The Senate rejected the nomination of Joan Serviss to lead the Department of Housing on a party line vote on Tuesday, while Gov. Katie Hobbs’ office doubled down on its support of her. 

During an unexpected floor vote, Senate Republicans rejected Serviss’ nomination due to issues found during an Auditor General report and issues raised during Serviss’ first confirmation hearing in 2023.

“As we warned the governor and her team, the Senate could not confirm this Director in good conscience due to the disturbing fraud, waste and abuse that occurred under her watch,” said Senate President Warren Petersen in a statement released after the vote. “The governor had the opportunity to do the right thing here, but she was stubbornly committed to a nominee who

repeatedly proved her incompetence and demonstrated a severe lack of concern for the stewardship of taxpayer dollars.”

Senate Republican leaders called on Serviss to resign last week, saying they would reject her nomination when it came to the floor. Hobbs’ office defended Serviss then and doubled down on her nomination Tuesday. 

Sen. Jake Hoffman, R-Queen Creek, who heads the Director Nominations committee, said the Senate had decided to suspend its rules and vote on the floor because the lawmakers compiled all the information they needed to reject Serviss’ appointment.

“There is absolutely no need to hold another confirmation hearing on someone that we already did due diligence on, already heard, gave an opportunity to respond, and yet still the committee deemed unqualified to serve in that role,” Hoffman said.

Shortly before the vote, Hobbs’ office sent out a press release featuring several bullet points worth of Serviss’ accomplishments and a list of 59 bipartisan leaders who have endorsed her. 

“When I became Governor, I nominated Director Serviss to steer Arizona’s housing efforts amid unprecedented cost increases and to keep Arizona affordable for years to come,” Hobbs said in a prepared statement. “Today, just as two years ago, she remains the best person for the job.” 

Senate Democrats expressed their support for Serviss during the Senate floor vote, listing her accomplishments and framing the Republican rejection of her as a partisan political move.

“Director Serviss is a highly qualified and accomplished public servant dedicated to improving housing for Arizonans,” said Sen. Flavio Bravo, D-Phoenix. “For the last two years, she has led the Department of Housing with skill and integrity.”

Bravo touted her work in investing in the state’s Housing Trust Fund and advancing the creation of affordable housing projects across the state while naming a bipartisan list of supporters, community members and stakeholders who would support her appointment.

“Support for director Serviss remains widespread and bipartisan,” Bravo said.

Sen. Lauren Kuby, D-Tempe, accused the Republicans of rejecting the appointment because of political disagreements.

“We’re not opposed to have the governor’s nominees examined because they should be examined, they should be vetted, their expertise should be studied, their background should be checked,” Kuby said. “But what should not happen in this process is that the members of the Legislature … hold the governor’s appointments because you disagree with them politically.”

Senate Republicans said they could not confirm Serviss due to a report from the Auditor General finding that ADOH inadvertently wired $2 million in state funds to fraudsters. During sunset review hearings on the department, Serviss said it was able to recover the funds and implement safeguards to protect against scammers. 

Hobbs’ office did not address the issue in the press release sent out Tuesday, instead it highlighted ADOH’s work creating affordable housing units, expanding shelter services and more. 

The issue stems from Hobbs’ first attempt to appoint director nominees during her first year as governor. In 2023, Senate Republicans formed the Director Nominations Committee, known as DINO, specifically to vet her nominees and named Hoffman as its chair

After DINO rejected and held several nominees, Hobbs pulled the remaining 19 from consideration and made them “executive deputy directors” which allowed them to run the agency without confirmation. That move became the subject of a lawsuit from Senate Republicans who called it illegal.

Hobbs said Hoffman was obstructing the process and rejecting nominees who were qualified for the roles they were appointed to fill. 

Eventually, Hobbs and Petersen agreed to restart the nomination process with the governor choosing new nominees for three director positions at the Department of Child Safety, the Department of Veterans’ Services and the Department of Environmental Quality. Serviss was one of the nominees rejected by DINO in 2023, but her nomination was resubmitted to the Senate. 

During her first confirmation hearing, Hoffman accused Serviss of plagiarising letters written while she was executive director of the Arizona Housing Coalition and cited that issue as another reason Republicans voted to reject her nomination on Tuesday. At the time, Serviss defended herself from those allegations, saying that many housing groups used shared language when writing letters.

The governor’s office has said that Senate Republicans only objected to the nominees at DCS, DVS and DEQ when finalizing the agreement to restart the confirmation process. However, shortly after the 2024 election, Petersen and Hoffman made statements indicating that other nominees would not make it through the Senate.

A spokesperson for Hobbs’ office declined to comment on what the governor’s next steps will be now that Serviss has been rejected.