California Gov. Gavin Newsom is facing new allegations of shady behavior as an investigative report finds companies linked to him collected millions of dollars in coronavirus relief money.
The numbers are unprecedented.
Much of the money collected was far more than what other companies received from that same financial relief program.
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ABC7, a TV station in San Francisco, says a collection of at least eight companies owned by PlumpJack Group – which is partially owned by Newsom – received nearly $3 million from the Paycheck Protection Program.
The Paycheck Protection Program is a federal program that gives loans to small businesses to keep workers on the payroll amid the coronavirus shutdowns – money that in many cases does not have to be repaid if the companies meet certain standards regarding employee retention.
Initial data from the Small Business Administration suggested PlumpJack Group companies collected $350,000 from the Paycheck Protection Program.
But the ABC7 investigation found the businesses received far more.
One company alone… a winery owned by PlumpJack with just 14 employees… collected a whopping $918,720. That’s seven times the average in California for companies with 14 employees, the station reported, adding that the typical California winery to collect $900,000 in Paycheck Protection funds, by comparison, had 148 workers.
A Newsom spokesperson told ABC7 his PlumpJack ownership is in a blind trust, giving him no knowledge or involvement in its operations and decisions – but the station noted his sister is the company’s president.
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The owners of struggling businesses were livid over the news.
“It seems as if a lot of the large companies were being taken care of by the banks first and the small guys like me were kind of left on the sidelines,” comic shop owner Joe Field told the station. Field called his attempts to get the funds for his own workers a “miserable process” in which he spent 90 days dealing with four banks to ultimately get a $40,000 loan.
The Associated Press said the loan to Newsom’s firms were much larger than those given to other businesses.
“It seems to be a small business, but it got a lot of money,” Sean Moulton, analysts with the nonpartisan Project On Government Oversight, told the news agency. “I’m not sure how the company justifies taking that much money when there were a lot of companies looking to get assistance.”
Moulton said a big payment to one business could leave another one struggling, or worse.
“You hope they’re using it wisely because there’s an opportunity cost there — that money didn’t get used for another small business that may be out of business now,” Moulton said.
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The news comes just weeks after it was revealed that Newsom failed to follow his own COVID-19 protocols as he dined out in a swank Napa Valley restaurant.
The Washington Examiner notes that the Newsom scandal is part of a far larger problem with the Paycheck Protection Program.
Massachusetts Institute of Technology economist David Autor told the newspaper that the program has spent a lot of money… for only minimal results.
Taxpayers shelled out $224,000 for each job “protected” under the program.
“It seems that a lot of [the] cash went to businesses that would have otherwise maintained relatively similar employment levels,” he was quoted as saying.
Now, Newsom could become the poster boy for these scandals… something that won’t help him amid a growing effort to launch a recall against him over his mishandling of the pandemic shutdowns.
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Politico reports that his team is worried the recall effort “could mushroom into a major threat in 2021.”
David McCuan, a professor of political science at Sonoma State the Political that Newson’s team has “fanned the flames against themselves with self-inflicted wounds.”
That was before this new scandal broke – and this could turn out to be the deepest self-inflicted cut of all.
— Walter W. Murray is a reporter for The Horn News. He is an outspoken conservative and a survival expert.