Capitol Alert

This millionaire might be California’s next governor. How Gavin Newsom got connected

Gavin Newsom shows off his ‘mop sink’

Gavin Newsom, the leading candidate for California governor, displays a sink for used for mopping that city inspectors made him install at the wine shop he opened in the early 1990s before his political career began.
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Gavin Newsom, the leading candidate for California governor, displays a sink for used for mopping that city inspectors made him install at the wine shop he opened in the early 1990s before his political career began.

Up a narrow staircase above his wine shop, Gavin Newsom glides across the cramped office before making his way to its showpiece.

Off to the side sits a mop sink that city inspectors made him install even though he argued the floors were carpeted.

“I fought this, and lost,” said Newsom, the state lieutenant governor and frontrunner to succeed Gov. Jerry Brown next year. The 49-year-old Democrat raises one arm and grins, defiantly. “When you fight bureaucracy, make sure you have money and patience – and I didn’t have either.”

What Newsom lacked in poise and prosperity at the time he made up for in hustle and capitalizing on connections.

Newsom opened the wine shop in 1992 with the financial backing of family friend and oil fortune heir Gordon Getty. Newsom’s father, a classmate and close adviser of Getty, urged another prominent friend, John Burton, to recommend then-Mayor Willie Brown to appoint him to a vacant seat on the Board of Supervisors.

A fourth-generation San Franciscan who grew up around politics, Newsom said he still envisioned the life of an entrepreneur. But at just 29, the allure of citywide issues slowly began to win out.

As mayor, Newsom became nationally recognized for ordering the distribution of marriage licenses to same-sex couples. And the shop with the mop sink upstairs, PlumpJack Wines, grew into a line of successful restaurants, hotels and wineries managed by Newsom’s sister, Hilary.

Yet the early hand he received in politics and business continues to form the basis of criticism against him. Newsom’s opponents in the mayor’s race painted him as privileged and out of touch. In the gubernatorial contest, former Los Angeles Mayor Antonio Villaraigosa and Treasurer John Chiang, both Democrats, are beginning to do the same.

Villaraigosa dismisses Newsom as a “Davos Democrat,” after the town in the Swiss Alps that hosts a grand summit of world politicians, business leaders and celebrities and other elites. Chiang took a backhanded swipe by noting that he wasn’t born into a family with “wealth or big connections ...”

In the interview above the wine shop, Newsom conceded he wouldn’t be in politics without Burton and Brown.

They took a risk on me.

California Lt. Gov. Gavin Newsom

“I hopefully would be with the Wine Spectator today; not you,” he said in a reference to the lifestyle magazine with an affluent and influential readership. “I would never be in politics. But they took a risk on me. And I know Willie wouldn’t have done it unless John encouraged him.”

He believes it’s his founding of PlumpJack that gets to his essence. The wine-shop experiences framed what he describes as an “entrepreneurial bias.” Along with ordering the gay marriages, he led a program to replace cash subsidies for homeless with housing and support services – along with the nation’s first universal healthcare system. Later, Newsom promoted a statewide initiative legalizing marijuana for adults after being the only statewide official to endorse a measure reducing certain low-level crimes to misdemeanors.

“A willingness to take risks – not be reckless – is a consistent meme whose origin started right here,” he said. “It’s literally laid the foundation for the way I think politically.”

Founded by Newsom, the Gettys and a small group of investors, PlumpJack Wines was named and designed after the opera Gordon Getty wrote based on the portly, wine-drinking Shakespeare character Sir John Falstaff. “Alrighty, man!” Newsom recalled the philanthropist and composer saying in dramatic fashion when they settled on the name.

Gordon Getty’s initial investment in PlumpJack was 9 percent. He invested in PlumpJack Cafe and the Balboa Cafe, also in the city’s Cow Hollow neighborhood, and in businesses that followed.

His interest was born of a special bond between the families. Newsom’s father, retired state appellate Judge William Newsom, went to St. Ignatius with the sons of oil tycoon J. Paul Getty. The elder Newsom managed Gordon Getty’s family trust, and helped deliver the ransom money after the 1973 kidnapping of J. Paul Getty’s grandson, a case that vaulted it higher in international headlines when the captors cut off the teenager’s ear and mailed it to a Roman newspaper. In 1983, after becoming sole trustee, Forbes magazine ranked Gordon the richest American, with a net worth over $2 billion.

In addition to investing in the businesses, a Getty trust paid Gavin Newsom for investment advice, and Gordon and Ann Getty provided gifts and loans for his home, according to reports and disclosures. They paid about $233,000 toward his first wedding reception. His thirtieth birthday party, given by the Gettys, was Great Gatsby-themed, down to the flappers and Charlestons. Newsom bid adieu to his Roaring Twenties as Alphonse, the Gettys’ chef, reportedly prepared sushi, lamb chops, mashed potatoes, asparagus and a fish pasta.

Gordon Getty declined an interview request to speak about Newsom and PlumpJack’s early days.

Newsom described his experiences with the early businesses as brutal. He admits he didn’t know what he was doing. His improvised desk was fashioned from wine boxes with a door laid over the top. He remembered driving to Costco for a large fan after arriving one morning to find that the lack of an air conditioner and awning caused roughly $40,000 in wine to explode from the heat. Newsom said he had to tap the equity on his condominium to pay for inventory. Another time, a pipe burst and the shop flooded.

Along with childhood friend William Getty, Gordon’s son, they tasted most of the wines themselves, offered 100 different bottles for under $10 each and matched anyone’s prices in an effort to “demystify” the wine-buying experience. Newsom did deliveries while emulating popular brands: Southwest Airlines, the Body Shop and Virgin Group, led by Richard Branson, the British adventurer involved in commercial space travel. Inspired, Newsom compiled a booklet for employees challenging them to set “big, hairy audacious goals,” to take risks and be willing to fail. “... We are dispensers of enthusiasm,” it says.

At the cafe, they sold wine at retail prices, featured interesting design and brought in acclaimed chef Arnold Rossman. The 49-seat neighborhood restaurant took off. “All of a sudden it was like we were experts,” Newsom said. When Rossman left after just nine months, the cafe stayed relevant by scoring mentions in society pages that typically included mentions of Newsom and the Gettys.

They took over the lease at the Balboa after a partnership disagreement. Newsom spent his days at the wine store and his nights at the restaurants as a sommelier.

He was hustling.

Joe Cotchett, PlumpJack investor and Burlingame trial lawyer

“That was his life at the time. He was hustling,” said Joe Cotchett, the Burlingame trial lawyer and a PlumpJack investor. “He was trying to do what he could. He was a young, good-looking guy who ran around with Billy Getty. Do you have to say more than that?”

Outside the city came PlumpJack winery in Napa County and PlumpJack Squaw Valley Inn. Newsom had real estate investments, and later opened the MatrixFillmore bar along with more wine and retail shops. In a rare interview focused mostly on his music, Gordon Getty told the San Francisco Chronicle in 1995 that he didn’t buy the Squaw Valley Inn in 1986 to make money.

“I hoped that it would stay in the dark grays and it has,” he said. “These live wires (referring to his son Billy Getty, then 24, and Newsom) are going to make it make money.”

Kimberly Guilfoyle, Newsom’s wife at the time, described a man steeped in minute operations of the businesses. His mother, Tessa, kept the books while he recruited his sister, Hilary, who had worked in fashion in Milan, Italy, and New York, to come to PlumpJack. Newsom’s cousin, Jeremy Scherer, started out doing summer deliveries and now is co-president and partner with Hilary.

Newsom is “an amazing ‘ideas guy’ in terms of having an idea, developing it and seeing it to fruition,” said Guilfoyle, who co-hosts Fox News Channel’s “The Five.”

“He was literally deciding – working on everything from food selection and menus and all of the personnel decisions,” she said. “He can compete with anybody in, as we call them, a brown-bag (wine-tasting) contest to be able to tell you what varietal, what area and region it’s from, what vintage ... I remember, at Christmas time, Gavin was sweeping the sidewalk outside the cafe.”

I remember, at Christmas time, Gavin was sweeping the sidewalk outside the cafe

Kimberly Guilfoyle

Newsom said he wrote the business plans, and, after the cafe paid back its partners more than four times, others wanted in on their next venture. Robert M. Parker Jr., of the Wine Advocate, awarded 95 points to a PlumpJack cabernet sauvignon. PlumpJack’s 1997 reserve cab, priced at $135 per bottle, became the first luxury wine to feature a screw cap instead of a cork.

“All of a sudden people would say, ‘Hey, my buddy is invested in this. Let me know about the next thing,’” Newsom said.

His annual income from 1996 to 2001 topped $439,000 a year, according to tax returns he provided to the Chronicle during the mayoral run. More recent tax forms reviewed by The Sacramento Bee show Newsom averaged $1.45 million a year from 2010 to 2015. He earned $1.72 million in 2015, including nearly $800,0000 from Airelle Wines, a winery corporate structure.

Newsom receded from daily operations as his ambitions grew, though he’s still involved in major strategic decisions. He recently told a group outside Modesto he’s the only candidate for governor with “actual experience creating jobs. “I actually am very proud to have hundreds of employees in this state. We have 20-plus businesses in this state. I started right out of college, opening a little wine store.”

Politics, Guilfoyle said, was something that developed over time and took its own natural progression. He helped out with former Assembly Speaker Willie Brown’s mayoral campaign, and traveled with Billy Getty and an entourage to the opening of an Amtrak station in Brown’s hometown of Mineola, Texas. Brown then appointed Newsom to the Parking and Traffic Commission, before naming him supervisor in 1997.

Newsom’s informal introduction to politics came much earlier.

A year after he was born, his father ran for state Senate against Republican Milton Marks, appearing on the 1968 ballot along with Burton and Brown, who were both serving in the Assembly. The elder Newsom’s father, William A. Newsom, was a close confidante of former Gov. Edmund G. “Pat” Brown and worked on President Harry Truman’s 1948 election campaign.

Gavin’s father, connected, but not wealthy, lived in Placer County after he and Tessa divorced. He would take his son to North Beach Restaurant to see the likes of Jerry Brown, state senator and retired judge Quentin Kopp, former San Francisco Mayor George Moscone, ex-Supervisor Ron Pelosi (House Democratic leader Nancy Pelosi’s brother-in-law; and Gavin’s uncle) and Burton and Brown. Gavin Newsom vacationed with the Gettys to places like Africa and Hudson Bay, giving him glimpses of the world he wouldn’t have accessed otherwise.

Struggling with severe dyslexia, he grew up mostly with his mother in San Francisco, holding down a paper route, putting in time as a busboy and later working construction, his sister recalled. Their mother took in foster children and rented a bedroom to boarders (Hilary recalled the “creepy guitar-playing guy” and the single mom with her son). Tessa worked many jobs, often several at once: as a waitress at Ramona’s, a secretary, bookkeeper and assistant buyer at I. Magnin department store.

Nothing was handed to us, ever.

Hilary Newsom

Newsom’s drive, “that doesn’t come from a life of leisure. We had good people that instilled hard work in us – and it was lead by example,” Hilary Newsom said. “Nothing was handed to us, ever. People can believe it, or not, but it was never handed to us.”

While the Newsom and Burton families knew each other for decades, Tessa worked as an office manager and paralegal for a law office with connections to Burton, the former congressman, legislative leader and state Democratic Party chairman. Burton attended Newsom’s high school basketball games and was impressed with how he dove on the floor for loose balls. He said he’d see the younger Newsom out at restaurants wearing worn-out jeans and a broken-in baseball hat.

Burton was approached to become an early investor in PlumpJack, but said he passed and got in later at a lower level. When his daughter got married, they bought the wine from Newsom, and he personally “schlepped the wine over in a (expletive) station wagon. It kind of impressed me.”

As Newsom ascended in politics, wearing suits and slicking back his hair, Burton advised him to downplay his increasing wealth: “I used to tell him, ‘Go get that old greasy baseball cap and those old jeans and walk around a while and let people see it.’ ”

Christopher Cadelago: 916-326-5538, @ccadelago

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