Kounalakis vows blind belief for property if elected governor

By Alexei KoseffCalMatters

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Lt. Gov. Eleni Kounalakis, who earns thousands and thousands of {dollars} yearly from in depth property investments across the Sacramento area and past, says she is going to put a few of her holdings right into a blind belief if she is elected governor of California.

The dedication follows an inquiry from CalMatters to Kounalakis, who’s working for governor in 2026. In response to monetary disclosures, her portfolio contains downtown Sacramento workplace buildings that hire to dozens of organizations with enterprise earlier than the state and a minimum of three state companies.

“If elected governor, the LG commits to placing any assets that may present a conflict of interest into a blind trust,” David Beltran, a spokesperson for Kounalakis’ marketing campaign, mentioned in a press release.

Which of these property can be transferred to the blind belief and the way Kounalakis would decide what constitutes a battle of curiosity, nonetheless, stays unclear. Her marketing campaign declined to make Kounalakis accessible for an interview and didn’t reply questions looking for extra element about her plans.

California’s battle of curiosity guidelines disqualify public officers from taking part in governmental selections that may foreseeably have an effect on their private funds, although there’s an exception if the potential impact on the official’s pursuits is indistinguishable from the impact on the general public.

It may be notably knotty for a governor to navigate, as a result of they take care of every thing within the state, mentioned Jessica Levinson, a professor at Loyola Legislation College and former president of the Los Angeles Ethics Fee. “You can imagine any investment raising a question, big or small.”

Levinson mentioned the blind belief affords a center floor of walling off politicians from potential conflicts of curiosity as a lot as potential with out the “draconian” step of forcing them to dump their holdings.

Gov. Gavin Newsom positioned his enterprise holdings in a blind belief after he was elected in 2018, relatively than promoting the multimillion-dollar assortment of wineries, eating places, bars and a resort. Beneath this association, Newsom transferred management of the Plumpjack Group to a household good friend, who’s barred from discussing her administration selections with the governor. He later signed an government order prohibiting all government department companies from getting into into enterprise preparations with any a part of the Plumpjack Group.

Prime Sacramento actual property

Kounalakis is the daughter of the highly effective Sacramento actual property developer Angelo Tsakopolous and he or she labored for the corporate he based, AKT Growth Company, for practically twenty years earlier than then-President Barack Obama appointed her ambassador to Hungary in 2010. Her husband, overseas affairs scholar and author Markos Kounalakis, is now a director of AKT Growth Company and the affiliated AKT Investments, Inc.

Since she was elected lieutenant governor in 2018, Kounalakis has yearly accomplished required statements of financial pursuits laying out her investments, actual property holdings and different sources of earnings. She has not positioned these property in a blind belief.

The most recent kind, filed in February for her 2024 funds, lists possession stakes in workplace buildings, farm and grazing land, photo voltaic fields, a car parking zone and undeveloped properties throughout Northern California and the Central Valley, in addition to within the Tsakopoulos Household Partnership, which has extra constructing and land pursuits.

Three of the buildings from which Kounalakis attracts substantial earnings are situated within the industrial hall across the state Capitol the place curiosity teams, lobbyists and others with enterprise in state authorities focus their operations.

Kounalakis is a accomplice in Meridian Plaza, an workplace constructing throughout the road from Capitol Park in downtown Sacramento. She obtained a minimum of $10,000 in hire final yr from 34 completely different tenants of the constructing, in line with her monetary disclosure, most of them lobbying companies or teams that foyer the state authorities.

These embrace commerce organizations representing car producers, insurance coverage firms, strawberry growers, beer distributors and the oil business, in addition to Microsoft, PG&E, Verizon and the tobacco producer Altria. No less than two state companies, the Division of Public Well being and a department of the Division of Common Providers, even have workplace area there.

Subsequent door, one other workplace constructing during which Kounalakis is a accomplice had half a dozen main tenants final yr, together with The California Endowment, a non-public basis that advocates for increasing well being care entry; Rescue Company, which works on public well being campaigns with state departments; and Sikich, a agency that gives expertise companies to authorities.

Via the Tsakopoulos Household Partnership, Kounalakis receives rental earnings from One Capitol Mall, one other workplace constructing down the road from the state Capitol, together with a minimum of $10,000 final yr from the College of California’s governing board. Kounalakis sits on that board in her capability as lieutenant governor.

Beltran harassed that Kounalakis is a minority proprietor in all her enterprise investments and isn’t concerned within the day-to-day operations of the properties. He didn’t clarify why she would use a blind belief as governor if she didn’t really feel the necessity to take action as lieutenant governor.

“The lieutenant governor has taken measures to ensure that any assets she owns do not impede her work as lt. governor,” Beltran mentioned. “She will do the same as governor.”

‘That’s cash in her pocket’

John Pelissero, the director of presidency ethics at Santa Clara College’s Markkula Heart for Utilized Ethics, mentioned it might have been prudent for Kounalakis to take steps as lieutenant governor to distance herself from these property, despite the fact that she usually doesn’t vote on or signal laws associated to her purchasers.

“If she’s benefiting financially from lobbying, then the optics of it are troubling. It would be reasonable for any member of the public to look at that and say, ‘that’s odd,’” Pelissero mentioned.

He mentioned the usual might be even larger if Kounalakis is elected governor and beneficial that she then put her investments right into a blind belief managed by an unbiased trustee that does not have any communication along with her.

As governor, Kounalakis would even be ready to direct state companies to lease workplaces at properties the place she has an possession stake.

“That’s money in her pocket,” mentioned Tom Hiltachk, a political and election lawyer whose agency helped arrange Arnold Schwarzenegger’s blind belief when he turned governor in 2003. “She has to find a way to deal with that conflict.”

However Levinson mentioned there’s a low danger of conflicts of curiosity with the organizations that hire area in Kounalakis’ properties, as a result of they’ve extra direct methods of making an attempt to curry favor with a governor, akin to contributing to her marketing campaign. Levinson added that she can be extra involved about Kounalakis adopting insurance policies that profit California landlords than making selections that serve the tenants in her buildings.

“We’re just trying to make sure someone in a position of public trust is serving the public, not themselves,” Levinson mentioned. “For my ear, her response is much better than somebody who says, ‘not to worry’ or ‘you can trust me’ or ‘let them come after me if they think there’s a problem.’”

Kounalakis earned a minimum of $1.39 million — and sure way more — from her investments final yr, in line with a CalMatters evaluation of her assertion of financial curiosity. Revenue from every holding is reported in a spread, as much as “over $100,000.”

Along with the hire from Meridian Plaza, which topped $340,000, Kounalakis reported greater than $253,000 in earnings from different properties the place she owns a share better than 10%, together with vineyards and row crop farms in Yolo County, grazing land in San Joaquin County, conservation credit in Placer County and a car parking zone in downtown Sacramento. She and her husband have a small possession of lower than 10% in photo voltaic fields and grazing land in Santa Nella, which introduced in additional than $121,000 final yr.

The Kounalakises even have a minority curiosity within the Tsakopoulos Household Partnership, from which the lieutenant governor reported greater than $574,000 in earnings final yr from Sacramento workplace constructing hire, a lease to an almond and rice farm in Placer County, the sale of an easement to the Placer Land Belief, a distribution from a Mill Valley restaurant and different investments.

The assertion of financial curiosity additional requires public officers to report their spouses’ earnings. In response to the lieutenant governor’s monetary disclosure, Markos Kounalakis earned greater than $147,000 from his stake in an funding belief linked to the Tsakopolous household, greater than $20,000 from serving as a director of AKT Investments, Inc., and as a political science lecturer at Stanford College, and fewer than $1,000 from his minority possession of a podcast firm and a ship.

This text was initially printed on CalMatters and was republished underneath the Inventive Commons Attribution-NonCommercial-NoDerivatives license.