October 17, 2021

Tech billionaires kick-start the recall fight over Gavin Newsom

Reed Hastings is the biggest donor in the California recall election — by far. |...

Reed Hastings is the biggest donor in the California recall election — by far. | Ernesto S. Ruscio/Getty Images/Netflix

Reed Hastings is spending $3 million to back Newsom. There could be much more to come.

California Gov. Gavin Newsom is staring down a recall election over his handling of the Covid-19 pandemic — and tech billionaires are preparing to deploy their war chests.

Netflix founder Reed Hastings has unofficially kick-started the fight by making a $3 million donation to back Newsom, according to a new disclosure filed on Thursday evening. That massive sum — by far the largest of any donation to date on either side of the recall fight — is likely just the first in what’s expected to be a big-money brawl among Silicon Valley billionaires, who are somewhat divided on Newsom.

The recall, likely held this fall, will be 2021’s marquee election, with an expected price tag of over $100 million and featuring candidates like Caitlyn Jenner. And tech billionaires in the state are likely to have starring roles in the warfare.

The donation is significant because Hastings is one of the Democratic Party’s most powerful donors, particularly when it comes to California state politics. Alongside his wife, Patty Quillin, Hastings likes to spend his billions on criminal justice reform and education reform — and on like-minded politicians who back him on these issues.

It’s also significant because it suggests a new alliance between Hastings and Newsom. Hastings spent over $7 million on an outside group that backed a Newsom rival, former Los Angeles Mayor Antonio Villaraigosa, when he challenged Newsom for the Democratic nomination for governor in 2018.

“We had this strange conversation where I told Reed, ‘I thought you guys would only put in ten million’ — I really thought five — and he said, ‘I’m only putting in half of what I otherwise would, because it’s you,” Newsom relayed to the New Yorker in 2018. Hastings would later text Newsom after he bested Villaraigosa: “If you’ll still have me, I’d be honored to support you.”

So there could be much more where that came from. Hastings has a net worth of $5 billion. And Newsom has a serious leg up in the recall fight when it comes to his state’s billionaires: Anti-Newsom candidates must abide by contribution limits that limit the size of the billionaires’ checks to $32,400. The same isn’t true for pro-Newsom committees like the one that just took in $3 million from Hastings.

And there are Silicon Valley billionaires who will spend their own fortunes against the governor. Investors like Chamath Palihapitiya and David Sacks see Newsom’s coronavirus restrictions as anti-business and have funded anti-Newson efforts. But the contribution limits mean that the pro-Newsom billionaires will have far greater influence.

And many have signaled they’re up for the fight. Newsom, a former mayor of San Francisco, has long cultivated relationships with the Bay Area’s mega-rich. Earlier this spring, 75 tech leaders signed onto a public letter organized by Silicon Valley titan Ron Conway publicly stating that they opposed the recall effort. That roster included Democratic mega-donors like former Google CEO Eric Schmidt, LinkedIn founder Reid Hoffman, and billionaire philanthropist Laurene Powell Jobs.

Few of them have yet landed on campaign finance reports by giving significant amounts. But the size of Hastings’s donation is a reminder of the deep pockets that Newsom can dig into over the next few months as the campaign heats up.

California’s last recall election of a governor, in 2003, cost campaigns a total of $90 million. That’s when voters elected Arnold Schwarzenegger.

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