But the Ducey Administration waived those requirements for nearly a year by extending a waiver first issued during Gov. Doug Ducey's public health emergency declaration. The initial waiver was extended twice after the emergency declaration ended in March 2022, and ran through December 29."

Hobbs' staff, according to Giles, has "promised to reimburse the organizations for any expenses already incurred under the grant."

Murphy Hebert, Hobbs' communications director, told KJZZ, "No. 1, we're trying to make sure that there’s intervention on the illegally-executed contracts. And No. 2, we want to make sure that the purported grantees have an opportunity to apply under a legal grant-making program."

Ducey is being mentioned as a possible candidate in Arizona’s 2024 U.S. Senate race, but so far, that’s only speculation; Ducey hasn’t actually made any type of announcement. Liberal Rep. Ruben Gallego (D-Arizona), meanwhile, is seeking the Democratic nomination to run for the Senate seat presently held by centrist Sinema. It remains to be seen whether or not Sinema will run for reelection as an independent.

Despite their policy differences, Ducey and Hobbs were on cordial terms during the lame duck session of late 2022/early 2023. Kari Lake, the far-right MAGA Republican who Hobbs defeated in Arizona's 2022 gubernatorial race, has claimed, without evidence, that the election was stolen from her. But Ducey, in contrast, congratulated Hobbs after her victory and vowed to help her with the transition from his administration to hers.

Read KJZZ's full report at this link.

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