Gov. Katie Hobbs' nominees to again face Arizona Senate confirmation

Gov. Katie Hobbs has agreed to once again send nominees for the heads of state agencies for approval by the state Senate.

The agreement, which still awaits a judge's signature, would end a lawsuit that has been ongoing since December . Republican Senate President Warren Petersen sued the Democratic governor over her workaround to avoid nomination hearings she had called a "political circus."

Frustrated with the way her nominees were being treated in a new committee created to vet them, Hobbs appointed "executive deputy directors" to lead 13 state agencies in September 2023.

Petersen called the stipulated agreement released Monday by Senate Republicans and Hobbs "a win all the way around."

Hobbs and Petersen hammered out the deal just two days prior to an Aug. 14 court hearing in which both sides would have presented oral arguments before Maricopa County Superior Court Judge Scott Blaney. The judge could have then decided to order Hobbs send her director nominees to the state Senate.

The agreement would force Hobbs to send the names of nominees to the state Senate "by the first week of the next Legislative session," as the law requires. That is scheduled to be in early January.

"The Court finds that the Governor did not comply with these requirements for the agency director positions at issue," the unsigned agreement says, backing up Blaney's June order. But the ruling would supersede the June decision, and it would note nothing in either legal document "may be construed as ruling on the validity or legality" of Hobbs' maneuver.

Until the legislative session starts, the officials Hobbs put in charge of the agencies would stay in their jobs.

Hobbs’ spokesperson Christian Slater twice declined to say whether the agreement would change the Senate's confirmation process next year, which has kept many of Hobbs’ nominees from permanent employment.

"While (Hobbs) disagrees with the Senate on the law and is disappointed in the earlier ruling in this case, she has reached an agreement that includes transmitting director nominees to the Senate to ensure stability and continuity for veterans, small businesses and vulnerable Arizonans who rely on state agencies to provide critical services that they need," Slater said. "This outcome, rather than continued litigation, is what’s in the best interest of the State right now."

No other agreements with Hobbs were made, Petersen said.

Hobbs picks could again face Committee for Director Nominations

That means state Sen. Jake Hoffman, chair of the Committee for Director Nominations, could still grill Hobbs' nominees as before — as long as Republicans keep their majority after November's election. The nominees would have a full year to serve unless they were rejected by the committee and, subsequently, a vote by the 30-member state Senate.

Petersen said Hobbs would now send "higher-quality" nominees to the committee.

"There'll be less drama because they'll be competent and they'll be nonpartisan — or they'll be looking at more rejections," he said.

The fight has threatened to upend decisions made by what Petersen has deemed the "fake directors," leading to potential legal chaos. In an ongoing lawsuit over a social equity marijuana dispensary license , lawyers for one side of the case have argued in filings that the executive deputy director of the state Department of Health Service, Jennie Cunico, had "no authority to act on behalf" of the agency when she oversaw the transfer of the license in a state database.

Republican State Treasurer Kimberly Yee has also agreed the executive deputy directors cannot be legally recognized as actual directors. Last year, Yee refused to allow designees for the Department of Insurance and Financial Institutions to sit in for a state Board of Investments meeting.

Petersen said whether decisions made by the executive deputy directors up until now would stand is "going to depend on the courts."

Judge previously indicated workaround was unlawful

State senators typically had approved nominees in committees with experience on the issues of each agency — the health agency director was approved in the Health and Human Services committee.

After voters elected the Democratic Gov. Hobbs, whose politics differed drastically from the Republican-dominated Legislature, Petersen created a new committee to hold hearings on all of her director nominees and put the founder of the conservative Arizona Freedom Caucus, Queen Creek Republican Sen. Jake Hoffman, in charge of it.

Hoffman used the new Committee on Director Nominees to criticize liberal policy positions allegedly held by some of the nominees and delayed hearings for the approval of several others. He and the two other Republicans on the five-member committee temporarily halted the nomination process in protest of an executive order Hobbs signed that banned county attorneys from considering any abortion-related cases.

Calling the situation a "political circus," Hobbs and her staff came up with a workaround Judge Blaney in June found unlawful. The Monday order would supersede that finding.

Records obtained by The Arizona Republic under state public records law showed the process she used to create the workaround.

Hobbs appointed her director of operations, Ben Henderson, as interim director of a dozen agencies. She then had him convey his director powers to her previous nominees, who would then be called "executive deputy directors."

Mark Cardenas, a military veteran, became the interim director of the Department of Veterans' Services to align with a state law requiring veterans to lead that agency. Henderson and Cardenas resigned their positions as interim directors, leaving Hobbs' choices to lead each agency in their positions indefinitely, unbeholden to the confirmation process.

State Attorney General Kris Mayes unofficially signed off on Hobbs' process in a Sept. 25, 2023, post on X.com.

Petersen sued after negotiations on a possible compromise failed.

Blaney ruled in June Hobbs' had "improperly, unilaterally appointed de facto directors for these 13 agencies."

While her actions "in isolation" may have been legal, she took "those actions for an improper purpose, culminating in an improper result — one that violates Arizona law," Blaney wrote. He added that Hobbs can't leave the director positions vacant while ignoring state law covering director confirmations.

He didn't take action at that time, however, instead saying he'd set a hearing in July or August with the hope the two branches of government would find their solution before then.

While state law says "in no event shall a nominee serve longer than one year after nomination without senate consent," lawyers for Hobbs have argued the workaround is legal.

But in July, the state Court of Appeals rejected Hobbs' appeal of Blaney's decision as unripe, since Blaney hadn't taken action. And Blaney rejected Hobbs' request to stay the Aug. 14 hearing.

Reporter Stacey Barchenger contributed to this article .

This article originally appeared on Arizona Republic: Gov. Katie Hobbs' nominees to again face Arizona Senate confirmation