The number one and number two choices of the big-money forces in next year’s governor’s race dropped out. What’s next?
BY DAVID DAYEN
AUGUST 13, 2025 (Prospect.org)
DAMIAN DOVARGANES/AP PHOTO
Consumer protection attorney and former Rep. Katie Porter, who has announced her candidacy for governor of California, speaks during an interview ahead of the California Democratic Party’s 2025 State Convention in Anaheim, California, May 30, 2025.
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Katie Porter got in a lot of trouble at the end of her 2024 Senate campaign for using the word “rigged” to describe the statewide primary race she lost. She was referring to a coordinated campaign by big money, particularly crypto interests, to drive up her negatives and hand California’s Senate seat to Adam Schiff. Those interests got their return on investment this year when Schiff supported the GENIUS Act.
But underneath that was another kind of rigging, one that experienced observers of the political scene here have long witnessed. Schiff was anointed the front-runner by a class of influential politicians and consultants who have long played kingmaker in California. Contested elections between Democrats for major statewide offices in this one-party state have been nonexistent during the past 20 years, as establishment-chosen politicians have divvied up the spoils.
But two bombshell announcements in the last week have left the establishment without a candidate for next year’s governor’s race. First, Kamala Harris decided against running, and then, Lt. Gov. Eleni Kounalakis, the expected beneficiary of that decision, dropped out. As a result, Porter has become the unlikely beneficiary of a fractured field, and Democrats in the Golden State may experience something they haven’t seen in a while: democracy, minus the establishment putting its finger on the scale.
At the end of July, the field in the governor’s race was large but frozen, with everyone waiting to see whether Harris would end the speculation and jump in. If she did, it was likely that several candidates would immediately drop out, including Porter, the former congressmember who credits Harris with appointing her to her first job in politics, monitoring the 2012 foreclosure fraud settlement. But Harris decided she didn’t want the job, breaking a cycle where the consultants and donors who shape state politics identify their favorite and clear the field.
Harris and Gavin Newsom share the same political consultants and Bay Area donor base, and though they’ve long denied it, there was an informal nonaggression pact to split up the state’s two grand-prize positions. Harris took retiring Barbara Boxer’s Senate seat in 2016 and Newsom went for governor in 2018, Jerry Brown being termed out, winning the post fairly easily over Antonio Villaraigosa and a few others.
Villaraigosa also shared those same consultants, led by Ace Smith and Sean Clegg, who’d been a deputy mayor under Villaraigosa in Los Angeles. But they shifted to Newsom in that 2018 gubernatorial primary. Smith’s Bearstar Strategies has connections to every major California politician of the current generation and its predecessor: Harris, Newsom, Dianne Feinstein, Barbara Boxer, Jerry Brown, and more. Another Bearstar Strategies partner, Juan Rodriguez, was a senior adviser to Harris when she was California attorney general and her campaign manager for Senate; he also was lead consultant for Alex Padilla, Harris’s Senate replacement, who was a Feinstein staffer before running for office himself.
The other pillar of the California establishment is Nancy Pelosi. In Congress, she forged a close relationship with fellow San Franciscans Feinstein and Boxer, and she was actually once related to Newsom by family marriage; the informal connections go much deeper. One of Pelosi’s top allies in Congress was Adam Schiff, whom she worked hard for to beat Porter in last year’s Senate campaign.
Porter’s Senate campaign and national profile have given her a healthy lead in polling, more than three times greater than the next-closest Democrat.
In the wake of Harris’s announcement, Pelosi tried to anoint Kounalakis, an ambassador to Hungary before becoming lieutenant governor, for the governor’s seat. Kounalakis’s father Angelo Tsakopoulos is a wealthy real estate developer in Sacramento and a longtime Democratic donor who bankrolled his daughter’s lieutenant governor and first-time candidacy with millions of dollars in 2018. On CNN on July 30, Pelosi (who is a neighbor to Kounalakis in the Pacific Heights section of San Francisco) slipped with her endorsement by using Kounalakis’s maiden name, the name of the rich patron. “We have many great candidates, one in particular, Eleni Tsakopoulos, whom I support,” she said. Consultant kingmaker Ace Smith retweeted the announcement.
But just days later, Kounalakis dropped out, opting instead to run for state treasurer. This was in some ways a bigger bombshell than the Harris decision. Kounalakis was the fundraising leader despite sharing donors with Harris, most of whom were waiting for the former vice president’s decision. With her national fundraising ties and family fortune, Kounalakis was one of the only candidates in the race who could deploy the kind of sums needed for a high-profile statewide office.
There’s no real history of retail campaigning in California, and voters are only marginally engaged, especially in state politics. You need either built-in name recognition or the GDP of a small country to compete. Kounalakis had the latter but couldn’t put anything together in the early days of the race. The most recent poll had her tied for sixth place with just 3 percent of the vote, behind one candidate who hadn’t even actually announced.
Among those remaining, Porter has an advantage. Her Senate campaign and national profile have given her a healthy lead in polling, more than three times greater than the next-closest Democrat. Porter’s own connection to the Newsom-Harris network is Nathan Click, who has worked for all three. But last year’s experience showed that she is not exactly the establishment’s top choice, when the big money went to her opponent.
Villaraigosa is running again. But despite his past support from the consultacracy, his crash and burn against Newsom in 2018 and his willingness to challenge Harris over Joe Biden’s mental competency shows that those days are long gone. Former Health and Human Services Secretary Xavier Becerra was once part of Pelosi’s House leadership. But despite a long career in the House and as state attorney general, he’s mired in polling and stuck in the same lane as Villaraigosa, a Latino male ex-politician. The last time he ran against Villaraigosa, for mayor of Los Angeles in 2001, he got trounced.
Former Controller (an elected office) Betty Yee has a committed base of supporters among those active in liberal Democratic politics at the state level, but it’ll be hard for that small cohort to grow enough to win. Toni Atkins, who was the top Democrat in the State Assembly and Senate at various points, has a line to millions from developers, but also massive conflicts involving her spouse’s consulting firm, which represents numerous entities with business before the state. Tony Thurmond, the state superintendent of public instruction, is actually the only Bay Area candidate in the race right now, but his support is microscopic. There’s also a rich timeshare magnate named Stephen Cloobeck, who has already put $13 million of his own money into the race. Though money talks in California, the state’s history of rejecting wealthy self-funders is incredibly long.
There are a couple of Republicans: a Fox News host named Steve Hilton and Riverside County sheriff Chad Bianco. This likely will ensure a Republican will finish in the top two of the state’s jungle primary (in which candidates of all parties are on the same ballot), advancing to the general election.
Despite a standoffish-at-best relationship with the state establishment, then, Porter has a relatively clean path to win the race. The bigwigs in the state are more focused on a potential special election this year asking voters to authorize maps that would match Texas’s gerrymandering. By the time they turn to the governor’s race, it could be too late.
I see a couple of possible options. Villaraigosa, a former senior adviser to multilevel marketing firm Herbalife, would be comfortable going full crypto and running the 2024 Schiff play. But crypto firms might not see much upside in a state governor’s race. The establishment could choose among the field, but there’s not much separating them. Pelosi could shift to Becerra but might be gun-shy after seeing her choice check out just a week after her endorsement. It could be a sign of her waning influence among the state establishment.
In talking to people involved in state politics, I sense a lot of uncertainty. The other name for that would be democracy, and it increasingly looks like California is going to try to have one in 2026. A race testing and sharpening messages in a state with an affordability crisis whose policies have been too often on autopilot would pay off in governing.
But there’s one wild card. In 2022, a mall developer billionaire named Rick Caruso spent upwards of $100 million to try to buy the mayoralty in Los Angeles. He lost by nine points to Karen Bass. Observers were surprised to learn that the top consultant for Caruso, a Republican-turned-Democrat, was Ace Smith, the kingmaker of state politics.
Caruso may try again to unseat Bass in Los Angeles. But he may also see an opening to co-opt the establishment and run California. There’s been no clear sign of that happening. But the establishment works in mysterious ways in the nation’s largest state.
DAVID DAYEN
David Dayen is the Prospect’s executive editor. His work has appeared in The Intercept, The New Republic, HuffPost, The Washington Post, the Los Angeles Times, and more. His most recent book is ‘Monopolized: Life in the Age of Corporate Power.’
