French Laundry, the swanky restaurant California Gov. Gavin Newsom was caught dining at in November, received $2.4 million in Paycheck Protection Program loans from the Small Business Administration, according to a new report by KABC-TV.
French Laundry is a 3-Michelin-star restaurant in Napa Valley that was plastered in national headlines after California's Democratic governor was busted in photos dining at the posh establishment with a maskless group for a birthday party. Newsom, who was caught flouting his own stringent coronavirus guidance, responded to the controversy by saying, "We should have modeled better behavior and not joined the dinner."
Chef Thomas Keller's luxurious restaurant is back in the news because of the amount of federal financial assistance it received. The world-renowned restaurant was granted a $2.2 million PPP loan by the SBA on April 30 to retain 163 employees. The eatery was provided a second PPP loan worth $194,656 to retain five employees on the same day.
Analysis by KABC-TV found that French Laundry's loans were 17 times more federal money than what the average Bay Area restaurant received.
"The I-Team analyzed thousands of California loans released by the SBA that show wealthier, big businesses are often getting access to loans before small mom and pop owners," KABC-TV stated. "Out of all the approved loans in California, 91 percent of larger restaurants with 300 or more employees got their loan approved in April versus only 52 percent of smaller restaurants with 100 or fewer employees."
Dennis Berkowitz, the former owner of the Vault 164 restaurant, told KABC-TV, that he struggled to secure $318,000 from the government to retain approximately 50 employees. The loan wasn't enough and Berkowitz was forced to sell his restaurant in July.
"I've had a 40-year run in the restaurant business, so I consider myself fortunate," Berkowitz said. "I really feel bad for the next generation of restaurateurs because they're screwed."
A report from earlier this month found that eight companies partially owned by Newsom received nearly $3 million in PPP loans from the federal government to deal with financial difficulties brought on by the COVID-19 pandemic. Newsom founded PlumpJack Management Group LLC, which includes five restaurants and bars, four Napa Valley wineries, a ski resort, and retail establishments.