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Jeremy B. White and Lara Korte’s must-read briefing on politics and government in the Golden State | | | | |  | | By Jeremy B. White , Lara Korte , Sakura Cannestra and Owen Tucker-Smith | THE BUZZ: What does the spectacular collapse of a crypto firm have to do with Covid-19 and California politics? More than you might think. Californians almost voted on two statewide tax hikes this month. A measure to fund pandemic detection by raising affluent residents’ income taxes had the signatures to qualify for a spot on the ballot but instead got kicked to 2024. That was after Gov. Gavin Newsom conveyed his resistance (the governor strenuously opposed the other proposal, Proposition 30, which made it to the ballot and then failed). That theoretically set things up for the next cycle. The campaign had already sunk $19 million into the mission. But a principal funder detonated after writing checks to qualify the measure. The woes besetting Sam Bankman-Fried’s crypto empire directly affect the likelihood Californians will get a viral early warning system. Alameda Research,the trading firm linked to the now bankrupt crypto exchange FTX, spent $12 million to get that measure on the ballot with Sam’s brother Gabriel serving as treasurer. It was part of Bankman-Fried’s larger political project of lobbying and funding politicians who backed his pandemic prevention agenda. That funding stream may evaporate, along with money people invested with FTX. Bankman-Fried and his companies are now facing enormous scrutiny. The Senate is set to hold a hearing on the matter Thursday, with the House expected to follow next month. FTX faces mounting regulatory and law enforcement investigations amid allegations that it misused customer funds. | 
The FTX logo appears on home plate umpire Jansen Visconti's jacket at a baseball game with the Minnesota Twins on Tuesday, Sept. 27, 2022, in Minneapolis. | Bruce Kluckhohn/AP Photo |
Back in California, initiative proponents say they weren’t relying on FTX financing. Tech-philanthropist power couple Cari Tuna and Dustin Moskovitz had nearly matched Alameda Research with about $10 million in contributions to date. Initiative proponent Max Henderson told us he was confident there’s plenty of money available, with other funders prepared to step in.
But resources aren’t the same thing as political viability. Henderson said the scandal engulfing FTX may extend beyond the company to the campaign: “If the brand is substantially tarnished, then just having FTX as a funder may be damaging to us.” He argued that proponents have a finite window, with Covid-19 still pervasive and memories of it still potent, to erect a system that can prevent or minimize the next pandemic. Backers are still communicating with Newsom’s office. Henderson said they aren’t married to the ballot initiative route. But with a projected $25 billion deficit threatening to end California’s era of fiscal abundance, a major new budget outlay could be a hard sell. What does that mean for 2024? The answer is unknown at this point. BUENOS DÍAS, good Tuesday morning. The California Energy Commission meets today to discuss gasoline prices and refinery issues — topics that lead directly into Gov. Gavin Newsom ’s call for a new windfall profits tax on oil producers. One group that won’t be in attendance? The oil producers themselves. Got a tip or story idea for California Playbook? Hit us up: jwhite@politico.com and lkorte@politico.com or follow us on Twitter @JeremyBWhite and @Lara_Korte . QUOTE OF THE DAY: “Every time I see him on TV with a new project, or whatever, I’m like: Oh, I remember that bullet train to Chicago O’Hare.” Chicago Alderman Scott Waguespack on Elon Musk’s unfulfilled Boring Company promises, via the WSJ. TWEET OF THE DAY
|  Today's Tweet of the Day. | Twitter |
WHERE’S GAVIN? Back in California after leaving the state for Thanksgiving.
| | | | POLITICO APP USERS: UPGRADE YOUR APP BY DECEMBER 19! We recently upgraded the POLITICO app with a fresh look and improved features for easier access to POLITICO's scoops and groundbreaking reporting. Starting December 19, users will no longer have access to the previous version of the app. Update your app today to stay on top of essential political news, insights, and analysis from the best journalists in the business. UPDATE iOS APP – UPDATE ANDROID APP . | | | | | |  | TOP TALKERS | | — “ Inside months of chaos at L.A. County’s juvenile halls: lockdowns, staff shortages ,” by the Los Angeles Times’ James Queally: “Dozens of officers are either on long-term leave or refusing to come to work, creating a staffing crisis that has led to increased violence in the halls and fostered an atmosphere many say is unsafe for the youths the county is tasked with caring for.” TRANSITING AWAY — “ Elon Musk’s Boring Company Ghosts Cities Across America ,” by the Wall Street Journal’s Ted Mann and Julie Bykowicz: “When it came time to formalize the partnership and get to work, Boring itself went underground—just as it has done in Maryland, Chicago and Los Angeles. Boring didn’t submit a bid for Ontario by the January 2022 deadline.” CA EXODUS CONTINUES — “ Remote work might push wealthy Californians out of cities. Is that a good thing? ” by the San Francisco Chronicle’s Phillip Reese: “The data shows high-income employees with college degrees are more likely to have access to this hybrid work model, while lower-income employees stay the course with on-site responsibilities and daily commutes.” | | CAMPAIGN MODE | | — “ Republican John Duarte says he thinks he will win uncalled California House race ,” by the Sacramento Bee’s Gillian Brassil: “Most of the uncounted votes come from areas in Fresno and San Joaquin counties, where Duarte’s campaign is confident the counts will return in his favor.” AS CALIFORNIA GOES… “ California elections finally had national relevance. Democrats didn’t capitalize ,” by Fireside Campaign’s Julia Rosen for CalMatters: “The Democratic Party could regret its failure to better coordinate campaigns in California and spend more money on congressional races that helped determine control of the House of Representatives.” — “ Column: Latino support for Karen Bass shows voters rejecting Black-brown strife ,” by the Los Angeles Times’ Jean Guerrero: “While the ethnic breakdown of the vote is still forthcoming, Bass’ strong performance after election day suggests that Latinx voters, who tend to cast their ballots closer to election day, favored her more than expected.” | | CALIFORNIA AND THE CAPITOL CORRIDOR | | FOLLOWING COLORADO — “ In red California, LGBTQ people still feel under threat. ‘There’s no safe place anywhere’ ,” by the Los Angeles Times’ Hailey Branson-Potts: “In politically red stretches of California — from the old logging towns in the north through the dusty farmlands of the Central Valley — the Colorado Springs massacre was yet another devastating reminder of how difficult and lonely it can be to be queer in conservative America.” — “ Paul Pelosi attack: New judge to preside over criminal case against David DePape ,” by the San Francisco Chronicle’s Nora Mishanec: “[Judge Stephen] Murphy will replace Judge Loretta Giorgi, who disclosed a potential conflict of interest during a hearing earlier this month, saying she had worked with Pelosi’s daughter, Christine Pelosi, at the San Francisco City Attorney’s Office during the 1990s.” GAS GUZZLED — “ Diesel trucks could be phased out in California in 20 years ,” by the Press-Enterprise’s Jeff Horseman: “The Advanced Clean Fleets rule, which could get an air board public hearing in spring, seeks to phase out diesel trucks across the state by 2042 at the latest.” WEEK THREE UC — “ Fears rise that UC strike could have long-lasting consequences on vaunted research, teaching ,” by the Los Angeles Times’ Teresa Watanabe: “The collective labor action, by four United Auto Workers bargaining units across all 10 UC campuses and the Lawrence Berkeley National Laboratory, is also surfacing long-standing complaints about inadequate state funding for students and misplaced UC spending on ‘administrative bloat,’ as one faculty member put it, over support for academics.” — “ Cal Poly SLO enrolls the lowest rate of Black students among all the state’s public universities ,” by CalMatters’ Mikhail Zinshteyn: “For years, Cal Poly San Luis Obispo has enrolled the smallest percentage of Black students among all campuses in the California State University and University of California systems. Although it’s difficult to pinpoint the reason, the campus attracts few freshman applicants and transfer students, and students describe a racist environment.” — “ Q&A: The few California lawmakers who are renters form new caucus to advocate for tenants ,” by the Mercury News’ Ethan Varian: “So earlier this year, he and his three fellow renters in the Assembly formed a new ‘renters’ caucus’ to advocate for tenant-focused policies. Another goal: pushing back on what they see as the outsized influence of landlord and real estate groups in state politics.” | | | | GO INSIDE THE MILKEN INSTITUTE FUTURE OF HEALTH SUMMIT: POLITICO is featuring a special edition of our “Future Pulse” newsletter at the 2022 Milken Institute Future of Health Summit from Dec. 6 to 8. The newsletter takes readers inside one of the most influential gatherings of health industry leaders and innovators solving the biggest global health issues to ensure a healthier, more resilient future for all. SUBSCRIBE TODAY TO RECEIVE EXCLUSIVE COVERAGE . | | | | | | | BIDEN, HARRIS AND THE HILL | | HOUSE BALANCING ACT — House Dems on GOP's thin majority: Welcome to hell , by POLITICO’s Sarah Ferris: House Minority Leader Kevin McCarthy and his team are set to take over in January with the kind of margins that vexed Speaker Nancy Pelosi, but lacking the two decades of experience she brought to the task. — “ First on CNN: Harris and Macron to strengthen working relationship with NASA headquarters visit ,” by CNN’s Jeremy Diamond: “That trip was a key part of the US effort to revitalize ties with France after a surprise US-Australian submarine partnership upended France’s own submarine deal with Australia, triggering a ferocious French response that brought the relationship to its lowest point in two decades.” | | SILICON VALLEYLAND | | PLUGGING A LEAK — Ireland fines Meta €265M for ‘data scraping’ leak , by POLITICO’s Shannon Van Sant and Vincent Manancourt: Personal data of EU Justice Commissioner Didier Reynders, Luxembourg Prime Minister Xavier Bettel and dozens of EU officials were included in a leak of the 533 million records including phone numbers, Facebook IDs, full names and birthdates that surfaced on a public forum and circulating widely on the web. — “ Musk threatens war with Apple ,” by Axios’ Sara Fischer: “The tweets are part of a broader narrative Musk is trying to paint that Apple is a monopoly and uses its power to censor voices and charge ‘a secret 30% tax’ on transactions in its App Store.” | | MIXTAPE | | — “ Harvey Weinstein will not testify in L.A. trial; defense begins presenting its case ,” by the Los Angeles Times’ James Queally. HANDLING HOUSING PRICES— “ California home prices are dropping. This Sacramento region county is still seeing a spike ,” by the Sacramento Bee’s Ryan Lillis. TAKING DOWN THE TREE — “ David Shaw exits, leaving behind a Stanford football program in steep decline ,” by the San Francisco Chronicle’s Ron Kroichick. — “ Historic mining town plagued by arsenic gets federal funds for cleanup effort ,” by the Los Angeles Daily News’ Brooke Staggs. — “ Suspect in killings of 3 family members in Riverside had ‘catfished’ teen, police say ,” by the Press-Enterprise’s Josh Cain, Hanna Lykke and Hunter Lee. | | TRANSITIONS | | — Michael Gunning will become chief strategy officer for Lighthouse Public Affair, coming over from the California Building Industry Association. | | BIRTHDAYS | | L.A. Times’ Mark Barabak … Geoff Ogunlesi … Emily Lenzner … Tomá Hunt-Beczak CALIFORNIA POLICY IS ALWAYS CHANGING: Know your next move. From Sacramento to Silicon Valley, POLITICO California Pro provides policy professionals with the in-depth reporting and tools they need to get ahead of policy trends and political developments shaping the Golden State. To learn more about the exclusive insight and analysis this -only service offers, click here . Want to make an impact? POLITICO California has a variety of solutions available for partners looking to reach and activate the most influential people in the Golden State. Have a petition you want signed? A cause you’re promoting? Seeking to increase brand awareness amongst
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