Fools Gold: Newsom’s Bailouts, Beijing, and Broken California Dream | 3.16.25

Summary

Morning Wire Podcast Summary Episode: "Fools Gold: Newsom’s Bailouts, Beijing, and Broken California Dream" | March 16, 2025

---

Introduction

In this episode of Morning Wire, hosted by John Bickley and Georgia Howe, the focus is on California Governor Gavin Newsom and the recent revelations from the investigative book Fool's Gold by Susan Crabtree and Jed McPhatter. The authors delve into Newsom's political maneuvers, his connections with influential figures, and the systemic issues plaguing California’s governance. This summary encapsulates the key discussions, insights, and conclusions drawn during the episode.

---

1. Wildfire Cash Windfall and Energy Company Bailouts

Susan Crabtree brings to light the intricate relationship between Governor Newsom and California's energy companies, particularly Pacific Gas and Electric (PG&E) and SoCal Edison.

• Performative Politics and Family Connections

  "Everything that Gavin Newsom does is performative, not performance based. He's been given everything on a silver platter..." (00:55), Susan Crabtree critiques Newsom’s reliance on family ties and political connections, including those with the Getty family and Roy Brown, to ascend politically.

• PG&E's Role in Wildfires

  "PG&E is responsible for the deadliest wildfire in California history in Paradise, with 84 counts of manslaughter..." (02:36). Crabtree highlights PG&E’s negligence in maintaining infrastructure, leading to catastrophic wildfires like the Paradise and Eaton fires.

• Governor's Bailout Strategies

  "Gavin Newsom orchestrated a bailout for PG&E using taxpayer dollars to pay for their legal defenses..." (03:54). The episode reveals how Newsom prevented PG&E's bankruptcy by facilitating bailouts that shielded the company from future liabilities, effectively enabling continued negligence.

• Revolving Door Phenomenon

  "The Public Utility Commission has a revolving door, with commissioners moving between regulatory bodies and utility companies..." (04:53). This systemic issue fosters a cozy relationship between regulators and energy firms, impeding accountability.

Notable Quote:

“Newsom let these energy companies off the hook, exacerbating wildfire risks while accepting substantial campaign contributions.” – Susan Crabtree (004:48)

---

2. Connections with Communist China

Jed McPhatter explores Newsom's controversial ties to Chinese entities during his tenure as Mayor of San Francisco.

• China SF Nonprofit Organization

  "Newsom created a nonprofit run out of the Mayor's Office of Economic Development, co-founded with Chinese billionaire Vince Low..." (06:29). This organization aimed to attract Chinese investment but inadvertently facilitated the infiltration of criminal elements and CCP officials into California’s real estate market.

• Economic Impact vs. Criminal Activities

  "While China SF claimed to bring in $5.5 billion in economic impact, many of the recruited companies were run by criminals..." (07:00). The nonprofit's activities led to incomplete developments and financial mismanagement, undermining California's economic stability.

• Bribery and Lack of Backlash

  "A company recruited through China SF, ZNL Properties, was criminally charged for bribing Newsom associates..." (09:21). Despite these revelations, Newsom faced minimal backlash, partly because donations were made anonymously, obscuring the direct link to illicit activities.

• Continuation of Controversial Practices

  "China SF’s model was embedded into the state-level trade office, now known as Go Biz, continuing the problematic relationship." (10:51). This ongoing partnership signifies sustained vulnerabilities in California’s approach to foreign investments.

Notable Quote:

“Gavin Newsom and China SF acted as permit expediters for Chinese companies, creating an uneven playing field for local developers.” – Jed McPhatter (12:03)

---

3. Handling of the Prison System During COVID-19

Susan Crabtree discusses Newsom's controversial decisions regarding California’s prison system amidst the COVID-19 pandemic.

• Supreme Court Order on Prison Overcrowding

  "Under a 2011 Supreme Court order, Newsom was required to address prison overcrowding without building new facilities..." (12:27). Instead of expanding prison capacity, Newsom opted to reduce inmate numbers.

• Mass Release of Prisoners

  "Newsom released 70,000 prisoners early, citing COVID-19 risks, despite lower infection rates in prisons compared to the community." (12:27). This decision was influenced by a whistleblower's advice, which Newsom disregarded, leading to significant security concerns.

• Rise in Crime and Public Safety Issues

  "Following the releases, California experienced a surge in smash and grab crimes, with businesses facing increased vandalism." (14:05). Newsom failed to acknowledge the potential link between the early releases and the uptick in criminal activities.

Notable Quote:

“These tens of thousands of prisoners were released, and now we see a direct correlation with the rise in violent crimes.” – Susan Crabtree (13:45)

---

4. Transgender Policies and Performative Stances

The podcast delves into Newsom’s fluctuating stance on transgender issues, revealing a pattern of performative politics.

• Support for Trans Athletes

  "In 2013, Newsom supported legislation allowing transgender athletes to compete in girls' high school and women's college sports." (14:26). This policy aimed to promote inclusivity but has sparked debates over fairness in competitive sports.

• Contradictory Statements on Transgender Policies

  "During a podcast with Charlie Kirk, Newsom hinted at reversing transgender athlete policies, claiming concerns over fairness (15:10). However, his administration maintains its support for transgender rights." (15:03).

• Trans Sanctuary State Declaration

  "In 2022, Newsom declared California a trans sanctuary state, protecting transgender individuals from punitive measures other states impose." (15:03). Despite his recent comments, there are no concrete plans to reverse existing transgender-friendly policies.

• Performative Messaging vs. Policy Actions

  "Newsom's rhetoric suggests internal conflict and performative gestures rather than substantive policy changes." (16:58). His comments align closely with themes in his wife's gender justice films, indicating a disconnect between his statements and policy actions.

Notable Quote:

“He has no internal convictions and fills the mask that others want him to wear.” – Susan Crabtree (16:58)

---

Conclusion

Morning Wire’s episode on Gavin Newsom, presented by Susan Crabtree and Jed McPhatter, paints a critical picture of the Governor’s administration. From enabling energy companies responsible for deadly wildfires to fostering problematic ties with Chinese entities and mishandling the prison system during a pandemic, the discussion reveals a pattern of self-serving decisions that undermine California’s integrity and dreams. Additionally, Newsom's approach to transgender policies underscores a theme of performative politics lacking genuine commitment. The episode underscores the authors’ thesis that Newsom and his allies have significantly contributed to the deterioration of the California Dream through questionable political dealings and ineffective governance.

Final Quote:

“Gavin Newsom has been portraying a facade for years, masking his true intentions and failing to uphold the values he professes.” – Susan Crabtree (16:58)

---

This summary provides an in-depth overview of the Morning Wire episode, capturing the essence of the discussions and the critical perspectives offered by Susan Crabtree and Jed McPhatter.

Transcript

[Susan Crabtree]

Governor Gavin Newsom has made his way into the headlines in recent weeks, not just for the devastating California fires, but also his attempts to tack right on several of his left wing stances. Now a new investigative book peels back the curtain on Newsom's problematic political dealings as well as other figures who the authors say killed the California dream.

[John Bickley]

In this episode, we sit down with the authors of the expose to discuss Newsom and the state of progressive California. I'm Daily Wire editor in Chief John Bickley with Georgia Howe. It's Sunday, March 16th, and this is a weekend edition of Morning Wire. Joining us now are the authors of a new investigative book, Fool's Susan Crabtree and Jed McPhatter. The book breaks several new details about some key political figures in California. Susan and Jed, thank you so much for joining us.

[Susan Crabtree]

Yeah, it's my pleasure.

[Jed McPhatter]

Thanks for having me.

[John Bickley]

John, there's a lot of pretty remarkable findings that you've detailed here that are causing a stir. But we wanted to zoom in here on perhaps the most significant figure right now in terms of the news cycle. That's Gavin Newsom. Let's start with the most immediate issue. Susan, you've highlighted what you've called the wildfire cash windfall. This involves Newsom and the energy company Pacific gas and electric. PG&E, what have you uncovered on this?

[Susan Crabtree]

Well, it's interesting because everything that Gavin Newsom does is performative, not performance based. He's been given everything on a silver platter, whether it's his admissions to college, his wine dynasty that was fueled by Getty money or his rise in politics. It's all been given through his family connections with the Gettys and other political connections like Roy Brown and others. But when it comes to these wildfires, it's really startling because pge, it's not like other states in California. They cozy up to the Democrats, they spread money throughout the state. And in, in fact, they've given Gavin Newsom, his wife, $700,000 in contributions both to his gubernatorial campaign and her Gender justice films. That's her big project as the first partner of California. And I can tell you more about that. It is pretty eye opening. The Gender justice films funded by the Wildfire. What I need to stress here is that PG and E is responsible for the deadliest wildfire in California history. Up in paradise, they're responsible for 84 counts of manslaughter, 84 deaths.

[John Bickley]

Oh my gosh.

[Susan Crabtree]

In paradise, they didn't get as much publicity because it wasn't a wealthy area as the Palisades but it was much deadlier. The court determined that they were actually told to, to go and maintain it years ago and they never did. Just like they don't clean up the vegetation that can catch fire underneath their transmissions lines either. And it just sparked this huge, deadly fire. And we're seeing the same kind of thing with the Eaton fire. So Cal Edison is now being investigated for causing that one. It sparked a transmission line as well. And they just become these big, huge infernos. And Gavin Newsom has no problem taking money from the utilities that really are the main culprits on these fires. The Wall Street Journal found that PGE was responsible for 51,300 fires. That's one every two days in just six years. And they like to talk about climate change. They care so much about climate change. Gavin Newsom and Kamala Harris and Nancy Pelosi and others. But guess what? These wildfires, they have rolled back all of the progress that these EV mandates and clean air policies have had over the course of two decades because they just spew pollution into the air.

[John Bickley]

And so we have this pattern of Newsom letting these energy companies off the hook.

[Susan Crabtree]

Yes. In fact, after that big wildfire in paradise, PGE was going to go bankrupt because they owed so much to the victims. Billions and billions of dollars. And so guess what? It was Gavin Newsom to the rescue. He did a big bailout for PGE and he orchestrated through the governor's office using taxpayer dollars to pay for the lawyers. O'Melveny and Myers were the lawyers. They had been on the PGE payroll for decades. So it's basically he used PGE lawyers to craft a bailout for them that would prevent them from going bankrupt and to stay alive. And actually it inculcates them from any more problems with wildfires. They have this new wildfire trust fund that gets paid out, but it's only based on the value of PG and E stock. So if PGA stocks goes down, the victims get less money. It's a real racket.

[John Bickley]

Incredible. Is this true for the energy company SoCal Edison as well?

[Susan Crabtree]

Yes. Edison's the parent company. SoCal Edison is being investigated for the Eaton fire and that had 17 victims. 17 deaths in that fire and just devastation everywhere. It wasn't as affluent as the Palisades. It was more middle class, upper middle class area. And yeah, so Kyle Edison is involved. Newsom appoints the regulators to what is known as the Public Utility Commission. And they just let these utilities skate. And it's a revolving door too. So the Public utility commissioners, they often go from the utility commission to PGE and SoCal Edison, and they go right back in. It's just a big revolving door. And actually, Soquel Edison recently hired Biden's energy secretary, Granholm to sit on their boards in the middle of this big scandal that they're facing for causing the Eaton fire. And guess what? She had just given them $600 million from taxpayer money just six months ago for grid innovation. So yeah, it's there. I'm telling you, the Democrats are in cahoots with the utilities in California. It's not like other states. And it shouldn't be inevitable that every year we have these wildfires.

[John Bickley]

Now, on this topic of problematic political quid pro quos, Jed, you particularly dug into Newsom's connections to Communist China. That runs back to his time as mayor of San Francisco. That was back in 2004-2011. What did you find out about him during his time as mayor?

[Jed McPhatter]

One of the main things we look at from when he was mayor, we have a whole chapter devoted to it, is while he was mayor, he created a nonprofit. He called it a nonprofit. It's not clear exactly what it is. It's an organization that he set up that was run out of the Mayor's Office of Economic Development. And it was co founded with a Chinese billionaire who has ties to like the highest levels of the Chinese Communist Party. And his businesses are tied in with Chinese criminal gangs. His name's Vince Low. So that's who he founded this nonprofit with. And the goal was to recruit in Chinese business and investment. Right. But in effect, it kind of created a streamlined path for a lot of Chinese criminals and CCP officials to infiltrate California and buy up real estate, bribe government officials, pilfer intellectual property, things like this. And what's really shocking about it is that it was operating out of the mayor's office. It was housed at the Chamber of Commerce, but it had four satellite offices in China that operated as a part of this nonprofit. And they claimed to have brought in from 2008 to 2018, they claimed to have brought in 5.5 billion of economic impact to San Francisco. And they claimed to have also brought in thousands of companies. But what happened is many of the groups he brought in turned out to be run by criminals. And so for instance, one of these companies, I mean, there's multiple ones we talk about in the book, but one of them was a company called Oceanwide Holdings. It was a real estate company. But basically the owner of this company is a high level CCP consultant or operative. And he actually owned Oceanwide holdings and bought this property. They recruited through China SF bought all this property. Nothing's really happened on the property. There's been bankruptcies. But that was just one example of how an actual CCP official owned a company in California that was recruited through his nonprofit.

[John Bickley]

So this China SF supposed nonprofit that Newsom created is effectively a foreign national run organization, organization that's buying property in America through the governor's office. What was the rationale from Newsom's perspective for even starting this joint venture with CCP connected individuals? What would be his argument for this?

[Jed McPhatter]

They wanted to bring in Chinese companies, certain industries like green energy, solar companies, a lot of solar companies were brought in. Real estate companies was supposedly supposed to boost the economy and that type of thing. But it turned out that after it got started, for years, the primary funder of this nonprofit was Huawei, which is kind of known for working as a part of the united front with the Communist Party in China.

[John Bickley]

So Newsom is saying, look, I'm bringing in investment, I'm bringing in money for San Francisco that benefits ultimately California as a whole. What did you find in terms of any entanglements personally for him with any of these entities that he's working with?

[Jed McPhatter]

So there was a company named Z and L Properties is a real estate company that was owned by a former Chinese government official. So basically it was the same thing. It was recruited through China sf, and they've had the same kind of problems with a lot of these companies. They get started on a development, it never gets finished. Nobody knows where the money went. But this particular guy, his company was actually criminally sentenced to pay a million dollar fine for bribing close associates of Gavin Newsom. Right. He recruited him in, he ends up being criminally charged for bribing him. And also there's a picture in November, I think, 2017 where he takes a photo with China SF at ZNL Properties with his arms around some of the other employees there. And on that exact same day, he received over $20,000 in donation from this same company.

[John Bickley]

So this guy is charged for bribing associates of Newsom. Was there any backlash against Newsom for this?

[Jed McPhatter]

Well, there wasn't much backlash. A lot of people don't really realize how much he's been connected to or helped to create this nonprofit. But also, nobody's ever reported that he received this money from ZNL because it was given as an anonymous donation just from znl. So it's never been reported that he got this Money from this organization.

[John Bickley]

So you guys are breaking that element of this story, correct?

[Jed McPhatter]

Yes, we're breaking that element of the story.

[John Bickley]

What have we seen since this? Have we seen these continuing questionable relationships with Chinese entities?

[Jed McPhatter]

Yes, in fact, China sf, what he did was when he became lieutenant governor, one of the last things he did as mayor is he wrote a statement where he said that he was going to embed the China SF model into state level trade office. And it did. Now it's embedded within the state. It's called Go Biz, I think is the name of it. But it's basically their kind of trade office. So it's still there. He's brought it along the whole way. And here's the thing that really got me about this case with China SF is that they gave him various incentives to come. Right, all kinds of things to draw him. And one of the things he actually says when he's talking about this program is you will never have to deal with the bureaucracy. He's talking to the Chinese companies and he says, we will carry your permits through the entire bureaucracy. And to me, that's just very shocking when you consider like, California is notoriously difficult to get construction jobs done. These big real estate projects, you've got to pay permit consultants to expedite it and everything. And a lot of these permit consultants get busted in these big schemes, fraud schemes that have taken place. And so in effect, Gavin Newsom and China, Seth, kind of acted as like permit expediters for Chinese companies. Yet us, you know, California developers, they didn't get this same deal. To me, that's pretty shocking.

[John Bickley]

Yeah, it is. And it's highlighted even now in the aftermath of these fires that Susan's just talked about. We've seen the struggles of a lot of private citizens in California, but also entities that are trying to rebuild with all the red tape in California. Now, another explosive topic that you guys dug into is how Newsom's handling of the prison system came to a head during the COVID 19 lockdowns in the state. Can you explain what exactly happened there?

[Susan Crabtree]

So Gavin Newsom is under Supreme Court order to do something about the prison overcrowding in California. That was a Supreme court decision from 2011. But instead of building more prisons, he wants to empty out the prisons. So he found a very, very good excuse in Covid. So there was all this concerns in the nursing homes that Covid was spreading rapidly, and that was true, but they had much less of a problem in the prisons. But Gavin Newsom said, we want to make sure. There's not some kind of death spiral going on in our prison system. And therefore we're going to let 70,000 prisoners out for early release. Now, what I'm told by a whistleblower who was a top official in the prison system, he said he recommended against that to Newsom. He said, actually the COVID rates inside the prison are far less than outside in the community, so there's no reason to release these. Some of them were violent criminals. And nope, Newsom went ahead. He did not abide by that advice. He said it doesn't matter. He told the public that's the reason why they were doing it. And these tens of thousands of prisoners were released. And guess what? Then we had a huge smash and grab problem at businesses across the state. And you can't even go into a drugstore in California without having to ask for your conditioner to be unlocked because it's behind locked cases. And this is who we have to blame for it. He saw no connection there between the smash and grabs. He's never mentioned it. That they might be connected to the prisoners who released during COVID It's shocking.

[John Bickley]

That this is not a massive scandal. One more question about Newsom. His approach to transgender policies he's now trying to reverse a bit in terms of at least males in female sports. He's launched a new podcast. He's trying to tack right from his far left positions. But what's the truth there? How has he actually handled the transgender issue as governor and lieutenant governor?

[Susan Crabtree]

So in 2013, he supported the law that legalized trans athletes participation in girls in high school and women's sports in college. So he was asked by Ro Khanna over the weekend whether he was going to reverse that policy. I also asked his office afterwards whether he was going to reverse any policies. And they just pointed me to the comments with Charlie Kirk and highlighted in yellow his concern about the vulnerable citizens, the vulnerable trans people, that they're susceptible, higher to susceptibility to suicide. But his comments were just so glib.

[John Bickley]

Yeah, that interview on Newsom's new podcast really made a lot of news. Let's listen to that exchange between the governor and Charlie Kirk.

[Jed McPhatter]

So, like, you right now should come out and be like, you know what? The young man who's about to win the state championship in the long jump in female sports, that's that. That shouldn't happen. You, as the governor, should step out and say, no, no, and I appreciate, but, like, would you do something like that? Would no men in female sports? Well, I think it's an issue of fairness. I completely agree with you on that. So that's easy to call out the unfairness of that. There's also a humility and grace. You know, that. That these poor people are more likely to commit suicide, have anxiety and depression. And the way that people talk down to vulnerable communities is an issue that I have a hard time with as well. So both things I can hold in my hand.

[Susan Crabtree]

But meanwhile, in 2022, he had declared the state of California a trans sanctuary state, meaning that anybody who. Where other states were outlawing trans surgery or trans medical care, they could come and of course, they would not be prosecuted in California. So, no, he has no plans to reverse those policies. He has no plans to overturn the transgender athlete rule in the state. California is one of 24 states where that is legal. So it's all performative. He says things he doesn't really mean. He talked about in the Charlie Kirk podcast that it's the mask you live in, which is, interestingly enough, one of the titles of his wife's gender justice films talks about how he feels that you fill into the mask. You live in a mask and you keep getting promoted to new positions and you just fill in the mask. You become the person that the people want you to be or that your base wants you to be, but you. You have no internal convictions. That's what it seems to be saying. And that's a perfect description of what I view and what we've found that Gavin Newsom has been portraying for years.

[John Bickley]

Quite a mental image there. Well, Susan and Jed, congrats on your new book, and thank you so much for joining us.

[Susan Crabtree]

Absolutely. Take care.

[Jed McPhatter]

Thanks, John.

[John Bickley]

That was Susan Crabtree and Jed McPhatter discussing their new book, Fool's Gold. And this has been a weekend edition of Morning Wire.