Businessman-turned-gubernatorial candidate reveals how Dem regulations destroyed his family's company

Leo Zacky and his family ran one of California's most successful poultry businesses for nearly 100 years until, according to Zacky, a deliberate plan by Gov. Gavin Newsom and California Democrats ran his family's company into the ground.

California isn't just hurting small businesses because of waste or incompetence, Zacky said while explaining his personal experience running his family-owned business in California that was eventually forced to shutter in 2018 and sell to a bigger conglomerate. Instead, Zacky, who is running for governor in California, pointed to a system that has favored liberal policy priorities at the expense of businesses like his family's, including strict environmental regulations, labor policies, high energy costs, water regulations, permitting bureaucracy and more. 

"The consistent problem that we're having in politics is these people that get into office and their net worth might not be that exorbitant, but, my gosh, in such a short amount of time on this supposed government salary, how wealthy they become and the people around them," Zacky lamented to FOX Business. 

"Look at how PG&E made a $350,000 donation to Newsom's wife's charity," Zacky continued, referring to donations over several years from the major utility company that frequently has business before the state. 

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Zacky also highlighted a big financial contribution Newsom received from one of the largest franchisees in the country, which was preceded by an exemption that the Panera Bread magnate got from the state's minimum wage increase that was being implemented at the time. 

Zacky said the minimum wage increases Californians have been subject to was a major contributing factor to his family business going under. 

"I'm competing on a global market and I have people that are competitors of mine that are producing in Louisiana or Georgia, and it's literally half the price for minimum wage there," Zacky explained. "It got to the point where it was cheaper for them to produce on the other side of the country – put it on a truck, and drive it all the way to California where they could still beat me on price at the grocery store down the street. It's unsustainable."

In response to Zacky's claim that California is not supportive of small businesses, Newsom spokesperson Tara Gallegos highlighted that Zacky Farms filed for bankruptcy in 2012, and later closed in 2018 before fully halting operations in early 2019. Newsom, meanwhile, was not sworn in as governor until January 2019.

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"Regardless, claims that California doesn’t support business don’t stand up to the facts," Gallegos said, highlighting data from the U.S. Bureau of Labor Statistics that show between January 2019 and December 2024 California created roughly double the number jobs created in Republican-controlled Florida and Texas. "Our economy is not only booming, but dominating the nation – and we retain one of the most innovative and competitive economies in the world." 

But Zacky argued that California's high taxes, burdensome environmental regulations and other policies Zacky described as "virtue signaling," are making the state less friendly to small business while benefiting bigger ones.

"When you talk about regulations, you don't really have to look further than [the California Environmental Quality Act] or the California Air Resources Board, which are these governing bodies that inhibit people from growing their businesses as needed, or are restricted based on arbitrary findings all in the name of saving the planet," Zacky said. "No matter what we regulate here in the United States, it doesn't mean China or India or the rest of the developing world is going to play ball and abide by those rules. So you're just hurting people here in America from having that ability to continue to create jobs."

According to Zacky, before Zacky Farms was forced to shutter, it was the largest private employer in the state for a time.  

In addition to emissions regulations, water access for farmers has been one of those major environmental-focused regulations that Zacky has said is killing small business owners. He pointed to California officials' decision to remove dams in the northern part of the state, which Zacky said was aimed at bringing back a native fish population in the region "for the 300 Native Americans that inhabit that region."

"You're destroying hydroelectric generation, destroying water reserves, and it's all, again, this virtue signaling nonsense," Zacky said, adding that farmers are often forced to cut back on production as a result of the state's water restrictions. 

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"You see uprooted trees up and down the 99 when you're driving in California, and it's heartbreaking," Zacky added. "It gets to the point where these farmers – you have a lot of small, independent farmers that own 50, 100, 250 acres, who have been there five, six, seven generations, and it becomes unviable for them to sustain their operations so they're forced to sell, and a big conglomerate comes in and buys it up."

Zacky, who is running for governor as a Republican, faces a big field ahead of him. He will face former Fox News host Steve Hilton in the primary, among others like former Sheriff of Riverside County Chad Bianco and Republican state legislator Brian Dahle. 

Meanwhile, former Health and Human Services Secretary Xavier Becerra and former Congresswoman Katie Porter are among the Democratic frontrunners. Newsom has reached his term-limit, so he cannot run for re-election.