Mayes Takes Center Stage in Battle for Opioid Settlement Billions

PHOENIX — Arizona Attorney General Kris Mayes is considering a potential legal challenge against Governor Katie Hobbs and the state Legislature regarding the allocation of funds from a significant opioid settlement.

During a briefing with Capitol Media Services, Mayes revealed she has gathered new evidence suggesting that $115 million directed to the Department of Corrections, Rehabilitation and Reentry is being misused. Notably, nearly $40 million could be redirected to purchase drugs for treating Hepatitis C in inmates, which she argues does not align with the intended use of the $1.14 billion settlement sourced from opioid manufacturers and distributors.

Mayes emphasized the dire context of this misallocation: “People in Arizona are dying from fentanyl overdoses. This opioid money should have gone to address that critical issue.” Earlier this year, she attempted to halt the transfer of these funds through a court intervention.

In June, Maricopa County Superior Court Judge John Hannah acknowledged that the settlement agreements impose restrictions on how the funds can be spent. Nevertheless, he noted there was insufficient evidence at that time to support Mayes’ claim of legal violations concerning the budget allocation.

The judge’s recent ruling also mandated that Mayes’ office cover approximately $70,000 in legal fees incurred by the governor’s office and state agencies in defense of this allocation. Mayes, however, pointed out that the judge allowed for future legal recourse should evidence arise indicating the funds were indeed misappropriated.

“We’re looking at all options,” she asserted, highlighting her determination to rectify the potential misallocation.

In response, gubernatorial press aide Christian Slater countered Mayes’ assertions. He referred to the Attorney General’s own documentation, which he claims supports the permissible use of settlement funds for opioid treatment within the correctional facilities. Mayes’ spokesperson, Richie Taylor, contended that while Hepatitis treatment does not fall under the intended use of the opioid funds, even if it did, it remains an inefficient expenditure of resources.

“The treatment of inmates for Hepatitis C is the state’s responsibility, not a suitable application of limited opioid settlement funds,” Taylor said.

Slater criticized the prospect of Mayes returning to court, arguing that her actions could jeopardize essential treatment for those afflicted by the opioid crisis: “This is important funding that will reduce recidivism and help break the cycle of fentanyl addiction,” he declared.

The fundamental agreement among stakeholders is clear: the opioid settlement was designed to mitigate the impact of the opioid epidemic caused by pharmaceutical companies. Mayes has insisted that the settlement agreements strictly mandate the usage of funds for specific abatement purposes, not general state operations.

Despite lawmakers’ budget language claiming the funds would address opioid-related care, Mayes alleged that the true purpose was to offset existing budgetary shortfalls. She initially succeeded in obtaining a temporary restraining order to freeze fund disbursement but met resistance from the governor and the legislature, who sought immediate judicial intervention.

Judge Hannah acknowledged the rationale behind Mayes’ concerns but indicated that she could not unilaterally dictate fund distribution against the wishes of the governor and lawmakers. Nevertheless, he did leave the door open for her to revisit the court if new evidence emerges demonstrating misuse of the funds.

Mayes claims she has now acquired that evidence and is contemplating her next steps. At the same time, she conceded that recouping previously allocated funds could present significant challenges.

“It’s hard to recoup money once it’s already spent,” Mayes admitted, focusing particularly on the $40 million earmarked for Hepatitis C treatment.

Nonetheless, she pointed to over $23.2 million still available from the current year’s allocation and $40 million set aside for the upcoming budget year, which begins July 1, 2025.

“I would love to put that money to use in other places in Arizona,” she said, citing interest from state lawmakers for nonprofits addressing opioid addiction among infants.

Mayes had previously proposed her own allocation plan for the settlement funds, which included $10 million specifically for medication-assisted treatment for incarcerated individuals, alongside critical funding for rural detox centers and opioid prevention training for school counselors.