By CUNEYT DIL | The Associated Press
SACRAMENTO – Firms 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 to keep small businesses afloat during the coronavirus pandemic , showed records released Monday.
Northern California winery and hotel company PlumpJack, founded and partially owned by Newsom, received a loan worth $ 150,000 to $ 350,000 from the Paycheck Protection Program, according to data released by the U.S. Treasury Department.
Before taking office as governor in 2019, Newsom announced that he would step down from his businesses and place 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 to qualify for the help. Federal data shows the loan saved 14 jobs.
A labor consulting 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 state’s most recent public disclosure forms, indicating that she had earned income in excess of $ 100,000. The loan saved 365 jobs at the company, according to the data.
A consulting firm founded and run by Jennifer LeSar, 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 clients from California cities and housing groups 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 calls himself 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. But he added that transparency still matters.
“Anytime federal money goes to companies owned by public servants, the public should know about 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 on payroll, rent and similar expenses. Companies generally need to have fewer than 500 workers to qualify.
The public may never know the identities of more than 80% of the nearly 5 million recipients to date, as the Trump administration has refused to release details of loans under $ 150,000 received by the great majority of borrowers.
This secrecy sparked legal action by a group of news organizations, including the Associated Press. Yet the release of the data is the most comprehensive look at the recipients of the program to date.
Records show that more than 87,000 businesses in California 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 to establish it as 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 how much Newsom derives from the five companies in PlumpJack’s portfolio. For 2019, Newsom reported on annual financial disclosure forms from states reporting at least $ 200,000.