California Courier

Republicans Investigate Newsom’s Ties to Billionaire Panera Franchisee Exempted from Fast Food Wage Hike

Assembly Bill 1228 includes a peculiar, seemingly arbitrary exemption that creates a conspicuous carve-out for one of Newsom’s biggest donors.

California Governor Gavin Newsom is once again in the hot seat for accusations of political corruption following the enactment of Assembly Bill 1228. The bill, authored by Democrat Assemblyman Chris Holden (AD-41), raises fast-food workers’ minimum wage to $20 per hour and will take effect beginning April 1, 2024. 

Aside from the obvious criticism that the wage spike will undoubtedly drive prices up at a time when low-cost foods are already experiencing rapid inflation, the bill includes a peculiar exemption for fast food establishments that operate bakeries—a provision that conspicuously spares Panera Bread from the new mandate.

The connection between Newsom and Greg Flynn, a billionaire investor who owns two dozen Panera Bread locations in California and is a known donor to Newsom’s campaigns, has raised eyebrows and prompted media scrutiny. The curious exemption has been met with overwhelming criticism, with opponents arguing that it undermines the spirit of the law, creates an uneven playing field for fast food establishments, and, most importantly, may very well constitute an instance of flagrant corruption.

Republican legislators such as Assemblyman Joe Patterson (AD-5) are now calling for a thorough investigation into Newsom’s ties to billionaire franchisee and the specific exemption for Panera Bread. Patterson even suggested that the situation may warrant the attention of the Federal Bureau of Investigation since the Democrat supermajority cannot be trusted to investigate itself. 

“Can any franchisee get an exemption from the $20 minimum wage law or do they need to donate more than $150k to Newsom first?” asked Assembly Minority Leader James Gallagher (AD-3). “This crooked deal needs to be investigated.”

Furthermore, the law establishes the seemingly arbitrary date of September 15, 2023 as a retroactive cutoff point for distinguishing which business the law would apply to.

“My initial thought on this was that fast food chains should start baking bread. But the carve out prohibits that too,” said Assemblyman Josh Hoover (CA AD-7). “The Governor is willing to crush small businesses as long as they aren’t his friends and political donors. Absolutely ridiculous.”

The reason as to why baking bread should exempt one establishment from having to abide by a new minimum wage requirement remains unclear. Both Newsom and Holden have shirked the issue when questioned. 

When confronted about this during a news conference, Newsom responded with a dismissive “that’s part of the sausage-making.” However, both Newsom and Flynn personally pushed for the carve-out, according to Bloomberg, with the billionaire donor directly “[urging] the governor’s top aides to reconsider whether fast-casual chains such as Panera should be classified as fast food.”

“I inherited the bill, so the fundamentals of the bill were in place when I took the bill over,” argued Holden in an interview with KCRA’s California Capitol Correspondent Ashley Zavala.

“But, respectfully, when you took over the bill, the exemption was not in there,” Zavala responded. “The exemption was placed in the bill in the final weeks of the legislative session when you were carrying it. So were you part of the negotiation to include that exemption?”

“No, I was not,” Holden claimed. 

Regardless of what an investigation into the matter reveals, the optics of AB-1228 have been nightmarish for Newsom and California Democrats. Many have taken to social media to express their discontent and spotlight the political corruption that is made possible under a veto-proof single party supermajority.

“We need to break up the super majority. This is why,” said David Hermann on Twitter. “If you hate Republicans, fine. Elect independents. This one party rule is absolutely killing our state.”

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