Companies That Donated To Gov. Gavin Newsom To Help With Coronavirus Were Rewarded With No-Bid State Contracts

Individuals and businesses who made donations at Gov. Gavin Newsom’s (D-CA) request were rewarded with state contracts.

The requests are known as “behested payments,” donations made to organizations at the request of a politician. In California, Newsom rewarded those who made donations at his request with lucrative state contracts. Reason reported this week that the behested payments “were a record-setting haul eclipsing all prior donations on record by nearly $100 million.”

“While most donations supported COVID-19 relief efforts, a closer look suggests Newsom’s fundraising was supercharged not just by the pandemic, but also by the broad emergency powers the Democratic governor has assumed because of it,” the outlet continued.

For example, Newsom raised $45 million last year from insurance companies Blue Shield of California and Kaiser Permanente toward his housing initiative, Project Homekey. Newsom appointed Paul Markovich, Blue Shield’s CEO, to co-chair the governor’s COVID-19 testing task force. In addition, Blue Shield, with some help from Kaiser Permanente, were awarded state contracts to manage vaccine distribution.

“That decision has raised eyebrows as the governor’s office has remained silent about the particulars of the deal, including why his administration selected Blue Shield and how much the company would be paid,” Reason reported. More from the outlet:

But Blue Shield and Kaiser Permanente aren’t alone. Newsom has committed to spending nearly $4 billion on no-bid contracts to fight the pandemic. A number of companies who lined up for these contracts ended up donating, at Newsom’s request, to his various relief efforts.

Since March, Verily Life Sciences has received up to $44 million in three different contracts to help operate COVID-19 testing sites. Verily falls under the same parent company as Google, and in April, Google donated $7 million in ad credits to the governor’s COVID-19 ad campaign. That same month, Verily registered to lobby the governor’s office. Similarly, AT&T received over $40 million in contracts from the Office of Emergency Services. They donated $310,000 to the governor’s office and spent millions more lobbying the state last year. Other donor-contractors include McKinsey & Company and advertising firm Runyon Saltzman.

Behest payments have come under fire in California before, with the Los Angeles City Council debating a measure to ban them, The Los Angeles Times editorial board endorsed.

“The growth in behested payments has tracked closely with the centralization of political power during the pandemic. While Newsom raised $226 million in 2020, he only raised $12 million the year before. That spike is unique to Newsom. Behested payments to state legislators and other officials were down in 2020. Even if you exclude payments that explicitly mention COVID-19 and related programs, such as Project Homekey, Newsom still raised $8 million more than he did in 2019, a nearly 70 percent increase,” Reason reported.

Much of the anger regarding perceived preference centers around California’s TV and movie industry, which was allowed to operate while small businesses were shut down. The entertainment industry appears to have received preferential treatment after aggressively lobbying Newsom, something individual small businesses couldn’t do.

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