Corruption

Donations 'Requested' by Newsom Exploded as His Emergency Powers Ballooned

Big businesses gave millions to Newsom’s initiatives and were rewarded handsomely.

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In 2020, California Gov. Gavin Newsom's office reported that individuals or organizations made $226 million in private donations to organizations at Newsom's request. These "behested payments" were a record-setting haul eclipsing all prior donations on record by nearly $100 million. While most donations supported COVID-19 relief efforts, a closer look suggests Newsom's fundraising was supercharged not just by the pandemic, but also by the broad emergency powers the Democratic governor has assumed because of it.

Behested payments are a unique feature of California politics. State law defines a behested payment as a donation to a government program or charity made "at the request, suggestion, or solicitation of, or made in cooperation, consultation, coordination or concert" with a public official. While payments of $5,000 or more are disclosed to the public, they remain an overlooked portion of politicians' finances, even though contributions often come from businesses with interests in the state government.

Last year, Newsom raised a combined $45 million from insurance giants Blue Shield of California and Kaiser Permanente for Project Homekey, his housing initiative. Newsom had selected Blue Shield CEO Paul Markovich to co-chair California's task force on COVID-19 testing. In January, the governor again tapped Blue Shield, with assistance from Kaiser Permanente, to manage vaccine distribution across the state. That decision has raised eyebrows as the governor's office has remained silent about the particulars of the deal, including why his administration selected Blue Shield and how much the company would be paid.

But Blue Shield and Kaiser Permanente aren't alone. Newsom has committed to spending nearly $4 billion on no-bid contracts to fight the pandemic. A number of companies who lined up for these contracts ended up donating, at Newsom's request, to his various relief efforts.

Since March, Verily Life Sciences has received up to $44 million in three different contracts to help operate COVID-19 testing sites. Verily falls under the same parent company as Google, and in April, Google donated $7 million in ad credits to the governor's COVID-19 ad campaign. That same month, Verily registered to lobby the governor's office. Similarly, AT&T received over $40 million in contracts from the Office of Emergency Services. They donated $310,000 to the governor's office and spent millions more lobbying the state last year. Other donor-contractors include McKinsey & Company and advertising firm Runyon Saltzman.

These types of donations have become a hot-button issue in recent years. In 2019, the Los Angeles City Council debated a measure that would have banned behested payments from city contractors and lobbyists. The Los Angeles Times editorial board endorsed the measure, writing that, "It's no secret that elected officials solicit contributions from companies and individuals with business in the city—or that companies give heavily to local officials," but it's also "safe to assume fewer dollars would flow if donors did not believe that the money helps them get their projects approved or favorable policies adopted."

The pandemic has underscored exactly how true that is. The growth in behested payments has tracked closely with the centralization of political power during the pandemic. While Newsom raised $226 million in 2020, he only raised $12 million the year before. That spike is unique to Newsom. Behested payments to state legislators and other officials were down in 2020. Even if you exclude payments that explicitly mention COVID-19 and related programs, such as Project Homekey, Newsom still raised $8 million more than he did in 2019, a nearly 70 percent increase.

While it's impossible to prove what a behested payment can buy for a company that makes one, it's possible that the benefits exceed government contracts. For instance, critics of California's lockdown orders argue that business restrictions, particularly restrictions on outdoor dining, are hypocritical while the state still allows TV and film production to continue. According to The Intercept's Lee Fang, the entertainment industry's exemption was the result of an aggressive lobbying campaign. Meanwhile, Newsom was courting many of the same companies for his COVID-19 ad blitz. A July press release from Newsom's office announced that "ABC, CBS, NBC, FOX, Univision, Telemundo, Ethnic Media Services, and iHeart Media" each contributed airtime for broadcast and radio PSAs. 

By August, Newsom had even coaxed the first-ever behested payment out of Netflix—whose lobbyist hosted Newsom for an apparently maskless birthday dinner at the famed French Laundry restaurant. Netflix, according to Fang, nearly tripled their lobbying spending in California during the pandemic. 

Would the entertainment industry have received an exemption to Newsom's COVID-19 rules without ponying up? Maybe, but it sure raises questions about whether they were able to buy their way out of the lockdown.

What's more, the ad campaign provided not just awareness of safety measures, but publicity for Newsom. The initial ad blitz featured a cartoon narrated by Newsom as well as a series featuring his wife, Jennifer Siebel Newsom. The governor's political machine is likely to draw upon that publicity as California's pandemic response becomes crucial to Newsom's upcoming reelection efforts. His handling of the pandemic is already a centerpiece of his response to recall efforts, as he increasingly ditches his COVID-19 webcasts in favor of higher-profile outdoor events.

When asked about their fundraising activities, Newsom's office did not respond to Reason's request for comment. But when city officials in Los Angeles were pressed by ethics officials to restrict behested payments from lobbyists and other entities involved in city business, they cited charity as their defense. One council member even asked, "I'm not quite sure—what's the problem we're trying to solve?" 

They were well aware of the problem. In 2018, FBI agents raided the home of Jose Huizar (then a Los Angeles City Council member who has since resigned) as part of an ongoing probe into the city's dealings with real estate developers. According to the Los Angeles Times, Huizar encouraged developers to donate to the high school that employed his wife. Federal prosecutors recently unveiled a 41-count indictment against Huizar which details his alleged corruption, including his coordination of contributions to his wife's school. Even though the cause may have been worthy, the process was inherently political.

Now, the type of sway a powerful city council member holds over a developer has extended into nearly every facet of California's economy, requiring people and firms with money to waste it on courting politicians while less flush parties vie for contracts at a disadvantage. 

Yet behested payments may be the only place in the whole state where money in politics seems exempt from scrutiny. Current ethics rules don't even require that behested payments below $5,000 be disclosed. For comparison, California caps campaign contributions at $4,700 in any given year.

Don't they know the smart people just call it charity to wave away scrutiny?

NEXT: Biden's Manufacturing Plan Is $700 Billion Worth of Protectionism

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  1. He kind of looks like I always imagined Uncle Screwtape would, in that picture.

    1. That greasy hair style has always made me think of the 1920s (although MacNamara really copied that better) or the 1950s. In a few years he’ll face the choice of a greasy combover leaving a greasy bald pate, or a greasy rug. My bet is on a greasy rug. Probably have a few zerk fittings.

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  2. These people make me sick.

  3. “You want a good magazine? Reason magazine… It’s a magazine for libertarians. It’s a magazine for everybody. It’s a magazine for the world. Reason magazine: A good, good magazine.”
    Rush Limbaugh

    1. must’ve been a decade ago

      This place is hot garbage. I come for the comments.

    2. That must have been long before he crawled up Trump’s butt.

      1. Yes because it’s impossible to think that Reason’s been abandoning its principles in order to meet its patron’s wishes.

        1. Evidence?

  4. To date, 28.455 million Americans (8.59%) have tested positive for covid. Since CDC estimates 4.6 times more Americans have been infected with covid (than have tested positive), about 130.9 million Americans (39.55%) have been infected with covid.

    And since just 5 cases of covid reinfection have been identified in the US (and just 49 worldwide), virtually all of the estimated 130.9 million Americans previously infected with covid remain immune from reinfection.

    But Anthony Fauci continues to lie about immunity conferred by past infection (as he is campaigning to vaccinate all Americans). On Sunday’s NBC News he falsely claimed “Prior infection doesn’t protect you against reinfection.” George Stephanopoulos never followed up, allowing Fauci’s Big Lie to spread nationwide (without fact checking or criticism).

    According to CDC, 56.28 million Americans (17.0%) have received a covid vaccine. But since about 40% of vaccines were given to previously infected people (who were already immune), and since the vaccines are about 90% effective, about 9% of Americans have become immune from vaccines.

    Since 39.55% of Americans are immune due to past infection, and since an additional 9.2% are now immune due to vaccines, about 49% of all Americans are now immune from covid.

    During the next several days, over half of Americans will be immune from covid.

    And since herd immunity occurs when/after about two-thirds of a population has been infected or vaccinated, counties and states with a covid case rates above 10% are now experiencing herd immunity, as new cases in those counties and states have plummeted by 80% – 95% to the lowest in the US.

    1. As of 2/17/2021, 66 counties had a covid case rate above 15%.
      Many/most of these high case rates were due to state prisons, meat packing plants and Indian Reservations located in sparsely populated rural counties.

      Crowley, CO – 33.0% (State Prison)
      Chattahoochee, GA – 27.5% (Fort Benning)
      Bent, CO – 24.2% (State Prison)
      Dewey, SD – 23.6% (Indian Reservation)
      Lincoln, AR – 23.3% (State Prison)
      Lake, TN – 22.5% (State Prison)
      Norton, KS – 22.0% (State Prison)
      Bon Homme, SD – 21.5% (State Prison)
      Trousdale, TN – 21.5% (State Prison)
      Buffalo, SD – 20.6% (Indian Reservation)
      Buena Vista, IA – 20.4% (Meat Packing)
      Scurry, TX – 20.0% (State Prison)
      Alfalfa, OK – 19.7% (State Prison)
      Eddy, ND – 19.7%
      Ellsworth, KS – 19.4% (State Prison)
      Bethel, AK – 19.3%
      Forest, PA – 18.8% (State Prison)
      Jackson, AR – 18.6% (State Prison)
      Dakota, NE – 18.4% (Meat Packing)
      Childress, TX – 18.2% (State Prison)
      Lee, AR – 18.1% (State Prison)
      Lassen, CA – 18.0% (State Prisons)
      Lafayette, FL – 17.9% (State Prison)
      Hale, TX – 17.7% (State Prison)
      Big Horn, MT – 17.5% (Indian Reservation)
      Nobles, MN – 17.4% (Meat Packing)
      Lincoln, CO – 17.3% (State Prison)
      Seward, KS – 17.2% (Meat Packing)
      Pawnee, KS – 17.2% (State Prison)
      Logan, CO – 17.2% (State Prison)
      Wayne, TN – 17.2% (State Prison)
      Maverick, TX – 17.2%
      Foster, ND – 17.1%
      Menominee, WI – 17.0% (Indian Reservation)
      Yuma, AZ – 17.0%
      Sheridan, KS – 16.8%
      Lee, KY – 16.7%
      Texas, OK – 16.6% (State Prison)
      Potter, SD – 16.4%
      McKinley, NM – 16.4%
      Walsh, ND – 16.3%
      Ford, KS – 16.3% (Meat Packing)
      Santa Cruz, AZ – 16.3%
      Finney, KS – 16.2% (Meat Packing)
      Aurora, SD – 16.1%
      Crocket, TX – 16.1%
      Morton, ND – 15.8%
      Stutsman, ND – 15.6% (State Prison)
      East Carroll, LA – 15.6%
      Madison, ID – 15.6%
      Lyman, SD – 15.6%
      Lubbock, TX – 15.5%
      Val Verde, TX – 15.4%
      Nelson, ND – 15.3%
      Webb, TX – 15.3%
      Yell, AR – 15.3%
      Culberson, TX – 15.2%
      Burleigh, ND – 15.2% (State Prison)
      Haywood, TN – 15.2%
      East Feliciana, LA – 15.2%
      Cass, IL – 15.2%
      Richmond, VA – 15.1% (State Prison)
      Faulk, SD – 15.1%
      Chicot, AR – 15.1%
      Woodward, OK – 15.1%
      Whitfield, GA – 15.0%

      1. States with the highest covid case rates, and CDC estimated infection rates (i.e. 4.6 times the case rate) are:

        Case Rate – State (CDC Estimated Infection Rate)
        12.9% – North Dakota (59.5%)
        12.5% – South Dakota (57.4%)
        11.5% – Rhode Island (52.9%)
        11.3% – Utah (51.9%)
        11.1% – Tennessee (51.1%)
        11.0% – Arizona (50.5%)
        10.5% – Oklahoma (48.2%)
        10.5% – Iowa (48.1%)
        10.4% – Wisconsin (48.0%)
        10.4% – Arkansas (47.7%)
        10.2% – Nebraska (46.9%)
        9.9% – Kansas (45.8%)
        9.8% – Alabama (45.2%)
        9.7% – Mississippi (44.5%)
        9.6% – Indiana (44.4%)

        Since an additional 6% – 8% of people in these states have become immune from vaccines, these states are very close to achieving herd immunity.

        1. According to estimates at worldometers.info (which I consider close to reality), the following 26 states will continue experiencing huge declines in new covid cases towards attaining herd immunity in the next month or two.
          AL, AK, AZ, AR, CO, ID, IN, IA, KS, LA, MN, MS, MT, NE, NV, NM, ND, OH, OK, SD, PA, WI, TN, UT, WV, WY.

          According to estimates at worldometers.info, the following 15 states will continue to experience significant declines in new covid cases towards attaining herd immunity in the next two or three months.
          CT, DE, CD, GA, KY, MD, MI, MO, NH, NJ, NC, RI, SC, TX, VA.

          And according to estimates at worldometers.info, the following 7 states will continue experiencing declines in new covid cases, but may experience an increase, during the next several months.
          FL, HI, IL, ME, MA, OR, WA

          But perhaps most notable, worldometers.info is estimating increasing numbers of new covid cases in 3 deep Blue states during the next several months. CA, NY, VT

          One thing that is clear, many/most Red states will experience herd immunity before many/most Blue states, which should also change the political discussions and school/restaurant/bar/sports lockdown policies in Blue states.

        2. Apropos of absolutely nothing at all re CA – just like your posts:

          Preliminary estimate of life expectancy in the US dropped by one year in the first half of 2020. CDC link included in that article

          1. Some of the data drilldowns are very surprising to me:
            Life expectancy for black men dropped by 3 years in those first six months.
            The decline is the sharpest since WW2 – when obviously the dead were mostly in their teens and twenties.
            Coronavirus was responsible for about 2/3 of the excess deaths during the early part of 2020
            Blacks die from covid at about the same rate as whites a decade older

        3. Natural herd immunity explains why the rate of new daily covid cases has plummeted in most states during the past 2 – 3 months, which can better understood by seeing the graphs at:
          https://coronavirus.jhu.edu/data/new-cases-50-states

          States with the sharpest declines in new covid cases are:

          North Dakota -93.2%
          Nebraska -92.5%
          South Dakota -91.8%
          Wisconsin -91.0%
          Minnesota -90.8%
          New Mexico -90.3%
          Iowa -90.2%
          Wyoming -89.8%
          Missouri -89.3%
          Tennessee -89.0%
          Michigan -88.6%
          Montana –88.4%
          Illinois -87.5%
          Idaho -86.9%
          California -86.8%
          Indiana -86.2%
          Arkansas -86.2%
          Nevada -85.9%
          Arizona – 85.4%
          Colorado -84.3%
          Ohio -84.1%
          Maine -81.9%
          West Virginia -81.6%
          Alaska -81.4%
          Utah -81.2%
          Washington -81.2%
          Oregon -80.2%
          Kansas -77.2%
          Pennsylvania -74.7%

  5. Never knew the corruption and bribery was this brazen. Guess I shouldn’t be surprised.

    The problem is always government. It defines its own limits, and its own prosecutors, police, and judges bat down everyone who interferes or even seems likely to interfere. according to their own rules, beholden to nothing except a vote once every few years which has to stand for everything which might happen before the next election.

  6. whether they were able to buy their way out of the lockdown.

    “That’s a nice Small Business you have there… Shame if it were to fall subject to ‘the health and safety of the Whole,’ eh?”

    1. And who says CA wouldn’t elect an Al Capone?

      1. Don’t compare Al to that creep.

  7. Oh, leave him alone. Obviously, he needs power and money to fix everything and help everyone.

  8. It’s good to be King.

  9. “…One council member even asked, “I’m not quite sure—what’s the problem we’re trying to solve?”…”

    Well, at least we now know what M4e does for a living. Or Jeff.

  10. Crony Socialism

    1. Exactly what I was thinking – leftist utopia.

    2. Yep – leftist utopia, for sure.

    3. Crony is redundant.

  11. The California dictator Gavin Newsom has set himself up to be the beneficiary of crony capitalism and political graft.

    Hopefully he will be recalled and replaced by someone with less authoritarian tendencies.

    My preference would be a Libertarian or at least a libertarian. Realistically this would be a left leaning libertarian in California.

    1. So just what is a “left leaning libertarian?”

      “I’m gonna fuck wij u, just not as much as da otha guy?”

      1. Long as you bake that cake we’re cool.

  12. A guy that wants to ease COVID restrictions as his constituents are assembling to remove him from power over said restrictions is corrupt? Colour me shocked.

  13. Funny how all this is suddenly coming out now and not last year.

  14. “Big businesses gave millions to Newsom’s initiatives and were rewarded handsomely.”

    Standard Operating Procedures in California. No news here.

    1. Thankfully the Democrats aren’t trying to turn the rest of the country into California.

      1. Yeah. But, the repubs seem to be doing pretty much the same. It seems nearly everyone is rather fond of “Big Gubbmit” financed by “Big (insert any number of industries here).” Of course, it’s been more like than unlike that for as long as I have been around. And that is a looong time.

        1. Maybe you could of like tweaked the constitution to prevent this shit instead of banging all of those lovely Nubian goddesses.

          1. Yeah, well, if not for those damn Federalists…..

  15. America would be better off without Newsom and his relative Nancy Pelosi. Nancy is worth over $110,000,000 …

    Politics have been very kind to the Pelosi’s and Newsom’s.

  16. “Nice biz you got there, be a shame if something happened to it.”

  17. It seems to me that the proper definition of “behested payment” is “extorted bribe”.

  18. Gabbin Nuisance, nephew of Nazi Pelosi shows off his art of the steal. Enjoy the absolute corruption of absolute power. One party FAR left extremist rule.

    1. Hawhawhaw…

      That sure is meaningful commentary…

      ‘Nazi Pelosi’… that really is informed commentary!

  19. Almost didn’t click on this one when I saw the name Jacob. Please don’t lie to us Jacob. Like the other Jacob did.

  20. Is there anyone left in California? and why?

  21. It’s important to stay educated and informed with the proper information during the difficult times of COVID-19. In the world, we live in right now it’s important to do the best we can to have patience, follow the rules, have common sense, and do the right thing.

  22. Go ahead and diss California. But, I know California is doing the right thing because we have the highest energy prices in the nation here plus the highest income tax rate. Yes, I know that we have the worse schools, the worse roads, some of the most littered roads, the highest income inequality in the nation, the highest homeless rate, but we have the highest income tax and sales tax rates of just about any other state in the nation. As a Californian, I know that high taxes are good. We don’t pay enough in taxes. Without California, the rest of the country wouldn’t have a clue on how to properly virtue signal.

    1. If you dislike it here so much, why don’t you just LEAVE?

      Or is it better to stay and complain nonstop?

  23. Wow…

    the comments threads here are somewhat akin to ruptured sewer lines… the s**t just flows nonstop.

  24. thanks for following this up…once he’s out we’ll see this was about a lot more than the idiotic COVID responses

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