Governor Newsom-founded NorCal Company Receives Up To $ 350,000 In Federal Coronavirus Aid
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Companies linked to California Governor Gavin Newsom, Lieutenant Governor Eleni Kounalakis and two of the state’s legislative leaders were among those that received federal loans aimed at keeping small businesses afloat during the coronavirus pandemic, according to the files published on Monday.
Northern California wine and hotel company PlumpJack, founded and partially owned by Newsom, has received a loan of $ 150,000 to $ 350,000 from the Paycheck Protection Program, according to data released by the US Treasury Department.
Before taking office as governor in 2019, Newsom announced that he would step down from his businesses and put his assets in a blind trust managed by a family friend and a lawyer.
“You should ask the people who run these companies,” Newsom said in response to a question about why his company applied for the loan.
McKenzie Ward, vice president of marketing for PlumpJack Group, said the governor “has no say in the decisions we make” and the company is grateful for the benefit of the help. Federal data shows the loan saved 14 jobs.
A labor consultancy firm run by Senate Minority Leader Shannon Grove, a Republican from Bakersfield, received a loan in the same dollar range. Grove listed herself as President and CEO of Continental Labor Resources Inc. on the most recent public disclosure forms, indicating that she had income in excess of $ 100,000. The loan saved 365 jobs at the company, the data showed.
A consulting firm founded and run by Jennifer LeSar, the wife of State Senate President Pro Tem Toni Atkins, D-San Diego, has received a loan in the range of $ 350,000 to $ 1 million, helping to keep 15 jobs. LeSar Development Consultants has California cities and housing groups among its clients, working on homelessness and affordable housing policy.
Kounalakis’ husband, Markos Kounalakis, is a manager of a family-owned real estate company in Sacramento that received a loan worth between $ 350,000 and $ 1 million. In state public disclosure forms, Eleni Kounalakis reported that her husband, a longtime foreign affairs columnist and analyst, was paid between $ 10,000 and $ 100,000 from AKT Investments Inc., which considers himself as the largest land development company in Northern California.
Nothing prevents elected officials from requesting and receiving loans. Bob Stern, former president of the Center for Governmental Studies in Los Angeles, said he saw nothing wrong with this. But he added that transparency still matters.
“Anytime federal money goes to government-owned businesses, the public should know it,” Stern said.
Under the PPP initiative, the government is supporting $ 659 billion in low-interest business loans that will be forgiven if employers use the money for payroll, rent, and similar expenses. Companies generally must have fewer than 500 workers to be eligible.
The public may never know the identity of more than 80% of the nearly 5 million recipients to date, as the Trump administration has refused to disclose details of loans under $ 150,000 received by the great majority of borrowers.
The secrecy sparked legal action by a group of news agencies, including the Associated Press. Yet the data dissemination is the most comprehensive look at program beneficiaries to date.
Records show that more than 87,000 California businesses have received loans worth $ 150,000 or more.
Newsom’s company, PlumpJack Management Group LLC, is part of a portfolio of brands that includes a resort hotel near Lake Tahoe, five restaurants and bars, four Napa Valley wineries, a sports retailer and more. Her blind trust is managed by Shyla Hendrickson.
Hendrickson did not return emails indicating whether Newsom’s businesses received loans under $ 150,000.
Newsom developed PlumpJack after helping him found a liquor store in San Francisco in 1992, on the same street where the management group is still located.
Financial disclosure forms give an imprecise figure on what Newsom gets from the five companies in the PlumpJack portfolio. For 2019, Newsom reported annual state financial disclosure forms making at least $ 200,000.
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