Tech companies spend millions on California political gifts
Gov. Gavin Newsom solicited donations totaling nearly $227 million from Facebook, Google, Blue Shield and other private California companies and organizations to combat the coronavirus pandemic and help run parts of his administration, according to a report Thursday by the state's political watchdog agency.
“Behested payments” are contributions solicited by an elected official to be given to another individual or organization. They are less regulated than campaign contributions and grew 10-fold from 2019, Newsom’s first year in office, and 2020, when the pandemic arrived.
Facebook contributed nearly $27 million to the Democratic governor’s causes, mostly for gift cards to nursing home workers. Blue Shield of California gave $20 million toward homeless programs. Those companies were the two top donors, said the Fair Political Practices Commission, which oversees and enforces California’s campaign finance and political ethics laws.
Listed beneficiaries include the governor’s office for $42.5 million and the Governor’s Office of Emergency Services for $26 million. There was also money supporting California’s Alzheimer’s Task Force, Newsom’s California Climate Action Corps initiatives, a California Climate Day of Action, and consulting services for the administration’s Master Plan for Aging.
While California limits the amount of gifts and campaign contributions to politicians, there are no limits on behested payments. They are reportable only if they are made at the suggestion of a public official to someone else for a legislative, governmental or charitable purpose, and only if payments from a single source reach $5,000 in a calendar year.
“Unprecedented times, call for an unprecedented response,” Newsom spokesperson Daniel Lopez said in a statement.
He said the governor “has been committed to utilizing the innovative spirit of our private sector” and is “leveraging that strength to help improve the lives of all Californians.”
There is no suggestion that Newsom or his donors acted improperly. But critics say that while the payments don’t directly benefit the politician, they can indirectly curry favor.
For instance, former Gov. Jerry Brown repeatedly sought contributions from casinos, labor unions, wineries, insurers and major corporations to benefit the Oakland Military Institute charter school he founded in 2001 when he was mayor of the city.
Despite the nature of such behested payments, Lopez said hundreds of companies including Facebook and Blue Shield reached out to the governor's office, not the other way around.
Campaign watchdogs fall into two camps on behested payments, said Loyola Law School professor Jessica Levinson, former president of the Los Angeles Ethics Commission.
Some believe such contributions “are the devil’s work, and they’re clearly a loophole around contribution limits and people just give them to curry favor with elected officials,” she said.
She tends to fall into the second camp, that money will inevitably flow through politics and would otherwise go to campaign accounts or independent expenditure committees.
“So if people are going to try and curry favor with elected officials, which they will, then let’s at least have that money go to a good cause,” she said.
She said the big issue is having the payments be transparently disclosed, so voters can make informed decisions on the donations and outcome.
“Not every behested payment is nefarious, but every behested payment deserves scrutiny,” said Jonathan Mehta Stein, executive director at the good government group California Common Cause. “And the explosion of behested payments recently certainly creates a perception among the public that corporations and players in state politics are using this as an avenue to get around our pay-to-play rules.”
Blue Shield and Facebook, now Meta, each said they were proud to help Californians during an unprecedented pandemic.
Aside from the governor, behested payments can be be made on behalf of numerous local and state officials, including lawmakers and statewide officeholders.
Several other states including Alabama, Florida, Hawaii, Maryland, New Mexico and New York limit or prohibit such solicitations to benefit third parties, according to California's ethics panel.
Newsom mentioned some of his contributors in his near-daily news conferences in the early stages of the pandemic, providing publicity for some donors.
Ethics commission spokesman Jay Wierenga said requests for donations can take various forms and don’t have to come from the governor himself. They could begin with a casual request by a governor's aide at an event or with a formal solicitation letter, and the nature of that request doesn’t have to be disclosed, just the result.
Payments made at Brown’s request topped out at less than $11 million in 2018, his last year in office, and Newsom’s at about $12 million in 2019 when he took over and sought money to pay for his inauguration festivities and various governor’s task forces.
Newsom kicked such donations into an entirely new gear in 2020.
In 2019 there was one contribution topping $1 million. The next year there were 50. Contributions between $500,000 and $1 million jumped from three to 18.
The soaring use shows “the continued importance of transparency in making sure our elected officials are accountable for the vast amounts being raised, even if they are going for very worthwhile efforts,” said commission Chairman Richard Miadich.
So the commission now requires officials to disclose any ties they may have to a non-profit receiving the money, and if the person making the payment is involved in a proceeding before the official’s agency.
That increased disclosure is a good step, said Mehta Stein, but he said the Legislature should flatly prohibit solicitations that benefit an office-holder's spouse or other relative.
Among other donors, Google gave $10 million toward California’s COVID-19 public health awareness campaign, while Fox, YouTube, TikTok, Twitter, Snapchat, Spotify, Netflix, Pandora, Comcast, ABC and NBC were among those contributing lesser amounts.
Blue Shield’s $20 million went to support Project Homekey, Newsom’s program to use vacant hotels, motels and other unused properties as permanent supportive housing for residents without a place to live.
Tens of millions more from Kaiser Foundation, IKEA US Community Foundation, the Chan Zuckerberg Initiative and individual donors Reed Hastings and Tom Steyer all went to California’s COVID-19 Response fund.