Price tag in Newsom recall battle starting to grow

An effort to recall Democratic Gov. Gavin Newsom has not even reached the ballot, but foes and backers of the governor already have raised or spent about $7.5 million, with the likelihood of much, much more to come.

Newsom’s committee fighting the recall has raised a healthy $3,1 million, while the two main fundraising arms of the recall effort, the California Patriot Coalition (CPC) and Rescue California (RC) have raised $2.3  million and $2.1 million, respectively, according to financial disclosure documents on file with the state’s elections officer.

The fundraising is a work in progress but all but certain to expand exponentially if, as expected, the effort makes the ballot and an election is held later this year. Apart from the recall, Newsom is up for reelection anyway in 2022.

No major contender has yet stepped up, and those who have announced their candidacy, such as former San Diego Mayor Kevin Faulconer, a Republican, have yet to gain traction.

As a sitting governor, Newsom has an edge in fundraising, although there are caveats. Groups that have been formed to support or oppose the recall are not subject to donation limits. But candidates who hope to replace him do face limits of $32,400, while Newsom’s direct donations are not limited. 

While Newsom appears safe in Democrat-controlled California, (President Biden won the state by the largest margin since Lyndon Johnson), the fact the CPC and RC are competitively fundraising show that the recall effort may have legs, although it appears dominated by the far right – at least so far.

No major contender has yet stepped up, and those who have announced their candidacy, such as former San Diego Mayor Kevin Faulconer, a Republican, have yet to gain traction. Adult film actress Mary Carey said she is entering the race, while Caitlyn Jenner, a transgender rights activist and reality TV performer who has publicly endorsed the recall, reportedly is getting close to formally announcing her candidacy.

Thus far, Newsom is backed by about 56 percent of the electorate, with 5 percent undecided. — PPIC

The current recall attempt is reminiscent of the 2003 campaigns to oust then-Gov. Gray Davis, who had been targeted for his prolific fundraising and his handling of the electricity crisis. The earlier effort drew 135 candidates — including celebrities, entrepreneurs and politicians. Hollywood personality Arnold Schwarzenegger, a Republican, ultimately replaced the Democrat Davis. Davis was the first California governor to be recalled, and only the second governor in the nation to be ousted.

Going in to the fall, the governor could potentially face better-financed opponents, but that may depend largely on his poll numbers. Thus far, Newsom is backed by about 56 percent of the electorate, with 5 percent undecided, according to a survey two weeks ago by the Public Policy Institute of California. About four in 10 of those surveyed said they would vote to recall Newsom.

Here are some of the significant contributions behind the recall election:

Against the recall
—California Democratic Party

Donations: $612,555

It’s easy to dismiss the CDP’s donations to the anti-recall effort just as a political party sticking by one of its own. But a victory for the recall effort would be the California Democratic Party’s nightmare scenario. 

Even if the chances of Gov. Newsom’s ouster in the Gray Davis fashion are slim to none, it would signal a remarkable shift from the post 2018 political environment where Democrats held practically uncontested control over California politics that was since shaken by their underperformance in 2020 House races. 

—Kelly and Carla Kimball
Donations: $100,000

Kelly Kimball in a Malibu-based entrepreneur and  the Executive Chairman of Vitu, a technology company that works with the motor vehicle departments in multiple states to electronically process vehicle registrations and other transactions. Kimball and his wife Carla are a mixed bag when it comes to campaign finance, donating hundreds of thousands of dollars to mostly Democrats, but also Republican candidates like Montana U.S. Sen. Steve Daines.

–Professional Engineers in California Government
Donations: $250,000

PECG is a union and advocacy group that represents around “13,000 state-employed engineers and related professionals.” In the past, the group has been central to efforts fighting against the furlough of state employees, which included a 2008 lawsuit against Schwarzenegger to block his cost-cutting measures. Their support could be an encouraging sign for Gov Newsom, being  “a harbinger of more labor money to come.”

–Stewart and Lynda Resnick
Donations to Anti-Recall: $250,000

The Resnicks are best known for their involvement with The Wonderful Co., which is the parent company to brands like POM Wonderful, FIJI Water, and Wonderful Pistachios. They both have prolific records as Democratic mega donors going back at least to the early 2000s.

Supporting the recall
–Proverbs 3:9, LLC

Donations to CPC: $213,600

Donations to RC: $500,000

By far the biggest donor to both the California Patriot Coalition and Rescue California, Proverbs 3:9, LLC gained notoriety back in January when former FEC commissioner Ann Ravel petitioned the California Secretary of State to investigate it as a potential “dark money scheme.” A day after Ravel’s petition, John Kruger, an Orange County investor who opposes restrictions on worship, released a statement claiming responsibility for the donations.

–California Republican Party
Dnations to CPC: $0

Donations to RC: $185,370

It’s not hard to see why the California Republican Party would like to see Newsom recalled. For one thing, California’s congressional races are notoriously competitive, so even if there’s no realistic chance of ousting the governor, forcing Democrats to divert resources to the governor’s race could improve the chances for down-ballot Republican candidates. 

–Geoff Palmer
Donations to CPC: $200,000

Donations to RC: $200,000

Palmer is a Los Angeles based real estate developer and prolific Republican megadonor. In 2020, he gave more than $6.4 million to groups associated with President Trump or other Republican candidates. Despite the former President’s decisive defeat, it seems that Palmer is looking to continue to wield influence by substantially assisting the recall effort.

–Chamath Palihapitiya
Donations to CPC: $100,000

Donations to RC: $100,000

Palihapitiya’s name will be immediately familiar to anyone involved with Silicon Valley and California investment circles. The 44 year old billionaire venture capitalist was one of the earliest Facebook executives, and his firm, Social Capital, continues to invest in companies like Slack, Tesla, and Amazon.

–DGB Ranch
Donations to CPC: $150,000

Donations to RC: $150,000

If Proverbs 3:9, LLC is the recall effort’s biggest donor, DGB Ranch is easily the most mysterious – so far. It’s not a registered business in the California Secretary of State’s databases, and putting together a detailed profile is a daunting task. Paperwork from Rescue California and Jose Gardea’s 2013 bid for Los Angeles City Council show that DGB Ranch has a 90004 zip code, placing it decidedly in central Los Angeles, not exactly the traditional place for a ranch. 

David G. Berdakin, an Oakwood-based developer, is described as being behind the contributions, although the evidence is far from conclusive. In the Gardea campaign, disclosure reports show that he donated on the same day as DGB Ranch donated, and Berdakin shares the same zip code. He also shares a 2013 patent with Chamath Palihapitiya, another major donor to the recall effort. When Capitol Weekly sought to discuss these issues, Berdakin declined to comment.

–Huck PAC
Donations to CPC: $75,000

Donations to RC: $100,000

The Huck PAC was founded in 2008 by former Arkansas Governor Mike Huckabee to fund his Presidential bid. Since then, it’s evolved in to a more general fundraising organization which seeks to “promote conservative principles and help elect conservative candidates at every level of government.” The 2019-2020 election cycle was its biggest on record, donating a total of $1,867,800 to hundreds of Republican house candidates. Huck PAC’s donations in 2020, even to statewide candidates, never exceeded more than $10,000. The increase in donation size appears to indicate that the organization, and perhaps other conservative fundraisers, take the recall effort seriously.
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Editor’s Note: James Aranguren is a Capitol Weekly intern from the University of Southern California.