In California politics, extortion comes with a tax deduction

When Gov. Gavin Newsom's former chief of staff agreed to plead guilty in mid-May to three federal charges, a spokesperson for the U.S. Attorney's Office for the Eastern District of California, Lauren Horwood, told CalMatters in an email, "no candidate running for governor has been implicated in any charging document."

That carefully worded statement does not exclude the possibility that a candidate for governor has been implicated in some other document, and it doesn't leave the current governor in the clear, either.

Dana Williamson was indicted in November 2025 on 23 counts that included conspiracy, bank and wire fraud, filing a false tax return and making false statements. Newsom told KCRA 3 in Sacramento at the time that he was "first made aware of the investigation almost a year ago" and had placed Williamson on leave at that time. She left the administration in December 2024.

An attorney for Williamson told reporters that federal investigators had previously approached Williamson asking for information about Newsom, and she informed them that she had none because Newsom had committed no crime.

Including Williamson, three people have now entered guilty pleas and are cooperating in the strange case of the slow looting of an unused campaign account belonging to Xavier Becerra, now a candidate for governor. Becerra told KCRA that learning of the charges was "a gut punch."

FBI Sacramento Special Agent in Charge Sid Patel told reporters that the charges against Williamson were "the result of three years of relentless investigative work, in partnership with IRS Criminal Investigation and the U.S. Attorney's Office."

In other words, Joe Biden was president.

Nonetheless, Newsom told KCRA last fall that he wondered whether "the Trump administration had politicized this."

That was his message again on Monday, when he released a four-minute video accusing the president of launching an investigation into himself and his wife, Jennifer Siebel Newsom, only because he is "considering" running for president.

If he ever actually does announce his candidacy, he'll have to open a federal campaign account and start filing reports about fundraising and expenditures, signing them on penalty of perjury, which is what Xavier Becerra did with his looted California campaign account, even though he says now that he knew nothing.

Meanwhile, Californians are left to wonder whether the current governor and the Democratic candidate for governor are at risk of being dragged off the political stage in handcuffs.

Much of the sketchy fundraising and spending in California politics is completely legal under state law if the forms are filled out correctly, even though quite a lot of it would get politicians in other states arrested for bribery, extortion or money laundering.

For example, the "Newsom for California Governor 2022" committee is still open and active even though the campaign is long over. Earlier this year, the committee reported a $2.6 million refund of its earlier contribution to Newsom's separate "Yes on 50" ballot measure committee. The "Newsom for California" committee also paid for a CaliforniaFireFacts.comsite in 2025 that featured a dramatic photo of Newsom in an action pose on a smoky street along with a donation button labeled "Contribute to the California Fire Foundation" that actually took donors to ActBlue Charities, Inc., under a banner for Newsom's federal political action committee, "Campaign for Democracy."

Newsom was recently fined $31,500 by state regulators for being late to report 36 "behested payments" totaling more than $5.5 million. As it happens, 34 of those unreported payments went to the California Fire Foundation.

"Behested payment" is California's name for what happens when an elected official calls up companies, unions or trade organizations with business before the state and asks them to donate any amount to an entity for a charitable, governmental or legislative purpose. Payments totaling $5,000 or more in a calendar year from a single source must be reported. It's as if California has a form to confess extortion.

The late-reported payments might have raised questions at the time. Blackrock, Uber Eats and Lockheed Martin were "behested" out of $500,000 each. PayPal was hit up for $250,000. Kaiser paid $100,000.

It's not always charity, either. Newsom raised more than $8 million from special interests for his two inaugural celebrations through "behested payments" and later gave $5 million of it to the California Protocol Foundation, which paid the expenses of his flashy trips to China and international climate conferences.

Jennifer Siebel Newsom has also seen the benefits of this racket. Her husband has "behested" more than $4 million to "support the work" of her nonprofit, the California Partners Project. In March, the Federated Indians of Graton Rancheria were persuaded to contribute another $500,000 after similar contributions in previous years.

The exact path of the money out of the California Partners Project, and whether any of it crosses a line into using a nonprofit for personal benefit, may or may not be explained in future federal documents. All we know is that FBI Sacramento Special Agent in Charge Sid Patel said "IRS Criminal Investigation and the U.S. Attorney's Office" have been doing "relentless work" for three years.

As long as they're looking, they might want to investigate the strange phenomenon of legislative caucus foundations. These are 501(c)(3) organizations run by current legislators in Sacramento. Donations are apparently deductible. The "asks" are reported as "behested payments."

For example, the Legislative Black Caucus Policy Institute has a mission of "promotion and support of African-American culture in California." Its 2024 federal tax return reported gross receipts of more than $2.4 million. It paid the Pebble Beach Company $1,058,113 for a "fundraising event venue."

The principal officer listed on the IRS 990 form is Assemblymember Lori Wilson, who reported "behested payments" to the Legislative Black Caucus Policy Institute in 2024 totaling $2.25 million, including $65,000 each from Southern California Edison and the California Correctional Peace Officers Association.

There are also "Latino," "Jewish," "Asian-Pacific Islander," "LGBTQ" and "California Central Coast" legislative caucus foundations. They all hold fundraising events. Donations can come from companies with business before the lawmakers' committees.

Is it charity? Is it lobbying? Is it bribery? Is it extortion? Is it deductible?

Stay tuned. We'll all find out together.

Write Susan@SusanShelley.com and follow her on X @Susan_Shelley

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