California governor Gavin Newsom (D) has praised President Biden for stepping in to backstop depositors at Silicon Valley Bank, but the governor hasn’t shared that he has a personal stake in the bailout.
Newsom owns three wineries that are listed as clients of the bank, The Intercept reported.
The bank also has donated to a woke non-profit founded by Newsom’s wife Jennifer Siebel Newsom.
Democrat implicated in bank crisis
Since SVB’s rapid collapse last week, many have blamed the bank’s managers for being preoccupied with “woke” politics rather than making sound investments.
It turns out that SVB’s woke agenda led the bank to donate $100,000 to a leftist non-profit managed by Newsom’s wife called California Partners Project (CPP). Most of the money, which was solicited by Newsom himself, went to supporting “gender equity.”
The founder of SVB’s investment banking arm, John China, is also a founding board member at CPP.
Newsom’s wineries CADE, Odette, and PlumpJack, are also listed as clients of SVB, which is now under the control of the Federal Deposit Insurance Corporation (FDIC).
A former employee of Newsom’s also told the Intercept that Newsom had a personal account at SVB for “years,” but the governor has downplayed his ties to the bank.
“Governor Newsom’s business and financial holdings are held and managed by a blind trust, as they have been since he was first elected governor in 2018,” Nathan Click, a spokesperson for Newsom, told The Intercept in an email.
Conflict of interest
The bank’s failure last week, the second largest in U.S. history, triggered fears of a domino effect, prompting Biden to step in.
The president — avoiding use of the term “bailout” — has pledged to save all depositors at the bank, most of whom had balances larger than the federally insured amount of $250,000.
So far, Newsom has not mentioned his conflict of interest in his public statements on the bank crisis.
As SVB’s collapse began to cause panic over the weekend, Newsom said he was “in touch with the highest levels of leadership at the White House and Treasury.”
The governor later praised Biden for taking action to “strengthen public confidence in our banking system” and ensure that small businesses and non-profits can stay operating.