Gavin Newsom built a government program that makes businesses prove they are gay.
California voters banned exactly this kind of scheme – and Sacramento did it anyway.
What businesses actually have to submit to get certified will stop you cold.
Gavin Newsom Expanded California's LGBT Business Certification Program Across the Entire Energy Sector
The California Public Utilities Commission – the same agency that sets electric and gas rates – runs a program that steers utility contracts to businesses based on the sexual orientation of their owners.
California utilities spent more than $43 billion on contractors in 2024.
The CPUC pushes those utilities to direct 1.5 percent of that spending to businesses holding a state-issued gay certification – roughly $633 million a year funneled not to the most qualified bidder, but to whichever company can prove its owner is gay enough.
Jerry Brown started it in 2014 with a law requiring the CPUC to recognize gay-owned businesses as eligible for contracting benefits.
What California Requires Businesses to Prove Before They Can Win LGBT Certified Contracts
The scheme is administered by Supplier Clearinghouse, which handles certification for the CPUC program.
To qualify as an officially gay-owned business, applicants must produce documentation proving the owner is gay — acceptable evidence includes a letter from an LGBT organization, a newspaper article identifying them as such, or written statements from three personal contacts on company letterhead.
Corporate officials who lie about being gay to secure these contracts face up to a year in county jail.
One business owner confirmed to City Journal exactly how the system works.
Mary Ann Horton – a white male who transitioned and is now married to a woman – runs a cybersecurity firm registered as both woman-owned and LGBT-owned in California.
After securing those certifications, Horton said San Diego Gas & Electric brought the company on as a contractor, with a company official telling them the gay certification list made the contract "much easier to secure."
"If I was a straight, white male, I might be concerned I don't have the same opportunity," Horton said. "It worked out great for me."
Other certified LGBT businesses collecting utility dollars in California include a kombucha maker, a sign-language interpreter, and a coaching firm that helps clients emotionally process election results.
California Voters Already Said No – Sacramento Did It Anyway
This program exists in open defiance of the California electorate.
In 1996, Californians voted 55 percent in favor of Proposition 209 – a constitutional amendment banning preferential treatment based on race, sex, ethnicity, or national origin in public contracting.
They rejected a repeal of that ban in 2020.
The CPUC insists its procurement "goals" are not mandatory quotas, but utilities must track diversity spending by category, file detailed annual reports, and put in writing exactly why they fell short of any target.
Setting goals, requiring documentation, and demanding written justifications for noncompliance is a quota by any honest description.
The program remains in place. California's ratepayers are paying for it.
DOJ Opens Investigation Into California's Gay Certification Contractor Program
Christopher Rufo at the Manhattan Institute broke the story in City Journal, and the Department of Justice did not wait long to respond.
U.S. Assistant Attorney General Harmeet Dhillon announced Wednesday that she has opened a formal inquiry into the CPUC program.
"I don't know how who somebody sleeps with is relevant to their provision of utilities-related support services," Dhillon said during an appearance on Glenn Beck's podcast. "I think we know it isn't. It's nonsense, it needs to stop, and it's illegal."
Dhillon told Beck that California consumers are directly subsidizing this scheme through higher utility rates.
"How does that help the ratepayer, everybody who consumes utilities in the state of California, get the best rates? It doesn't," she said. "When you have set-asides and special contracts like that, you have inflation because people know that their status is a commodity that they can actually sell."
Dhillon also encouraged companies that lost contracts because they couldn't check the right certification boxes to consider private legal action.
The Justice Department has already opened investigations into hiring practices at the University of California system and taken action against woke contracting programs at public institutions across the country.
Gavin Newsom personally expanded this program. He owns this.
California voters banned it. Sacramento brought it back. Now Washington is coming.
Sources:
- Christopher F. Rufo and Austen Hufford, "Inside California's Gay-Certification Program," City Journal, June 16, 2026.
- Valerie Richardson, "California Comes Under DOJ Scrutiny for Program Boosting Gay-Owned Contractors," The Washington Times, June 17, 2026.
- Ben Kew, "California to Impose 'LGBT Certification' Tests for $633 Million in Government Contracts," The Gateway Pundit, June 17, 2026.
