Lt. Gov. Eleni Kounalakis, who earns millions of dollars annually from extensive property investments around the Sacramento region and beyond, says she will put some of her holdings into a blind trust if she is elected governor of California.
The commitment follows an inquiry from CalMatters to Kounalakis, who is running for governor in 2026. According to financial disclosures, her portfolio includes downtown Sacramento office buildings that rent to dozens of organizations with business before the state and at least three state agencies.
“If elected governor, the LG commits to placing any assets that may present a conflict of interest into a blind trust,” David Beltran, a spokesperson for Kounalakis’ campaign, said in a statement.
Which of those assets would be transferred to the blind trust and how Kounalakis would determine what constitutes a conflict of interest, however, remains unclear. Her campaign declined to make Kounalakis available for an interview and did not answer questions seeking more detail about her plans.
California’s conflict of interest rules disqualify public officials from participating in governmental decisions that would foreseeably have an impact on their personal finances, though there is an exception if the potential effect on the official’s interests is indistinguishable from the effect on the public.
It can be particularly knotty for a governor to navigate, because they deal with everything in the state, said Jessica Levinson, a professor at Loyola Law School and former president of the Los Angeles Ethics Commission. “You can imagine any investment raising a question, big or small.”
Levinson said the blind trust offers a middle ground of walling off politicians from potential conflicts of interest as much as possible without the “draconian” step of forcing them to sell off their holdings.
Gov. Gavin Newsom placed his business holdings in a blind trust after he was elected in 2018, rather than selling the multimillion-dollar collection of wineries, restaurants, bars and a hotel. Under this arrangement, Newsom transferred control of the Plumpjack Group to a family friend, who is barred from discussing her management decisions with the governor. He later signed an executive order prohibiting all executive branch agencies from entering into business arrangements with any part of the Plumpjack Group.
Prime Sacramento real estate
Kounalakis is the daughter of the powerful Sacramento real estate developer Angelo Tsakopolous and she worked for the company he founded, AKT Development Corporation, for nearly two decades before then-President Barack Obama appointed her ambassador to Hungary in 2010. Her husband, foreign affairs scholar and writer Markos Kounalakis, is now a director of AKT Development Corporation and the affiliated AKT Investments, Inc.
Since she was elected lieutenant governor in 2018, Kounalakis has annually completed required statements of economic interests laying out her investments, real property holdings and other sources of income. She has not placed those assets in a blind trust.
The latest form, filed in February for her 2024 finances, lists ownership stakes in office buildings, farm and grazing land, solar fields, a parking lot and undeveloped properties across Northern California and the Central Valley, as well as in the Tsakopoulos Family Partnership, which has additional building and land interests.
Three of the buildings from which Kounalakis draws substantial income are located in the commercial corridor around the state Capitol where interest groups, lobbyists and others with business in state government concentrate their operations.
Kounalakis is a partner in Meridian Plaza, an office building across the street from Capitol Park in downtown Sacramento. She received at least $10,000 in rent last year from 34 different tenants of the building, according to her financial disclosure, most of them lobbying firms or groups that lobby the state government.
These include trade organizations representing automobile manufacturers, insurance companies, strawberry growers, beer distributors and the oil industry, as well as Microsoft, PG&E, Verizon and the tobacco producer Altria. At least two state agencies, the Department of Public Health and a branch of the Department of General Services, also have office space there.
Next door, another office building in which Kounalakis is a partner had half a dozen major tenants last year, including The California Endowment, a private foundation that advocates for expanding health care access; Rescue Agency, which works on public health campaigns with state departments; and Sikich, a firm that provides technology services to government.
Through the Tsakopoulos Family Partnership, Kounalakis receives rental income from One Capitol Mall, another office building down the street from the state Capitol, including at least $10,000 last year from the University of California’s governing board. Kounalakis sits on that board in her capacity as lieutenant governor.
Beltran stressed that Kounalakis is a minority owner in all her business investments and is not involved in the day-to-day operations of the properties. He did not explain why she would use a blind trust as governor if she did not feel the need to do so as lieutenant governor.
“The lieutenant governor has taken measures to ensure that any assets she owns do not impede her work as lt. governor,” Beltran said. “She will do the same as governor.”
‘That’s money in her pocket’
John Pelissero, the director of government ethics at Santa Clara University’s Markkula Center for Applied Ethics, said it would have been prudent for Kounalakis to take steps as lieutenant governor to distance herself from these assets, even though she generally does not vote on or sign legislation related to her clients.
“If she’s benefiting financially from lobbying, then the optics of it are troubling. It would be reasonable for any member of the public to look at that and say, ‘that’s odd,’” Pelissero said.
He said the standard will be even higher if Kounalakis is elected governor and recommended that she then put her investments into a blind trust managed by an independent trustee that doesn’t have any communication with her.
As governor, Kounalakis would also be in a position to direct state agencies to lease offices at properties where she has an ownership stake.
“That’s money in her pocket,” said Tom Hiltachk, a political and election lawyer whose firm helped set up Arnold Schwarzenegger’s blind trust when he became governor in 2003. “She has to find a way to deal with that conflict.”
But Levinson said there is a low risk of conflicts of interest with the organizations that rent space in Kounalakis’ properties, because they have more direct ways of trying to curry favor with a governor, such as contributing to her campaign. Levinson added that she would be more concerned about Kounalakis adopting policies that benefit California landlords than making decisions that serve the tenants in her buildings.
“We’re just trying to make sure someone in a position of public trust is serving the public, not themselves,” Levinson said. “For my ear, her response is much better than somebody who says, ‘not to worry’ or ‘you can trust me’ or ‘let them come after me if they think there’s a problem.’”
Kounalakis earned at least $1.39 million — and likely far more — from her investments last year, according to a CalMatters analysis of her statement of economic interest. Income from each holding is reported in a range, up to “over $100,000.”
In addition to the rent from Meridian Plaza, which topped $340,000, Kounalakis reported more than $253,000 in income from other properties where she owns a share greater than 10%, including vineyards and row crop farms in Yolo County, grazing land in San Joaquin County, conservation credits in Placer County and a parking lot in downtown Sacramento. She and her husband have a small ownership of less than 10% in solar fields and grazing land in Santa Nella, which brought in more than $121,000 last year.
The Kounalakises also have a minority interest in the Tsakopoulos Family Partnership, from which the lieutenant governor reported more than $574,000 in income last year from Sacramento office building rent, a lease to an almond and rice farm in Placer County, the sale of an easement to the Placer Land Trust, a distribution from a Mill Valley restaurant and other investments.
The statement of economic interest further requires public officials to report their spouses’ income. According to the lieutenant governor’s financial disclosure, Markos Kounalakis earned more than $147,000 from his stake in an investment trust connected to the Tsakopolous family, more than $20,000 from serving as a director of AKT Investments, Inc., and as a political science lecturer at Stanford University, and less than $1,000 from his minority ownership of a podcast company and a boat.
