Bringing Up Baby Gavin

How William Newsom's pipeline into the Getty fortune has put money -- lots of it -- in his politically ambitious son's pocket

The Legislature subsequently enacted the bill, adding enormously to the wealth of Gordon and his relatives.

In a recent interview, Judge Newsom said he did not receive so much as a cup of coffee for talking to Lockyer. But years later, Newsom wound up overseeing large parts of the gargantuan Getty fortune -- a circumstance that has helped enrich both him and his son. Last year, for instance, the judge earned about $250,000 for his work for the Gettys, he says.

The U.S. tax code allows wealthy people to create trusts to reduce their tax load. A trust may own a variety of investment instruments, and some profits are distributed to its beneficiaries.

Judge William Newsom (above) has played a key role 
in advancing the political and financial careers of his 
son Gavin (inset).
Anthony Pidgeon
Judge William Newsom (above) has played a key role in advancing the political and financial careers of his son Gavin (inset).
Miserly J. Paul Getty was sued by his son Gordon for 
more access to the family billions.
AP Wideworld Photos
Miserly J. Paul Getty was sued by his son Gordon for more access to the family billions.

The Gordon P. Getty Family Trust is governed by a board of trustees composed of Gordon and his four sons, Andrew, Peter, John, and Billy. For the past eight years, William Newsom has been the trust's administrator, deploying hundreds of millions of dollars in blue-chip stocks, bonds, real estate ventures, and the occasional start-up company.

Since 1989, Newsom also has served as a trustee of the Ronald Family Trust A, another piece of the original Sarah C. Getty Trust, which benefits offspring of Gordon's brother Ronald. And the judge is a partner with Gordon Getty in a real estate investment firm, Donwilong LLC, created to provide for Gordon's half sister, Donna Long.

The judge further serves as co-trustee of the Ann and Gordon Getty Foundation, which gives millions of Getty dollars to nonprofit organizations. Most of these tax-deductible donations support classical music and opera companies. In 2001, the foundation gave $750,000 to the San Francisco Symphony, $585,000 to the San Francisco Opera, and, in a more modest act of charity, $1,000 to Meals on Wheels.

But Newsom also is deeply involved in helping Gordon Getty invest his personal trust income.

Newsom acts as co-trustee of Gordon's San Francisco Revocable Trust, which buys and sells Bay Area real estate. Among its holdings is 704 Sansome, a small office building that Getty purchased for $2.1 million in 1997 from political consultant Clint Reilly. For a while, Getty's sons used it as headquarters for several businesses.

In 1989, Newsom incorporated a Nevada-based firm, Newsom Investments Ltd., to manage Getty's investments in real estate and other ventures. Newsom Investments is managing partner of Loma Rica Ranch LLC, a corporation that plans to build a large housing development in rural open space near the city of Grass Valley in the Sierra foothills of California. The developers are lobbying city officials to annex the Ranch property, which would greatly increase its value.

"Loma Rica will be smart growth," the judge says. "Eighty percent open space -- two bedrooms, one bathroom [homes] for $140,000 to $180,000."

Indeed, the judge has incorporated a dozen or more Getty-financed investment vehicles in low-income-tax Nevada, including one that earns royalties from oil wells and another that owns property in South Africa.

Newsom and Gordon Getty have other interests in the Third World as well.

The judge serves on the board of directors of the Getty-funded Conservation Corporation Africa, which owns 25 safari lodges in wild areas of South Africa, Zimbabwe, and Tanzania. The luxuriously appointed lodges cater to well-heeled eco-tourists who can afford to pay $350 a night.

"We lease the land and restore it to pristine condition," says Newsom. "There is light impact with 15 rooms [in each lodge] on 10,000 acres. We employ 3,500 people and provide medical clinics and schools. I am very proud of steering the [Getty] family to it."

An ardent environmentalist, Newsom sits on the boards of a number of green groups, including the Environmental Defense Fund, the Audubon Society, and the Sierra Club Foundation, financial parent of the Sierra Club. Last December, the Sierra Club began selling shares in a Gordon Getty-owned mutual fund to its 700,000 members and to the public. The Forward Fund eschews investments in oil, timber, or automotive firms. According to Newsom, Getty believes inflation can be ended by replacing national currencies with interest-bearing mutual funds. His theory, called "fertile money," has yet to find much acceptance with economists, but being a billionaire means, among other things, that you get to experiment with the monetary system by setting up your own mutual fund.

Like father, like son. William Newsom's closeness to the Gettys opened the door for Gavin to piggyback on what quickly turned into a highly profitable real estate investment in Maui.

In January 2001, the Ronald Family Trust A, of which the judge is a trustee, purchased 4,500 acres of beachfront property, called Hana Ranch, on the island for $24 million.

A few months later, the judge secured a conservation easement from the Maui Coastal Land Trust to permanently protect 2.5 miles of beachfront from development. Newsom says a Getty-financed group, Hana Ranch Partners LLC, plans to run cattle on the property and allow up to 10 buyers to build nice homes overlooking the permanently conserved beaches. As point man for the project, Newsom says he will set aside 100 acres for affordable housing for locals. "The residents of the area are poor and mostly on welfare," he remarks.

Newsom says he and his son each invested $125,000 in Hana Ranch in July 2001. Gavin reported on his economic disclosure statement that by December of that year, his share had zoomed in worth to more than $1 million.

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