Newsom cuts off Walgreens

From: POLITICO California Playbook - Thursday Mar 09,2023 02:11 pm

Mar 09, 2023

By Jeremy B. White, Lara Korte, Ramon Castanos and Matthew Brown

THE BUZZ: In a caustically divided country, Gov. Gavin Newsom wants companies to take a stand — and face consequences if they don’t.

California is cutting off Walgreens, declining to do business with a company that waded into national politics by saying it would not dispense an abortion drug in states where GOP officials have threatened legal action. Newsom responded by blocking renewal of a state contract under which Walgreens was providing drugs to California inmates. That relationship has earned the company about $54 million so far.

That may seem like a paltry sum for a state with a $308 billion budget and a company that generated $33 billion in sales last quarter. But Newsom presented the move as a larger effort to influence behavior. “I’m hopeful, perhaps, this decision will wake up and enliven Walgreens to clarify their position,” Newsom said in an exclusive interview with POLITICO. "Walgreens, if they want to do the right thing, they still have the opportunity.”

California’s enormous expenditures and gigantic GDP are potent policy levers. That’s true with economic rules that compel multinational companies to change if they want to do business here, whether that’s auto emissions standards or plastic packaging restrictions. It applies to trying to force pension funds to divest from fossil fuels. You can see it in California banning publicly funded travel to dozens of states deemed to discriminate against LGBTQ people. California will soon award tax credits in part based on whether businesses relocate from conservative states.

Newsom said businesses face a fundamental moral choice. The governor told POLITICO that his action on the contract was one “in a series of steps to really call the question — what side are you on? Whose side are you on? Are you going to just cower in the face of bullies?” Some in Corporate America, he added, have been willing to do just that. “We’re seeing too many companies just roll over — you saw even the College Board roll over, not just Disney and others.”

Those last two examples are clear references to Florida. Gov. Ron DeSantis stripped Disney’s self-governing status after it opposed the so-called “Don’t Say Gay” bill. He also threatened to ban the College Board’s African American Studies curriculum — which was then significantly diluted.

Newsom condemned both cases. Where DeSantis touted his anti-Disney crusade as a rebuke to corporations that bend to “the left’s woke agenda,” Newsom urged Disney to send workers to California. He accused the College Board's head of being a “puppet” of DeSantis who espouses “bullshit.”

DeSantis and his allies argue an unchecked left has forced companies to take political stances that put ideology before economics, “invariably siding with leftist causes” (in Disney’s case, thanks to “left-wing activists working at the company’s headquarters in Burbank”). In Newsom’s estimation, a time of crisis does not permit neutrality.

BUENOS DÍAS, good Thursday morning. This winter cascade of atmospheric rivers continues today, with forecasted feet of rain raising concerns about flooding as much of the state exits severe drought status. From scarcity to overabundance — welcome to California. Stay safe out there.

Got a tip or story idea for California Playbook? Hit us up at jwhite@politico.com and lkorte@politico.com or follow us on Twitter @JeremyBWhite and @Lara_Korte.

QUOTE OF THE DAY: “We have two very progressive members who have been in the Progressive Caucus for some time. … He has a progressive record. His questionnaire was fine. But I think the timing with the Senate race just brings questions around it.” Congressional Progressive Caucus Chair Rep. Pramila Jayapal on Rep. Adam Schiff’s withdrawn application for membership in a caucus that includes Senate rivals Katie Porter and Barbara Lee, via the Los Angeles Times.

TWEET OF THE DAY:

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TOP TALKERS

GARCETTI GETS CLOSER — Former L.A. Mayor Eric Garcetti is one vote away from securing the India ambassadorship he was appointed to nearly two years ago. Garcetti cleared the Senate Foreign Relations Committee Wednesday, thanks in part to support from two Republicans. Now it comes down to Senate Majority Leader Chuck Schumer steering his caucus through a floor vote — an uncertain proposition with an unclear timeline given some wavering senators.

— A journey through L.A. County eviction court to avoid homelessness, by the Los Angeles Times’ Paloma Esquivel: “Often, they believe they can simply explain their side of the story and the judge will understand, only to find themselves fumbling as they navigate complex rules of evidence and other legal procedures, combined with labyrinthine local and state housing laws that are challenging even for lawyers and judges to track.”

CAMPAIGN MODE

— “Election 2023: Meet the candidates for L.A. City Council District 6’s special April 4 vote,” by Los Angeles Daily News’ Linh Tat: Every candidate identified homelessness or the region’s housing affordability crisis as a priority issue and said more mental health and substance abuse treatment services are needed.

CALIFORNIA AND THE CAPITOL CORRIDOR

— Lawyers make opening statements in Mark Ridley-Thomas corruption trail, by the Los Angeles Times’ Matt Hamilton: “In an opening statement, Asst. U.S. Atty. Thomas Rybarczyk portrayed Ridley-Thomas as a conniving political operator motivated foremost by preserving the reputation of his son, and by extension, himself.”

— “Fight begins over California bill to hold social media companies liable for harming children,” by The Sacramento Bee’s Stephen Hobbs: “The measure is the latest example of the escalating debate over how much social media companies should be responsible for information found on their platforms.”

— “Arnold Schwarzenegger’s Last Act,” by The Atlantic’s Mark Leibovich: “Schwarzenegger can be selective in his observance of traffic signals. He zipped through intersections with cars screeching behind him.”

— “'It could get ugly’: Atmospheric river expected to bring floods to Calif.,” by San Francisco Gate’s Amy Graff: “These storms are known for bringing above-normal temperatures in winter, and Rowe said snow levels will probably get up to 8,000 feet in this event. The heaviest precipitation is expected in Northern California on Thursday and Friday, and the warmest conditions are expected Friday afternoon, when valley locations are likely to break into the 60s, and the foothills could see temperatures in the mid-50s. Truckee and Yosemite are expected to hit a high of 42 degrees Friday.”

— “After COVID-19 school chaos, California lawmakers debate role of superintendent,” by the Los Angeles Times’ Mackenzie Mays: “Assemblymember Kevin McCarty (D-Sacramento) has introduced legislation that would require California’s superintendent to be appointed by the governor instead of elected by voters, in what he called a “good government” policy that could add power and influence to an office that oversees nearly 6 million public school students.”

BIDEN, HARRIS AND THE HILL

— Senate Minority Leader Mitch McConnell hospitalized after a fall, by POLITICO’s David Cohen: David Popp, the Kentucky Republican’s communications director, said in a statement: “This evening, Leader McConnell tripped at a local hotel during a private dinner. He has been admitted to the hospital where he is receiving treatment.”

— McCarthy rejects Zelenskyy’s invitation to Ukraine, by POLITICO’S Matt Berg: When informed about the Ukrainian invitation, the speaker told CNN that he would not take the trip and blamed the Biden administration for not acting quickly enough to aid Ukraine. Still, McCarthy (R-Calif.) held his position that the U.S. should not be sending a “blank check” to Kyiv, repeating a position he initially made last fall that sparked uproar from members of both parties.

— “House GOP prepares to slash federal programs in coming budget showdown,” by The New York Times’ Carl Hulse and Catie Edmondson: “Republicans are ready this week to condemn President Biden’s forthcoming budget as bloated and misguided and have said they will propose their own later this spring, a timetable that has slipped as they continue to debate what should be in their plan. But uniting his fractious conference around a list of deep cuts to popular programs will be the biggest test yet for Speaker Kevin McCarthy, who will need to win the support of Republicans in competitive districts and conservative hard-liners to cobble together the 218 votes needed to win the passage of a budget outline.”

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SILICON VALLEYLAND

— “The chatbots are here, and the internet industry is in a tizzy,” by The New York Times’ Tripp Mickle, Cade Metz and Nico Grant: “The volatility of chatbots has made it impossible to predict their impact.”

MEDIA MATTERS

— “Tavis Smiley’s #MeToo exile didn’t last. Inside his comeback on L.A. radio,” by the Los Angeles Times’ James Rainey: “And within the Black community, Smiley’s reemergence has produced no major blowback or protests. His long and deep ties in African American political circles — with allies like Bass and suspended Councilmember Mark Ridley-Thomas — have provided a base of support for both the owner and his station.”

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