Newsom putting businesses in blind trust
Gov.-elect Gavin Newsom will separate himself from his wine and entertainment empire when he becomes governor next month, placing the businesses in a blind trust run by a family friend.
Newsom “is in the process of transferring title to and control of the businesses he founded to a blind trust, a step that goes beyond anything required by law,” Nathan Click, a spokesman for the governor-elect, said in a statement.
What the former San Francisco mayor won’t do, though, is sell the bars, liquor stores, hotels and restaurants he and his partners have built up under the PlumpJack label, starting with the wine shop he opened on San Francisco’s Fillmore Street in 1992.
When he became mayor in 2004, Newsom sold his share of the businesses he owned in the city to his partner and family friend, Gordon Getty, for $1.7 million, but kept control of the assets outside the city. He bought his share of the company back from Getty after he was elected lieutenant governor in 2010.
The value of the company has grown significantly since then, and Newsom is unwilling to go through another sale and possible repurchase. According to their 2016 tax returns, Newsom and his wife, Jennifer Siebel Newsom, earned more than $900,000 from their stake in companies they owned.
“These are my babies, my life, my family,” Newsom told reporters during a campaign bus trip this year. “I can’t do that. I can’t sell them.”
Instead, Newsom will move his entire PlumpJack holdings, along with any other businesses he owns all or in part, into the blind trust that will be run by Shyla Hendrickson as Newsom’s trustee.
Hendrickson is an attorney and accountant with more than 20 years of experience in investment management. While she is a longtime family friend, she has had no role in Newsom’s investments or PlumpJack’s business management, Click said.
“She will be forbidden from discussing any assets or sharing business information with Newsom, his representatives or the public, unless required by law,” Click said. “She will also be empowered to make any decision regarding the assets, up to and including the sale of business ownership, without consulting with Newsom or his representatives.”
But if she doesn’t decide to sell the company, the PlumpJack businesses, which are now run by his sister, Hilary Newsom, will be there for Newsom when he leaves office.
Conscious of the problems and disputes that President Trump has run into with his own attempt to put his hotels, resorts and other business interests into a blind trust, Newsom intends to go further than the president in separating himself from his companies.
Newsom will issue “an executive order prohibiting state executive branch agencies from doing business with PlumpJack entities,” Click said. “He will also divest from all common stock that he owns in publicly traded companies.”
Newsom also promised to continue his practice of releasing his tax returns, something he has done at least since he was elected lieutenant governor.
“He will be the first governor in the history of California to release his tax returns every year, just as he has done as a candidate,” Click said.
Gov. Jerry Brown has declined to release his tax returns during his years as governor, putting out only the statement of economic interests required of every California public official.