California Governor Gavin Newsom (D) has some big-time explaining to do.
According to an investigative report by RedState’s Jennifer Van Laar, Newsom may have violated the law in the acquisition of his current $3.7 million home.
Doesn’t add up
Just before being sworn-in, back in January of 2019, Newsom claimed that he and his family would be moving into the Governor’s Mansion in Sacramento. That didn’t last long…
Instead, a multimillion-dollar home in Fair Oaks appears to have been purchased in December by an LLC registered to his cousin, Jeremy Scherer, for the Newsoms, who moved in after renovations were completed a few months later. When questioned by reporters, Newsom’s spokesperson explained that the Newsom family purchased the property with cash through the LLC.
It is not unusual for high profile individuals to form an LLC — limited liability corporation — for the purposes of purchasing property. But, there is a lot more to this story, starting with the fact that, according to RedState, Scherer’s name is the only one listed on documentation pertaining to this company — Newsom wasn’t listed as a member.
If at some point Newsom became the manager or a member, he would have had to disclose this — as well as all LLC assets — and he hasn’t, RedState reports.
This is important, as RedState reports, because “with that knowledge, the Grant Deed giving the Newsoms title to the Fair Oaks property is evaluated in an entirely different light – it’s now a gift, according to corporate law attorneys RedState spoke to about the transaction.”
If the property was a gift from the LLC, then Newsom, as an elected official, would have been forced to disclose the gift. He has not, according to RedState’s reporting. The obvious reason would be that the gift was way in excess of the legal $500 a year gift limit.
On top of this, when Newsom moved into the Fair Oaks home, the deed, according to RedState, was transferred to the Newsom family, and he managed to get the $4,000 Documentary Transfer Tax waived. As RedState reported:
Since it was falsely represented to Sacramento County officials that the Grant Deed from the LLC to the Newsoms was a transfer from an LLC to a member, Newsom unjustifiably got out of paying the $4,087 Documentary Transfer Tax.
And then, roughly a year later, in January 2020, Newsom took out a tax-free $2.695 million cash-out mortgage. Again, RedState reports that he did not disclose any of this on financial disclosure forms.
Wouldn’t be the first time
There are plenty of reasons to support the conclusion that Newsom is engaging in some shady practices here. And, there is no reason to give him the benefit of the doubt, because he has been caught before. Back in the early 2000s, Newsom was called out for failing to disclose $11 million in loans obtained while he was an elected official, including $2.1 million loaned from family friend Gordon Getty to purchase two homes in Pacific Heights.
This is a developing story. Read the full report from RedState here.