California governor Gavin Newsom (D.) helped persuade President Joe Biden to bail out Silicon Valley Bank and was one of the first politicians to praise the move. His assistance comes years after the failed bank began lobbying California's government and donating to Newsom's wife.
Newsom helped convince Biden during a Saturday meeting that a bailout was necessary. In 2021, Silicon Valley Bank quietly gave $100,000 to Jennifer Siebel Newsom's California Partners Project as it was gearing up to lobby the state's university, pension, and teachers' retirement systems. The gift was the California's bank's largest contribution to any California entity that year.
It seems to have been a wise investment. Newsom issued a statement hours after the White House announced its bailout decision, lauding the Biden administration for acting "swiftly and decisively to protect the American economy" and praising the bailout as having "profoundly positive impacts on California." While what came of the bank's California lobbying campaign is unclear, both the state workers' and teachers' pensions are invested in the Silicon Valley Bank to the tune of $67 million and $11 million respectively, according to spokesmen.
Silicon Valley Bank and the Newsoms were a perfect match. California's first couple has come under fire for their ethically dubious relationships with donors, who have a habit of donating to one of Siebel Newsom's nonprofits whenever they need something from her husband's office. And the bank, which collapsed last week after announcing it did not have enough cash to cover withdrawals, has a history of making large financial donations to potential political allies.
The same year the bank donated to Siebel Newsom, its CEO, Greg Becker, maxed out campaign contributions to Senate Majority Leader Chuck Schumer (D., N.Y.). He also maxed out contributions to Sen. Mark Warner (D., Va.).
These are just a few instances of the Democratic-leaning bank's habit of donating to powerful Democratic politicians. Employees of the collapsed financial institution have given over $100,000 to Democrats since 2016, including more than $39,000 to Biden's presidential campaign, financial disclosures show. In that same window, the firm's employees gave just around $7,000 to Republicans.
Newsom is not the only recipient of Silicon Valley Bank donations to support Biden's bailout. Warner, now a member of the Senate Banking Committee, on Sunday issued a statement commending the Biden administration's move. Schumer on Monday issued a joint statement with House Minority Leader Hakeem Jeffries (D., N.Y.) praising the Biden administration for taking "swift action to safeguard depositors and maintain confidence in the banking system."
California Rep. Ro Khanna (D.), who took $500 from Becker in 2018, was a vocal proponent of the Biden administration's bailout. Silicon Valley Bank employees have also given $550 since 2016 to the Lincoln Project, the scandal-plagued "Never Trump" PAC.
Newsom personally solicited the donation to his wife's nonprofit through a California program that allows public officials to raise funds from corporate backers for their favored charities. Silicon Valley Bank executive John China sits on the board of Siebel Newsom's California Partners Project, which pressures corporations to appoint women to their boards.
California leaders are eager to rescue the Silicon Valley Bank's wealthiest depositors, as the state's top 1 percent of earners pay nearly half of its taxes. If the bank's biggest customers lose millions and write off those losses, California's budget—already facing a major deficit—could suffer a major blow.
Published under: Bailout , Bankruptcy , Big Banks , California , Chuck Schumer , Democratic Donors , Gavin Newsom , Joe Biden , Lobbying , Mark Warner , Ro Khanna