A Billionaires' Battle is Brewing Among Former Google Executives

A civil war among billionaires is escalating within a $100 million organization funded by Sergey Brin, created to block a proposed wealth tax in California. According to The California Post, former Google CEO Eric Schmidt and other influential figures are expressing dissatisfaction that the coalition has strayed from its original purpose.

Reports indicate that Schmidt, who has contributed $3 million to Brin's 'Building a Better California' foundation, has become furious after the California Democratic Party branch supported a union-backed wealth tax and rejected two counter initiatives backed by the group.

“Eric is absolutely right to be frustrated,” a source informed The Post.

Some donors and advisors are beginning to express disappointment that the 'Building a Better California' foundation is diluting its objectives by attempting to reshape the state's politics while supporting six different regional initiatives. The foundation has raised enormous funds from Silicon Valley billionaire benefactors, including $10 million from venture capitalist John Doerr and $7.5 million from Michael Moritz.

The group’s original mission was to block the billionaire tax, viewed as a destructive measure that could disrupt California's economy at the expense of capital flight from the state. However, some insiders are concerned that expenditures in other areas, like environmental policy, may jeopardize overall success.

“As soon as you start getting involved in that, you risk losing previous efficacy,” warned an advisor to one of the foundation’s donors, cautioning against the dangers of “mission drift.”

Schmidt’s frustration has been exacerbated following a painful defeat two weeks ago at the California Democratic Party Executive Board meeting in San Diego. The party not only voted to support Proposition 40—a union-backed initiative that imposes a 5% one-time tax on Californians with assets exceeding $1 billion—but also opposed Propositions 41 and 42, which Brin's group pushed as countermeasures to the tax.

Proposition 41 would require state audits of programs funded by the new special taxes, making it more difficult to use funds from the “billionaires' tax.” Proposition 42 would ban retroactive taxation, effectively nullifying the tax bill before it becomes law.

Sources report that Courtni Pugh, a partner at Hilltop Public Solutions and former director of the Services Employees International Union (SEIU), was supposed to persuade Democrats to take a neutral stance on the billionaires' tax while ensuring support for Propositions 41 and 42.

Consequently, the billionaires' coalition suffered a 0-3 defeat, as the billionaires' tax narrowly surpassed the required 60 percent threshold for party approval.

Hilltop, which is also managing the gubernatorial campaign of Democratic front-runner Xavier Becerra, received $75,000 from the committee supporting Proposition 42. Becerra and Governor Gavin Newsom, who have also closely collaborated with Hilltop on electoral initiatives, are opposed to the billionaires' tax.

Pugh did not respond to requests for comment.

In June, the 'Building a Better California' foundation raised $118 million, with $82 million personally invested by Brin. He later added another $20 million, bringing his total investment to $102 million. On July 24, that $20 million was evenly distributed between the committees for Propositions 41 and 42, saving their campaigns after each committee had nearly spent $50 million on gathering signatures for the measures to be included on the November ballot.

However, the group's growing ambitions are creating strange alliances and putting its donors in awkward positions. The 'Building a Better California' foundation has allocated $10 million to Proposition 45, which seeks to significantly simplify environmental reviews for housing, transportation, water, energy, and other projects under California's key CEQA legislation.

Supporters present this initiative as a means to reduce housing and infrastructure costs by cutting bureaucratic red tape. However, Eric Schmidt’s wife, environmental philanthropist Wendy Schmidt, along with actress Jane Fonda, is helping to lead the campaign against Proposition 45, believing it would undermine environmental protections.

In addition to past and future expenditures on Propositions 40, 41, 42, and 45, the 'Building a Better California' foundation has directed $6 million to Proposition 37, $1 million to Proposition 1, and millions more to another proposed constitutional initiative concerning taxes and expenditures. Other opponents of the billionaires’ tax are also concerned about the organization’s tactics.