Harmeet Dhillon Just Exposed the Gay Contract Program Gavin Newsom Has Been Running Inside California’s Utility System

Harmeet Dhillon has spent the last year dismantling DEI programs that bureaucrats spent decades building.

Now she just opened an investigation into something California has been running for years – and Newsom never thought anyone would notice.

What the DOJ found buried inside California's utility contracting system is going to make your blood boil.

Gavin Newsom Built a Gay Certification Board to Hand Out Contracts

The scheme ran through the California Public Utilities Commission, the state agency that oversees private utility companies serving 39 million residents.

California utilities spent more than $43 billion on outside contractors in 2024 – fuel suppliers, engineers, surveyors, the workers who keep your lights on and water running.

Jerry Brown started it in 2014 when he signed legislation folding "LGBT-owned businesses" into the state's supplier diversity program.

Gavin Newsom expanded it in 2019, pushing even more of the state's energy sector to prioritize gay-certified contractors.

By 2022, the California Public Utilities Commission had set hard targets – 0.5 percent of procurement in 2022, 1 percent in 2023, and 1.5 percent in 2024 and beyond.

Had California's utilities hit that 1.5 percent target in 2024, roughly $633 million in contracts would have gone to businesses based on the sexual orientation of their owners.

Not their competence. Not their cost. Not their track record. Their sexuality.

California Created a Government Office to Certify Whether You Are Gay Enough

This is the part that should make every taxpayer in America furious.

The CPUC didn't just prefer gay-owned businesses. It built a formal certification apparatus to determine whether a business owner qualifies.

The Supplier Clearinghouse – a state-approved body – runs the vetting.

To get certified, a company can have an LGBT advocacy group write a letter vouching for the owner's sexual preferences, dig up a newspaper article identifying them as gay, or round up three colleagues willing to put their names on company letterhead confirming the owner's homosexuality.

One business owner, Mary Ann Horton – a biological male who "transitioned" and married a woman – certified as both lesbian-owned and woman-owned, submitting a domestic-partner affidavit, a reissued birth certificate, and a therapist's letter to collect both designations.

Horton told the Manhattan Institute's City Journal that being on the diversity list made landing a part-time cybersecurity contract with San Diego Gas & Electric far easier.

"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 include a kombucha maker, a sign-language interpreter, and a coaching firm offering a program to help clients "manage" their feelings about "the latest election cycle."

Meanwhile, corporate officials who falsely represent their business as gay to collect these contracts face up to a year in county jail.

Sacramento built a bureaucracy to police sexual orientation – and called it equity.

Harmeet Dhillon Read the Law and Came After Them

Christopher Rufo at the Manhattan Institute broke the story Tuesday. Within 24 hours, Dhillon had gone public with a DOJ investigation.

"Affirmative action for 'Eskimos' and 'LGBT people?' The California Public Utility Commission's 'Supplier Diversity Program' has gone off the rails," Dhillon wrote on X. "This may be news to California, but race and sex discrimination violate federal law. @CivilRights will take any appropriate action."

The CPUC tried to spin the program as voluntary. Communications director Terrie Prosper called it a program that "encourages" – not requires – certain contracting levels.

That spin doesn't hold up. The Commission pressures utilities into compliance through annual reporting mandates, demographic tracking requirements, written procurement plans, and demands for written justifications whenever targets go unmet.

California voters already said no to this kind of discrimination twice. They passed Proposition 209 in 1996 banning preferential contracting based on race and sex. They rejected an effort to repeal that ban in 2020.

The CPUC ran the program anyway.

This investigation isn't a one-off. Dhillon has already opened DEI probes into the University of California system, Minnesota state hiring practices, 15 medical schools, and 16 law schools. In January 2026, DOJ sued Minnesota outright over race-based hiring quotas. The California investigation lands inside a systematic campaign to dismantle discriminatory state programs coast to coast.

The Trump administration didn't just issue executive orders. It built the enforcement machinery to back them up. And California – which spent years dressing up discrimination as diversity – is now finding out what happens when someone at the DOJ actually reads the law.

Gavin Newsom built a state office that asked business owners to prove their sexuality to get government contracts. Harmeet Dhillon just told him that's illegal. The only question now is how expensive Sacramento's woke experiment is going to get.

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Sources:

• Dmitri Bolt, "Harmeet Dhillon Just Launched an Investigation Into CA's Gay-Contract Program," Townhall, June 18, 2026.
• Christopher F. Rufo and Austen Hufford, "Inside California's Gay-Certification Program," City Journal, June 16, 2026.
• "DEI Updates – Recent Developments under the Trump Administration," The Modern Workplace, April 6, 2026.
• Statement of Harmeet K. Dhillon, Assistant Attorney General, Senate Judiciary Committee, July 23, 2025.
• "DEI Task Force Update," Gibson Dunn, June 8, 2026.