Everything you need to know about ‘Paneragate,’ Gavin Newsom’s latest controversy

Good morning and welcome to the A.M. Alert!


By now, you’ve probably heard at least a little about California Gov. Gavin Newsom’s latest controversy. But let’s sum it up, just in case.

AB 1228, which gives most California fast food workers a $20 minimum wage, has a curious carve-out for restaurants that “operates a bakery that produces for sale on the establishment’s premises bread.”

In other words, fast food franchises that produce their own bread are exempt from paying their workers the new minimum wage.

Bloomberg News was the first to report that this carve-out appears to benefit one franchise in particular, Panera Bread, though a couple of others also would be included, according to that outlet.

According to Bloomberg, Newsom fought for that exemption to be included in the final form of AB 1228.

That’s notable because billionaire franchisee Greg Flynn, who owns two dozen Panera Bread restaurants in California, is an old Newsom buddy and also a mega-donor to Newsom’s campaigns for reelection and to defeat the 2022 recall attempt.

So is this pay for play?

Republicans certainly think it is.

“Campaign contributions should not buy you exemptions in legislation. The public deserves to know the truth about the allegations of Governor Newsom’s crony capitalism,” Senate Minority Leader Brian Jones, R-Santee, said in a statement.

Assembly Republican Leader James Gallagher, R-Yuba City, blasted Newsom for what he described as shaking down special interests and then using his office “to set them up with favors at the expense of regular Californians.”

“This type of crooked dealmaking is wrong and exactly why our constituents think the government isn’t looking out for them,” Gallagher said.

Republicans have called on Attorney General Rob Bonta to open an investigation.

But Newsom’s office last week pushed back hard on the story. Per Newsom spokesman, Alex Stack, “The Governor never met with Flynn about this bill and this story is absurd. Our legal team has reviewed and it appears Panera is not exempt from the law.”

As The Bee’s Lindsey Holden reported last Friday, Newsom’s team based its argument that Panera is not exempt on the word “produce.”

Essentially, since Panera doesn’t make its dough on-site (though they do bake their own bread), the exemption doesn’t apply. Or so the governor’s argument goes.

That’s big, if true. But it remains to be determined whether that is the case, and the raise doesn’t go into effect for another month.

It also remains to be seen whether this political blunder, possibly the biggest since Newsom’s infamous French Laundry meal, will take a toll on the governor’s already sagging poll numbers, especially with another recall effort in the works.


Tomorrow is Election Day in California, and the fate of the sole measure on the ballot, Proposition 1, is a coin toss.

A new poll from the Berkeley Institute of Governmental Studies found that just half of likely California voters support the measure, which would restructure the state’s Mental Health Services Act and authorize a $6.4 billion bond to be used for homeless housing and mental health and substance abuse treatment.

The poll shows that slightly more than a third (34%) of voters say they’re a hard no on the ballot measure, while 16% remain undecided.

In a statement from Berkeley IGS, for that many voters to be undecided this close to an election is not a good thing for Prop. 1, “as, historically, most undecided voters in the late stages of a bond campaign tend to vote No.”

As is often the case, party tends to dictate whether someone supports or opposes the measure. Democrats were more likely to support it, with 70% saying they would vote yes, while Republicans were the opposite, with 63% saying they would vote no.

No Party Preference voters were on the fence, with 49% saying yes and 36% saying no, with another 15% undecided.

Independent voters could be the difference maker this Tuesday, but will they save it? Or slay it?

Berkeley IGS polled 6,536 registered voters for the survey, including 3,304 who had already voted or were likely to, between Feb. 22 and Feb. 27.


“Access to this crucial service should never be blocked or placed in danger. I am calling on leaders from both political parties to do what’s right for women, families and doctors. Now is not the time for partisan games. In-vitro fertilization treatment should be protected at all costs.”

- Assemblywoman Laurie Davies, R-Laguna Niguel, in a statement unveiling ACR 154, a resolution to protect IVF treatment, in the aftermath of an Alabama Supreme Court ruling that found that the state’s Wrongful Death of a Minor Act extends to frozen embryos.

Best of The Bee:

  • Republican Steve Garvey has jumped into a virtual tie with Rep. Adam Schiff in the battle for a U.S. Senate seat, a new Berkeley-Institute of Governmental Studies poll showed Friday, via David Lightman.

  • A California lawmaker has reintroduced legislation to offer undocumented seniors cash assistance when they can no longer work, a proposal identical to one Gov. Gavin Newsom vetoed four months ago, via Mathew Miranda.

  • REALITY CHECK: Did Kevin Kiley flip votes to block Joe Biden’s labor secretary nominee? Via David Lightman.

  • The California Democrat who authored bills creating a fast food worker council and setting a $20-per-hour minimum wage claims he was not part of negotiations that led to an exemption for Panera and similar bakery restaurants, via Lindsey Holden.

  • California Gov. Gavin Newsom is now claiming Panera Bread will not be exempt from new fast food worker minimum wage laws as he fights back against allegations suggesting a major Newsom donor and Panera franchise owner received a special carve-out, via Lindsey Holden.