Lawmaker raises questions about Hobbs’ inaugural funds

PHOENIX – The head of the House Appropriations Committee wants Gov. Katie Hobbs to tell him about all the money collected and spent by for the inauguration ceremony.

In a letter to the governor, Rep. David Livingston, R-peoria, said he has “serious concerns’’ about funds being solicited and donated specifically for the purpose of sponsoring the Jan. 5 ceremony at the Capitol. After all expenses were paid, the committee that collected the money reported that at least $1.2 million remains.

What is causing concern is that the committee was organized as a “social welfare’’ corporation fund run by Nicole Demont, who ran Hobbs’ successful gubernatorial campaign. And it is not subject to laws governing public records, though organizers did disclose a list of what it said were its donors.

There has been no report, though, of where dollars have been spent.

More concerning to some is that the fund is set up under a section of the Internal Revenue Code which allows its proceeds to be used for political purposes – including helping elect more Democrats in 2024.

In his letter, Livingston cites no authority that would allow him to demand records from the fund. And he did not return repeat messages asking him for any legal basis for his inquiry.

Instead, Livingston is pointing out that a Senate panel is set to consider a measure on Wednesday which would require any future governor to publicly post information detailing each organization that collects money for inaugural festivities as well as the source and use of the funds. Under SB 1299, sponsored by Sen. Wendy Rogers, R-flagstaff, that information would have to be made available within 15 days after the ceremony.

Livingston said that information is needed “to determine whether SB 1299 or any other legislation regulating the solicitation, disclosure, or use of inauguration funds may be appropriate.’’

Hobbs press aide Murphy Hebert said the governor received the letter and is “reviewing it.’’

A similar response came from Joe Woods. He is the spokesman for the social welfare corporation run by Demont which got a nearly identical letter from Livingston.

Neither has much time. While Livingston is not asking for the information ahead of the Wednesday hearing, he does want it by noon on Thursday. And he even offered to have Hobbs, Demont or someone representing them to provide a brief presentation at Monday’s hearing of the House Appropriations Committee.

The issue of the inaugural funds has dogged Hobbs since Capitol Media Services first pointed out that a separate corporation, outside of state government, had been set up to solicit and accept donations. More than $1.5 million was collected by that entity, on top of another at least $85,000 that was given directly to a state-run fund.

Aides to Hobbs said any excess from that latter account will be put into the state Protocol Fund.

Under state law, proceeds from that fund can be used for “promoting the interests of the state or to promote and encourage citizen public service to this state.’’ Governors also have used cash for other purposes, ranging from new office carpeting to gifts for foreign dignitaries.

And an aide to Doug Ducey said some of the proceeds of his first inaugural were used to pay the costs of hiring a transition team.

Most significant, any expenditures from the fund must be disclosed in an annual public report.

But so far, neither Hobbs nor Demont has agreed to put that excess $1.3 million from the larger inaugural account – the one set up outside state government – into the Protocol Fund.

Hobbs has not responded to a request by Senate President Warren Petersen, R-gilbert, and House Speaker Ben Toma, R-peoria, that she surrender control of what’s left in that larger fund. And they have cited no authority to require the new governor to comply.

But in their own letter to Hobbs, they said she should “follow in your predecessors’ footsteps’’ and transfer the excess to the Protocol Fund.