Key Points:

• Dana Allmond to receive $170,000-a-year contract renewal at DES

• The agency recently eliminated 5% of staff due to federal grant reductions 

• An opponent of Hobbs calls the contract a ‘slush fund’ for governor’s friends

Dana Allmond is going to get another $170,000-a-year contract in a job created by the Hobbs administration after the governor replaced her as head of the Department of Veterans’ Services.

The Department of Economic Security confirmed to Capitol Media Services that it is renewing the contract for Almond to be a “senior executive consultant” for the agency. Christian Slater, press aide to Gov. Katie Hobbs, said she is part of the DES “senior engagement team” helping veterans access the services they need from the agency.

The new contract comes as DES has just announced the elimination of 5% of its regular staff due to both the reduction of federal grants and the federal government’s shifting of costs to the state. The fired workers got a 2 1/2-week notice with their final day last week, just days after Allmond’s new contract took effect.

Slater, however, said that development is irrelevant to Allmond’s new contract.

“The workforce reduction at DES was an unfortunate consequence of the Trump administration’s reckless cuts that endanger DES’s work to combat fraud and efficiently deliver the critical services Arizonans rely on,” he said.

And what of the money being spent — not only on Allmond, but on a $114,00-a-year separate contract for Marcus Trombetta, to work with her, while DES staffers are losing their jobs?

“To conflate the two is nonsensical,” Slater said.

This is her third position with the state in less than three years.

Hobbs hand picked Allmond in 2023 to run the Department of Veterans’ Services after the Marana Democrat, a retired Army lieutenant colonel, lost a 2022 bid for the Legislature.

Last year, the governor had a fight with Sen. Jake Hoffman and the Republican-led Senate over getting her nominees approved, including Allmond. After a judge ruled that the governor had illegally avoided the required Senate confirmation, Hobbs agreed to resubmit most of their names for proper consideration.

Allmond, however, was not on that list.

Instead, Hobbs withdrew her nomination and replaced her with John F. Scott, who had been her deputy. Allmond was demoted to deputy but allowed to keep the same $170,000 salary.

Then, at the beginning of this year, DES created a new position for her, also at the same salary.

The issue came up earlier this year when Michael Wisehart, appointed to head DES, was quizzed during his own confirmation hearings. Hoffman, who chairs the Committee on Director Nominations, asked him about what exactly Allmond was being paid to do.

Wisehart responded that she was going to help connect veterans with services.

Hoffman countered that was the responsibility of the Department of Veterans’ Services. Wisehart did not dispute that, but said DES also has programs that work with veterans.

Wisehart also made it clear during that hearing that hiring Allmond wasn’t his doing. He said she was already under contract when Hobbs named him DES director in January.

The renewed contract caught Hoffman’s attention.

“Katie Hobbs’ jaw-dropping, nearly $600,000, handout of taxpayer money to a former Democrat politician and her assistant for newly invented jobs reeks of corruption,” he told Capitol Media Services.

And Hoffman noted that, unlike the first contract, the renewal came while Wisehart was in charge.

“Wisehart could previously wipe his hands of Hobbs treating Arizona’s government like her personal friends-and-family slush fund,” he said.

And now?

“He’s lost his ability to distance himself from her corrupt and wasteful hiring schemes,” Hoffman said.

But Slater, defending the contract renewal, said that Allmond and Trombly are needed even though DES already has a program designed to help veterans and eligible spouses obtain employment and job training.

“As many veterans continue to face economic challenges, this is important work that will help Arizona better serve the brave men and women who served us,” he said. Slater said the pair are helping military veterans and their families “navigate the range of services available to them, and identifying barriers they face in obtaining assistance.”

However, he would only dismiss as “nonsensical” any questions about why the state awarded new contracts to the pair during the layoffs.

Wisehart said those layoffs were necessary.

“We have been closely monitoring our fiscal situation with a strong commitment to avoiding staff reductions,” Wisehart said in a statement prepared for Capitol Media Services about the job cuts. “Despite implementing cost-saving measures to maintain workforce stability while addressing budget constraints, the financial challenges have persisted, making it impossible to sustain our current staffing levels.”

And that will affect the Arizonans whom the agency is supposed to serve, not just with job training and unemployment compensation, but also other DES-administered programs like food stamps.

“We cannot compensate for millions in funding cuts without significant impacts to clients,” he said.

Layoffs alone may not solve the agency’s financial issues.

Generally speaking, the Supplemental Nutrition Assistance Program is paid for with federal dollars, with the states sharing in the cost of administration.

Now, the new federal budget is shifting a greater cost to the state, boosting administrative costs to the state by $38 million, to $113 million.

And the federal budget also includes a new charge to states based on their payment “error rates.” Here, too, DES is expected to absorb about $115 million a year.