Democratic Gov. Gavin Newsom of California has several business ties to the collapsed Silicon Valley Bank (SVB), which he failed to disclose when praising the Biden administration’s decision to guarantee the deposits of all the bank’s clients, even those above the usual limit of $250,000 that aren’t eligible for federal insurance, according to investigative journalism outlet The Intercept.
A trio of wineries owned by Newsom — CADE, Odette and Plumpjack — are all named publicly as clients of the bank, and the governor has maintained personal accounts with the bank for years, The Intercept reported, citing a former employee of Newsom’s responsible for managing his finances. On March 11, the day after the FDIC formally took over SVB, Newsom announced that he had been “in touch with the highest levels of leadership at the White House and Treasury” for the past two days regarding the crisis.
Newsom also publicly praised the Biden administration for acting “swiftly and decisively to protect the American economy,” after the Federal Depositors Insurance Corporation (FDIC) invoked a “systemic risk” exception to guarantee that all clients of SVB would be made whole, in a statement Sunday.
I'm not sure what this says about the management team at Silicon Valley Bank or what leverage Gavin Newsom had over them, but the governor raised $100,000 for his wife's nonprofit, the California Partners Project, by "asking" SVB to donate to it. Behested payment reports: https://t.co/pZBIaVcLwO pic.twitter.com/59Pyk6KCE9
— Susan Shelley (@Susan_Shelley) March 10, 2023
SVB — which became the second largest U.S. bank to fail after it collapsed amid a bank run on March 10 — also donated$100,000 to the California Partners Project (CPP), a nonprofit founded by Newsom’s wife, Jennifer Siebel Newsom. The gift took the form of a “behested” payment, which means it was made “at the request, suggestion, or solicitation of, or made in cooperation, consultation, coordination or concert with the public official,” in this case Newsom.
John China, president of SVB Capital, is both a board member and gender equity advisory council member at the CPP, according to the group’s website.
“Governor Newsom’s business and financial holdings are held and managed by a blind trust, as they have been since he was first elected governor in 2018,” Nathan Click, a Newsom spokesperson, told The Intercept.
Newsom’s blind trust is managed by family friend and attorney, Shyla Hendrickson, while his sister Hilary Newsom, has continued to serve as the president of PlumpJack Group, a set of businesses founded by Newsom including hotels, wineries, restaurants and liquor stores. However, a similar system used by then-President Donald Trump, which installed his sons as the leaders of a blind trust that managed his business affairs upon taking office, has been criticized by ethics experts as misleading, since Trump was still aware of what businesses he owned, according to The Intercept.
The Biden administration’s restoration of deposits greater than the statutory limit of $250,000 will also make whole more than 1,500 climate companies poised to take advantage of subsidies and programs offered by the president’s signature Inflation Reduction Act.
Newsom’s office did not immediately respond to a Daily Caller News Foundation request for comment.
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