Four payments of $25,000.
That’s the amount California Gov. Gavin Newsom requested the now-defunct Silicon Valley Bank give his wife’s woke “gender equity” foundation, the California Partners Project, in 2021. The foundation doubles as a PR platform for Jennifer Siebel Newsom, Newsom’s wife. The bank complied.
Those “donations” were classified as “behested payments,” meaning the donations were made at Gov. Newsom’s specific request and publicly reported by Silicon Valley Bank as such.
In addition, John China, the president of SVB Capital, was a founding member of the board of directors for Siebel Newsom’s foundation, demonstrating an even closer financial relationship between the Newsom family and Silicon Valley Bank.
Newsom’s wife is advantaged by donations to the California Partners Project. When the foundation does well, it lifts up Siebel Newsom’s image — and, by extension, Newsom’s image.
In 2021, the year the money was donated to the California Partners Project by Silicon Valley Bank, Siebel Newsom made appearances under the auspices of her role at the California Partners Project on CNBC’s Closing Bell, in Motherly Magazine, and at the Nasdaq Entrepreneurial Center IPO Bootcamp. In addition, the foundation sponsored a “listening tour” led by Siebel Newsom. The foundation provided her a platform to increase her fame and influence.
With Silicon Valley Bank’s collapse, those donations made at the governor’s request raise questions about whether the governor, in the years leading up to the bank’s collapse, had an incentive to favor the now-collapsed California-headquartered company, which is under investigation by the Department of Justice.
It’s a reminder of how “behested payments” are fraught with a danger of favoritism and corruption. For example, former California state Sen. Ron Calderon was sent to prison for agreeing to advance legislation in exchange for a donation of $25,000 to a nonprofit run by his brother.
In 2022, the Los Angeles Daily News speculated as to whether donations to Siebel Newsom’s foundation at the governor’s behest could constitute a gift, which must be granted under a set of different regulations than donations. In a three-year period from 2019 to 2022, Siebel Newsom’s foundation received $1,671,680 at her husband’s behest.
The Los Angeles Daily News drew attention to the Fair Political Practices Commission’s guidance that “A reportable behested payment that also results in any personal benefit to the official may be considered a gift to the official even when the payment is not made principally for personal purposes.”
Indeed, it certainly seems that donations to the California Partners Project personally benefited Newsom and his family.
Silicon Valley Bank’s donations to Siebel Newsom’s foundation shed light on a repeated pattern of Newsom: giving benefits to those companies that make large donations where he tells them to.
In 2020, organizations and individuals reported that they had made an astounding $226 million in donations at the California governor’s behest.
Reason magazine reported in 2021 that Blue Shield of California and Kaiser Permanente donated $45 million at Newsom’s request to Project Homekey, the California Department of Housing and Community Development’s initiative on homelessness. Conveniently, the two insurance companies happened to receive no-bid contracts to manage vaccine distribution in California.
Another example is Verily Life Sciences, which received up to $62.5 million to operate COVID testing sites in California. Its parent company, Alphabet Inc., donated $7 million in advertising to Newsom’s COVID ad campaign.
Then there’s AT&T, which received tens of millions of dollars in contracts following a $310,000 donation to the governor’s office.
Another example is Bloom Energy, which former Newport Beach Mayor Will O’Neill reported in National Review donated $85,000 before receiving a $2 million no-bid contract from the state of California.
O’Neill also noted that the president of BYD Auto donated $40,000 to Newsom before the company received a $996 million no-bid contract.
The Sacramento Bee reported that, at Newsom’s specific request, Six Flags donated $4.5 million in free tickets to people who got vaccinated. That donation occurred after the theme park used significant resources to lobby the governor to reopen theme parks.
The Sacramento Bee also reported that Facebook donated $2.1 million to various California governmental initiatives at the same time as it was lobbying the state of California on “a range of issues.”
This all raises the question: What, if anything, did Silicon Valley Bank, which has done so much damage to America’s economy, get out of its “donations” to the California governor’s wife’s foundation?
And those payments to Siebel Newsom’s foundation aren’t the end of Silicon Valley Bank’s efforts to ingratiate itself with the state of California. In 2021, SVB Financial Group announced an $11.2 billion “community benefits plan” that would “focus on providing financial support to [low- and moderate-income] communities in California and Massachusetts.” One could reasonably conclude that SBV Financial donated billions of dollars in financial assistance to residents of California with the hope that it would get something out of it.
Moreover, in 2015, Silicon Valley Bank donated $9,301 to Gavin Newsom’s Campaign Committee soon after Newsom announced his first (failed) bid for the governor’s office.
Newsom’s personal financial relationship with Silicon Valley Bank has exploded into a scandal in recent days.
Three of his companies, CADE, Odette, and PlumpJack, were clients of Silicon Valley Bank. In addition, according to a report by the Intercept, Newsom maintained personal accounts at the bank.
Shockingly, Newsom failed to mention that his own financial situation was at stake when it came to the federal government’s decision to guarantee Silicon Valley Bank depositors’ funds.
Without a mention of its relevance to himself, Newsom publicly lauded the federal government’s decision, stating it “acted swiftly and decisively to protect the American economy and strengthen public confidence in our banking system.”
Newsom also said that he actively communicated with the Biden administration about Silicon Valley Bank’s collapse prior to the administration’s decision to guarantee depositors’ funds.
On Saturday, he said, “Over the last 48 hours, I have been in touch with the highest levels of leadership at the White House and Treasury. Everyone is working with FDIC to stabilize the situation as quickly as possible, to protect jobs, people’s livelihoods, and the entire innovation ecosystem that has served as a tent pole for our economy.”
What’s unclear is whether or not Newsom actively lobbied the federal government to take the action that it did. As the governor of the state where Silicon Valley Bank was headquartered and where the largest group of Silicon Valley Bank customers lived and ran their businesses, it is certainly possible that his input had a major impact on the government’s decision to guarantee all funds. It seems that such a decision could potentially benefit Newsom personally, given that his businesses were clients of Silicon Valley Bank, though it remains unclear whether or not those deposits exceeded the $250,000 insured by the Federal Deposit Insurance Corporation.
In addition, the federal government’s decision to guarantee all deposits certainly benefits Silicon Valley Bank’s past executives, who, as a result of the decision, will not be subject to the ire of past customers who lost their money permanently and will likely face less severe lawsuits.
That Newsom maintained ownership of his businesses after he assumed the governor’s mansion had long been criticized by California media outlets for its potential to color his decisions as governor or to give the appearance of doing so. That decision to maintain ownership of his companies is now raising serious questions about whether his actions on Silicon Valley Bank were based on what is best for the state of California or what is best for himself.
The scandal is bigger than that, though. There is a monetary relationship between the Newsom family and Silicon Valley Bank in the form of four $25,000 checks. Investigators looking into Silicon Valley Bank’s collapse should consider whether or not Newsom granted Silicon Valley Bank or its executives special treatment on the basis of that financial relationship.
And, as the Los Angeles Daily News reported, California campaign finance regulators “could, if they wanted to, investigate whether the behested payments to the California Partners Project cross the line into providing a personal benefit to the governor.”
Will anything be done? Will Newsom be allowed to continue to solicit “donations” from California companies? With so-called “behested payments” in the national spotlight, maybe change will finally come, as anyone outside California can easily see how such a system could lead to broad corruption.