SVB Client Gavin Newsom Praises Biden For Bank Bailout
Friday, March 17, 2023
California Governor Gavin Newsom recently praised the Biden administration for their quick action to bail out Silicon Valley Bank (SVB), failing to disclose that he and his private companies are clients of the bank.
Three of Newsom’s upscale wineries, CADE, Odette, and PlumpJack, were identified as clients of SVB’s global assets library. Newsom’s personal accounts were also found to have been with SVB for several years.
“The Biden Administration has acted swiftly and decisively to protect the American economy and strengthen public confidence in our banking system,” Newsom said in a Sunday statement.
Newsom hailed the Silicon Valley Bank bailout, but did not point out his own business with the institution: Reporthttps://t.co/qjucjU15T7
— Larry Elder (@larryelder) March 15, 2023
Although Newsom’s spokesperson has stated that his business and financial holdings are managed by a blind trust, this trust permits Newsom’s sister to serve as the president of his PlumpJack Group.
It is worth noting that Newsom’s wife also has close ties to SVB. The bank had given $100,000 to a charity founded by Newsom’s wife, and SVB’s president was a founding member of the charity’s board of directors.
SVB’s collapse last week was the second-largest bank failure in US history, and it marked the largest collapse since the 2008 financial crisis.
The government-backed deposits in order to prevent contagion to other banks and to protect the many major and small businesses that were clients of SVB.
Newsom’s net worth is estimated to be between $18-22 million, largely from his businesses and real estate holdings.
Governor @GavinNewsom issues statement on Silicon Valley Bank. pic.twitter.com/ZiJgI3VtgN
— Office of the Governor of California (@CAgovernor) March 11, 2023
He has expressed strong personal attachment to his ventures, saying in 2018 that he could not sell them during his gubernatorial race because they are his “babies, life, and family.” Nonetheless, his failure to disclose his ties to SVB while praising the bailout has raised questions about conflicts of interest.
Last week’s collapse of SVB was the second-largest bank failure in US history, and the biggest since the 2008 financial crisis when federal regulators seized Washington Mutual. The government’s decision to back deposits was due to concerns about the potential contagion to other banks and the impact on major and small businesses that were SVB clients.