Newsom embarrassed by French Laundry dinner, unemployment scam

Gov. Gavin Newsom speaks at a news conference at Cal Expo in Sacramento.

By George SkeltonCapitol Journal Columnist

Dec. 3, 2020 12:05 AM PT

SACRAMENTO — Mix a governor’s hypocrisy with a touch of elitism and perceived incompetence and you can create a killer negative campaign ad.

On the positive side for Gov. Gavin Newsom, he carries California’s vastly preferred political brand — Democrat — has a clean image, is gifted with telegenic looks and seems to always be trying.

Newsom’s positives should be enough to win him reelection in 2022, especially since his ability to raise campaign money is practically unlimited.

But he’s starting to look vulnerable after the French Laundry and unemployment scam embarrassments.

It was damaging enough that Newsom was hypocritical in attending a lobbyist friend’s birthday dinner with people from several households. It was the type of mixing he had urged other Californians to avoid in order to slow the spread of COVID-19.

Newsom initially told reporters the party was outside where the coronavirus is less likely to spread. But clandestine photos showed a private dining room that looked mostly inside. The elitist touch was added by the French Laundry being an opulent, super expensive restaurant in the Napa Valley wine country.

The French Laundry restaurant in Yountville, Calif.

“I made a bad mistake,” the governor later acknowledged. “I need to preach and practice, not just preach and not practice.”

Then things got worse for Newsom.

Just before Thanksgiving, nine district attorneys and a federal prosecutor reported that the state Employment Development Department had been mistakenly paying out unemployment benefits to convicted murderers, and other state prisoners and local jail inmates.

By Monday, state investigators had identified $400 million paid on roughly 21,000 unemployment benefit claims improperly filed in the names of California prisoners.

“As we unravel this onion, it’s likely to be the biggest fraud in California history,” says Sacramento County Dist. Atty. Anne Marie Schubert, who led the task force that investigated and reported the scam.

Some D.A.s speculate the misspent amount could hit $1 billion. The investigation is still underway.

“I have no doubt that hardcore gang members inside prisons and jails have money flowing outside to guns and drugs, financing potentially violent behavior,” Schubert says.

A 2022 challenge of the governor is beginning to look like more than a hopeless exercise.

“I’m very seriously thinking about running because California needs new leadership and one-party rule has not served the state well in the last few years,” Republican San Diego Mayor Kevin Faulconer told me.

Faulconer’s mayoral term ends Dec. 10.

“More to come shortly,” he says.

Translation: The soon-to-be ex-mayor is unquestionably running. The only unknown is, how far does he get? A topic for another day.

“The scope of this fraud is breathtaking,” Faulconer says. “It’s another gut punch to Californians who have been waiting months to get unemployment benefits and yet they see it going to death row inmates.

“It’s incredible mismanagement. All the more glaring for Californians because we are the state of innovation, of technology. Yet we can’t get this system to work.”

Newsom and his advisers are trying to explain the unexplainable — something that never could be sold in a 30-second TV ad. If you feel compelled to use up a TV spot for that quagmire of weeds, you’ve already lost.

Dozens of other states have cross-checking systems that allow their unemployment agencies to compare the Social Security numbers of benefit claimants with the inmate population. But California law forbids sharing of Social Security numbers with non-law enforcement agencies. So, no cross-checking for the EDD.

Yes, that state law should be changed. The administration says it’s working on it.

The vast majority of fraudulent claims involved a new federal Pandemic Unemployment Assistance program, Newsom told the D.A.s in a letter Tuesday. That program was designed for independent contractors — Lyft drivers, for example — who aren’t eligible for regular unemployment insurance because they’re not employees.

With the PUA program, there’s no company to check with to verify that the claimant is legit. It’s “a self-certification process,” Newsom wrote, and “bad actors took advantage of the crisis to abuse the system.”

Since then, EDD has installed a more secure identification system, it says.

OK, but the only real explanation is: We screwed up.

“The sum” of the French Laundry incident and prisoners’ scam “add up to something much worse than the individual parts,” says Dan Schnur, a former political strategist who now teaches politics at USC and UC Berkeley.

“Hundreds of millions of dollars going to convicted felons is an easy campaign commercial. But when that ad can show a split screen with the governor having dinner at an expensive restaurant with well-connected lobbyists during the pandemic, it becomes a much more damaging hit.”

Rob Stutzman, a Republican consultant and top advisor in gubernatorial campaigns for Arnold Schwarzenegger and Meg Whitman, says: “It plays on all the things people imagine are the worst things about politics — and it turns out to be true.”

Democratic Assemblywoman Cottie Petrie-Norris of Laguna Beach heads an Assembly committee that has tried to hold EDD’s “feet to the fire,” she says.

The lawmaker is critical of her fellow Democrat Newsom, noting his first reaction to the fraud was to create a task force.

“We do not need a task force to implement simple and obvious steps that are implemented across the country,” she says. “It’s absurd. This is outrageous.

“EDD is an example of where California government needs to do a much better job in expending tax dollars.”

Petrie-Norris’ tough rhetoric results partially from her representing a very competitive district. She just barely won reelection over a GOP opponent.

If Newsom doesn’t tighten up his administration and partying, he could also face a competitive race.