Arizona attorney general to crack down on misuse of ESA funds

PHOENIX — Arizona Attorney General Kris Mayes is outraged that parents of home-schooled and private school children are using Empowerment Scholarships to purchase luxury items, such as diamond rings, and plans to file a lawsuit to crack down on the misuse of funds.

Mayes, in an exclusive interview with 12News, said she was shocked at the I-Team’s findings of the Department of Education’s approved purchases of iPhones, Kenmore appliances, and even lingerie with state tax dollars.

RELATED: I-TEAM: ESA parents bought diamond rings, lingerie, and Kenmore appliances with education tax dollars

“I think that every Arizona taxpayer has every right to be demanding what in the hell is going on inside both the ESA program, but also the Department of Education,” Mayes said. 

The Democrat, formerly a Republican, said she likely would file suit in the coming weeks against State Schools Chief Tom Horne and his agency after it automatically approved more than $124 million in ESA payments since late November.

Horne’s policy to approve every ESA request of $2,000 or less and audit later set off a spending spree by ESA parents.

12News obtained records of the more than 1 million automatically approved purchases since last year and found parents used tax dollars on numerous “unallowable purchases” like diamond rings and necklaces, designer clothing, gift cards, airline tickets, resorts and dog food.

Horne has repeatedly said he has only 12 staff members to review the tens of thousands of ESA requests from the 90,000-plus accounts. And he said Gov. Katie Hobbs, a Democrat, and the Republican-controlled Legislature did not approve additional positions.

Horne told 12News that since he took office in 2023, shortly after the ESA program was expanded to all Arizonans, his staff has or will recover at least $622,000 in fraudulent purchases from nearly 200 people.

“That’s about 1 percent of the total requests, which is what you would expect for improper requests,” Horne said.

Mayes said Horne, who was Arizona attorney general from 2011-2015, should do better.

“We intend to ask Tom Horne some hard questions about this,” she said. “We have a public monies investigation into the ESA program, and this is only going to ramp that up. I would also say that litigation is on the table.”

Mayes said she also wants additional information on the $444 million of unused ESA funds and six-figure accounts, which 12News also uncovered.

“Now that we know that this money has been spent on diamonds, you have to ask the question: ‘Could somebody go spend $250,000 on a down payment on a house?’ she said. “There are so few guidelines around this program.”

Mayes declined to specifically say what legal action she would take. 

She also did not rule out going after ESA parents who made improper purchases.

Mayes this year has joined other attorneys general across the country in suing the Trump administration at least 25 times on issues she claims the federal government has violated the Constitution or harmed Arizona.

She also said the GOP-controlled Legislature has caused the ESA program, which will cost at least $1 billion this school year, to get out of control with nearly no guardrails on spending.

“They are the ones that allowed us to get to this point, where taxpayer money is being used on diamonds and lingerie,” Mayes said.

12News this week attempted to interview Senate President Warren Petersen, a Republican who is running for attorney general. 

He refused to answer questions and walked away when asked about the ESA program.

Meanwhile, Horne spokesman Doug Nick said 400 of the roughly 90,000 ESA accounts have been suspended for improper spending. 

He added those parents have due process rights before cases can be referred to the attorney general’s office for prosecution.

Mayes said she plans to act on her own.

“We have the ability to investigate and enforce the law as well,” she said. “This scandal could ultimately crater the entire program, and that would be catastrophic for those families who really need it.”