CALIFORNIA AND CRASHING CRYPTO:Gov. Gavin Newsom opened California’s arms to the cryptocurrency industry earlier this month with an executive order that he issued citing the emergency powers he gained during the pandemic.
A week later, crypto was in meltdown mode.
- The stablecoin TerraUSD lost its peg to the dollar and its linked cryptocurrency Luna crashed to worthlessness.
- Bitcoin slid to less than $30,000, a far cry from its November peak of more than $68,000.
- All told, the crypto markets have seen $500 billion vanish over the past month.
Crypto skeptics in Sacramento and beyond said: I told you so.
Regardless of how the digital money markets sort out — or don’t — from here, Sacramento’s web3 and cryptocurrency debate is simmering behind the scenes as some lawmakers aren’t entirely happy with what’s seen as a pro-industry signal from the governor. Newsom’s pro-industry signal Newsom’s executive order sends.
In the order, Newsom declares that California will work in tandem with President Joe Biden’s federal push to explore crypto and blockchain — to build stability for the market and a regulatory scheme for consumers.
It’s worth noting that California has lagged behind other states like New York on taking proactive regulatory measures and staking ground on crypto policy.
The Legislature itself has stayed conservative about crypto, killing two proposals this year that would have broadly expanded use of digital currency — including in state operations, as Newsom’s order directs the state to explore.
There are two main players appointed by Newsom’s executive order to plot out the state’s crypto path:
— The governor’s Office of Business and Economic Development, or GO-Biz, which is all about attracting and keeping business in California.
— The state’s Department of Financial Protection and Innovation, a newly rebranded consumer-protection bureau charged with —safeguarding financial laws, handling complaints, and educating Californians about risks.
When asked about the recent market drama, both agencies stayed coy.
The governor wants to “explore opportunities for new technologies to improve government services,” GO-Biz spokesperson Heather Purcell replied in a statement, adding that recent market events “underscore the need for this work.”
A DFPI spokesperson echoed Purcell’s response, saying: “Current market fluctuations underscore the need for the DFPI’s work to continue as planned.”
Meanwhile, consumer advocacy groups are wary. Robert Herrell, executive director for the Consumer Federation of California, said his group worries the executive order, and especially GO-Biz’s role in it, “ventures dangerously close to cheerleading when caution and consumer protection should be the focus of California.”
HAPPY TUESDAY AFTERNOON! Welcome to California Playbook PM, a POLITICO newsletter that serves as an afternoon temperature check of California politics and a look at what our policy reporters are watching. We’ll go Monday to Thursday through June 9 before returning in August for the legislative homestretch. Got tips or suggestions? Shoot an email to [email protected] and [email protected] or send a shout on Twitter. DMs are open!
ELEMENTARY SCHOOL MASSACRE: An 18-year-old killed 14 students and one teacher at a small-town Texas elementary school this morning, the state’s Gov. Greg Abbott confirmed today. The suspect is dead, believed to be killed by the officers who responded. The governor added that the alleged shooter carried a handgun and possibly a rifle as well.
The massacre at Robb Elementary School in Uvalde, Texas, happened shortly before the California Senate approved a measure to make school officials and police investigate threats of mass violence as well as a Newsom-backed bill to make gun manufacturers and distributors liable for shootings, modeled on Texas’ abortion ban. (More on both of these below.)
Newsom, who has pitted California against Texas in his push for tighter gun control, tweeted soon after Abbott’s announcement and blamed Republicans for the tragedy. “Another shooting,” he wrote. “And the GOP won’t do a damn thing about it.” He added: “This is preventable. Our inaction is a choice,” as he called for “comprehensive” federal legislation.
GUN CONTROL: State senators today passed a bill creating a private right of action against gun manufacturers and distributors, modeled on Texas’ abortion ban. Senate Bill 1327 by Sen. Bob Hertzberg (D-Van Nuys) now heads to the Assembly for a vote before it can get the governor’s signature. — Lara Korte
SCHOOL VIOLENCE: School officials and police would have to investigate any threat or “perceived” mass shooting threat under legislation that cleared the California Senate today. The vote nearly coincided with the elementary school massacre in Texas.
Senate Bill 906 by Sen. Anthony Portantino (D-La Cañada Flintridge) says local leaders in middle and high schools would have to immediately report threats of “an incident of mass casualties” to police, who would then have to follow up on those leads.
His bill cleared easily on a party-line vote, pulling unanimous support from Democrats, and now moves to the Assembly. But ACLU California has argued that the “extremely broad definition of ‘threat or perceived threat’” would in some cases subject students “to the well-documented harms caused by contact with law enforcement.” — Blake Jones
LABOR RIGHTS FOR #CALEG — Lawmakers gathered outside the Capitol this morning to promote a renewed effort to allow legislative staffers to collectively bargain for terms of their employment. It’s a repeat of past attempts to legalize the practice, which proponents say should be the standard in such a labor-friendly state.
Assemblymember Mark Stone (D-Santa Cruz) is carrying the bill, along with 31 coauthors. Stone has dropped the labor proposal into an unrelated bill, AB 1577, which is now in the Senate. “We need to trust our workers and give them the same opportunities and the same rights and the same empowerment that we demand of other employers around this state,” Assemblymember Ash Kalra (D-San Jose) told reporters today. — Lara Korte
MONKEYPOX MESSAGING: Health officials today reported California’s first suspected case of monkeypox in a Sacramento County patient recently returned from abroad. But the immediate message from public health experts was that the risk is low for the general population.
Monkeypox is not anywhere close to being as transmissible as Covid, as it spreads through close skin-to-skin contact, and it is not a novel virus (it was first identified in humans in 1970). But there has been an alarming rise in cases in countries that had previously had virtually no history of the disease, including the United Kingdom, Spain and Portugal. State Epidemiologist Erica Pan is “promoting awareness amongst healthcare providers and the public,” including appropriate infection control in health facilities. The CDPH also just set up a new monkeypox resource page. So while panic isn’t warranted, caution clearly is. — Victoria Colliver
Compiled by Juhi Doshi
“UC pays record $700 million to women who accused UCLA gynecologist of sexual abuse,” by the Los Angeles Times’ Richard Winton: “The University of California system agreed Tuesday to settle lawsuits brought by hundreds of alleged victims of a former UCLA gynecologist, bringing total litigation payouts to nearly $700 million, the largest ever related to sexual abuse involving a public university.
The latest $374.4 million in settlements covers 312 former patients who sued alleging they were abused by Dr. James Heaps under the guise of medical examinations between 1983 and 2018.”
“SEIU California notches election win on CalPERS board with $240,000 in spending,” by Sacramento Bee’s Wes Venteicher: “A candidate backed by the Service Employees International Union has won election to the CalPERS board, marking the third victory by an SEIU-backed candidate in less than a year.
Mullissa Willette, 39, a tax exemption investigator with the Santa Clara County Assessor’s Office, won by a sizable margin with support from several branches of the powerful public employees’ union, according to unofficial CalPERS election results.
Willette received 62% of the vote, defeating Richard Fuentes, a Bay Area Rapid Transit special projects manager, according to CalPERS results posted online last week. Current employees of local governments with CalPERS-administered benefits could vote in the election, and 12,990 of them did so.”
— The FBI has alleged Anaheim’s Mayor destroyed Angel Stadium recordsto hide from an Orange County grand jury. (Voice of OC)
— House Speaker Nancy Pelosi haschallenged the San Francisco archbishop’s decision to deny her communion. (SF Chronicle)
— A woman in San Clemente has accepted a plea deal forher role in the breach of the U.S. Capitol on January 6th. (OC Register)
