Virus Outbreak California

California Gov. Gavin Newsom updates the state's response to the coronavirus, at the Governor's Office of Emergency Services in Rancho Cordova Calif., Tuesday, March 17, 2020.

(The Center Square) – A Republican state lawmaker is calling for an investigation into California Gov. Gavin Newsom after a CapRadio investigation found the state awarded no-bid contracts to at least half a dozen companies that made substantial contributions to Newsom’s campaign during the state’s COVID-19 shutdown.

Assemblyman Kevin Kiley, R-Rocklin, who sued the governor last year over his executive orders and is waiting to hear the ruling from the court of appeals, is calling on the legislature to investigate the governor, who also faces a potential recall election.

The official recall campaign against Newsom says it has gathered more than 1,689,000 signatures, above the 1.495 million it needed.

In CapRadio’s report, it said it uncovered an “overlap of at least a half-dozen companies that made substantial contributions to Newsom and received no-bid contracts from the state, influential appointments, or other opportunities related to the state’s pandemic response.”

It also found, “The contributions range from tens of thousands to hundreds of thousands of dollars. The contracts range from $2 million to over $1 billion – including the one awarded to Blue Shield for vaccine distribution ... worth up to $15 million.”

Newsom’s office says the governor had to work quickly to acquire equipment, and political contributions did not factor into the decision.

“The Governor’s Administration made the decision to enter into all contracts related to the COVID-19 response based on the best interests of the state and protecting health and welfare of all our residents,” Erin Mellon, spokesperson for the governor, said in a statement.

The list of major Newsom donors who received no-bid contracts or other opportunities during the state’s shutdown, according to CapRadio, include, among others:

  • BYD, which contributed $40,000, received a no-bid contract totaling over $1 billion
  • UnitedHealth, which contributed over $200,000 since 2018, and its subsidiary received multiple no-bid contracts totaling over $400 million
  • Blue Shield of California, which contributed over $300,000 since 2018, received a $15 million no-bid contract
  • Bloom Energy, which contributed nearly $100,000 since 2018, received a $2 million no-bid contract.

“This report highlights a concerning trend of the Newsom administration taking actions under the color of emergency powers that result in major benefits to California's most politically active special interest groups,” Kiley said. “Similarly, despite a consensus among health experts that schools should be open, Newsom has deferred to the preference of the California Teachers Association and imposed the nation's most severe school closures."

Kiley said that Newsom repeatedly using “extraordinary emergency powers to reward special interest allies” has cost millions of Californians dearly. “It's hard to imagine a worse betrayal of the public trust," he added.

Kiley is calling for more legislative oversight over the no-bid contract process, including an immediate investigation of the communications among the governor, his staff, and the vendors who received no-bid contracts or other benefits, information on vendors filling these contracts and the selection process for vendor contracts and the terms associated with them.

To improve transparency, the state created a website that lists state contracts related to COVID-19 responses costing $250,000 or more. Of the more than 100 contracts listed – many were awarded with limited or no competitive bidding. CapRadio found the vast majority of companies on the list did not make major contributions to Newsom’s campaign.

However, the optics don’t look good, Bob Stern, former general counsel to the California Fair Political Practices Commission and principal co-author of the state’s Political Reform Act, told Jefferson Public Radio.

“I really think that the governor has a tin ear in terms of receiving huge campaign contributions and providing sole-source contracts for corporations that were giving him these contributions,” Stern said.

Orrin Heatlie, the leader of the Recall Gavin 2020 campaign, said, “During the past several days, thousands of volunteers have hit the streets to help collect tens of thousands of additional signatures to force Governor Newsom into a recall campaign. The people are being heard loud and clear.”

The campaign has set an internal deadline of March 10 to have all the petitions collected. The official deadline to complete the signature gathering is March 17.

Stern says Newsom was likely aware of the sizable contributions coming from UnitedHealth and other companies, although the governor’s office denies any wrongdoing.

“If anybody gives [him] $100,000, the governor knows it – probably $20,000, the governor knows it,” Stern said. “You'll probably find thank you notes being sent out and maybe even phone calls from the governor.”

Newsom’s office claims the contributions his donors made had no impact on the contracts they received.