On Monday, the US Treasury Department released data showing that a company tied to Governor Gavin Newsom received a federal COVID-19 relief loan ranging anywhere from $150,000 to $350,000.
$150,000 to $350,000 in loans
According to the US Treasury, PlumpJack, a San Francisco-based winery and hotel company founded and partially owned by Governor Newsom since 1992, received the loan from the Paycheck Protection Program (PPP). The PPP, a government program that gives business loans that don’t have to be paid back if they are used to pay employees, rent, and other business-related expenses, is aimed at helping small businesses with less than 500 employees.
The US Treasury confirmed Monday that the loan was directly responsible for saving at least 14 jobs at PlumpJack businesses.
As a prerequisite for being Governor, Governor Newsom had to relinquish control of PlumpJack and other businesses in early 2019, installing a lawyer to run the company for him in his absence.
Governor Newsom claimed on Monday to have no knowledge over why the loan was taken.
“You would have to ask the people that are running those businesses,” explained Newsom in a press conference.
“Any business would have done this”
However, financial experts found that there was no wrongdoing at PlumpJack.
“Any business would have done this,” noted financial advisor Stanley Berg in an e-mail to the California Globe. “A lot of small businesses have been hurt by this, especially hotels and wineries, which were closed or had to go to greatly reduced capacity during the state shutdown.
“Yes, Newsom does still have a hand in this, but no more than Donald Trump has in his own company now. Essentially, the person who Newsom chose to run PlumpJack made a financial move to help keep all the businesses stay afloat. The company got roughly $250,000, and that money went right back into paying the rent and employees like any other company now.
“Newsom could have forwarded some money through, but the same could be said of any other wealthy business owner who also qualified for these loans and took them.
“It’s a smart move and it really helps with a lot of lost revenue during the past several months.
“The gist of it is that there was no wrongdoing, and the company would have gotten the loan with or without Newsom.”
PlumpJack wineries remain open while others close due to new restrictions
Critics have largely pointed to other concerning areas surrounding Governor Newsom’s PlumpJack businesses, such as how his Madera County winery has managed to stay open during the pandemic while most others in the Napa and Sonoma areas have had to close due to new coronavirus measures announced last week.
“This is more a mystery,” added Berg. “Even though Madera stayed open as a county, Newsom didn’t call for his winery to shut down to lead by example. Madera County has also stayed open despite hundreds of active cases and new cases being reported every day. For example, Napa County is closing down despite only recording only a dozen new cases in a day, which is about par with Madera.
“It’s odd that the pieces fell this way.”
As of Tuesday, Madera County is due to remain open.
Despite leaving the reigns of the company last year, Governor Newsom also reported making over $200,000 through PlumpJack in 2019 showing that while he no longer has control of the company while in office he remains a beneficiary.