Several companies partially-owned by Gavin Newsom got millions in COVID relief funds

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Several companies in which California Gov. Gavin Newsom (D) is a part-owner have received a total of nearly $3 million in taxpayer-funded COVID-19 relief money, according to a local media investigation.

KGO reported that data released by the Small Business Administration earlier this year noted that the PlumpJack Group got as much as $350,000 worth of Paycheck Protection Program (PPP) loans.

But PlumpJack businesses, which include bars, restaurants, and wineries, got almost eight times that amount, or nearly $3 million.

Newsom, the report continued, put his ownership interests in the PlumpJack Group into a blind trust in 2018, meaning he technically wouldn’t have any knowledge of or role in the business decisions made by the company while he’s in office.

And the report is not alleging that Newsom had any role in the businesses securing the PPP funding. But KGO did note that, according to the PlumpJack Management Group website, Newsom’s sister, Hilary Newsom, is listed as the company’s president and a partner.

Also, the KGO investigative team found discrepancies between the company’s SBA information and records that are publicly available “that appear to raise questions about how much money some companies received under the program,” the outlet reported.

An analysis by KGO found that at least nine companies linked to the PlumpJack Group managed to obtain PPP loans, eight of which are linked to Gov. Newsom, a Democrat.

One of the companies — Villa Encinal Partners Limited Partnership — is tied to the PlumpJack winery in Napa Valley, where San Francisco-based billionaire Gordon Getty is an investor.

The SBA data says that the company managed to secure a PPP loan for $918,720 on April 14. KGO explains further:

In order for the loan to be forgiven, the SBA requires at least 60 percent be used to cover their wages. Based on SBA’s data, Villa Encinal Partners LP retained 14 employees. Hypothetically, if divided equally, each of them would’ve received around $40,000 to cover their payroll over a period of three months – that would amount to an annual salary of around $160,000 per employee.

“It’s unexpected for a 14 employee organization to get nearly $1 million,” Sean Moulton, a senior policy analyst with Project on Government Oversight (POGO), where he tracks PPP funds, told KGO.

“The purpose behind this program was to save entry-level jobs, people going in and working for that paycheck. That was what we put this out there for, to stop unemployment,” he added.

On average, PPP loans for small businesses in California who retained 14 employees was about $128,000. But PlumpJack-linked Villa Encinal Partners Limited Partnership got more than seven times that amount.

According to the outlet’s SBA analysis, the only other winery in California that received a similar PPP loan amount was Oak Knoll Farming Corp. — but that company kept 79 employees, or more than five times as many as Villa.

The Millbrae Pancake House received a $431,400 PPP loan for retaining 53 employees, or less than half of what Villa got.

“That seems unfair because there are small family businesses like ours that need that money,” Erin Burke, owner of the restaurant, told KGO.

Despite the loan, she was forced to shutter the family-owned business of 60 years on Nov. 29.

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“We’re just trying to do the best that we can and survive,” she said. “That money wasn’t enough.”

Another company tied to PlumpJack, Balboa Cafe Partners LP, got a $506,799 loan on April 29. According to a commercial data firm in June, the business had an estimated seven employees, but according to its SBA loan application, the firm claims to have retained 55 workers.

The revelations come as Newsom has implemented new COVID-19 restrictions on bars, restaurants, and other eateries — and as many owners beg the government to get out of the way so they can operate safely, after spending thousands of dollars over the summer to do so.

One of them — Angela Marsden, owner of the Pineapple Hill Saloon & Grill in Sherman Oaks, in Los Angeles — pleaded for help in a tearful video after highlighting the hypocrisy of forcing her to close her outdoor patio to dining while the city allows a movie set 50 feet across the street to feed workers in a very similar environment.

“They have not given us money and they have shut us down. We cannot survive, my staff cannot survive,” she said.

Jon Dougherty

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