The Curious Case of California’s ‘LGBT-Owned’ Business Certification Program
“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.” It most certainly did.
If California officials were searching for a way to make the state look more ridiculous, they may have just found it.
City Journal contributors Christopher Rufo and Austen Hufford reported Tuesday that the state is now “pressuring public utilities to award $633 million in special contracts to ‘LGBT-owned’ firms. To qualify, residents must go through the state’s official gay-certification program — and face up to a year in jail if they’re not gay enough.”
Lots of paperwork involved in order to be certified as gay in California. pic.twitter.com/TwaAKAlhZJ
— City Journal (@CityJournal) June 16, 2026
Rufo and Hufford explained that the program is administered by the California Public Utilities Commission (CPUC), the agency that oversees privately owned utility companies. Considering that in 2025, California utilities spent more than $43 billion on outside contractors supplying services related to water, natural gas, electricity, and telecommunications, there is a lot of money to be made by companies that qualify for LGBT-status.
California’s supplier-diversity initiative dates back to 1986, when Gov. George Deukmejian signed legislation requiring certain utilities to develop plans for doing business with women- and minority-owned companies. The CPUC later formalized those efforts through its Supplier Diversity Program “which would enforce the law and set contracting ‘goals’ for large utilities.”
The pair detailed how the initiative grew to include LGBT-owned businesses under subsequent Democratic administrations and how, by 2022, they were fully incorporated into the program.
Large utilities were given contracting targets that rose from 0.5% in 2022 to 1.5% beginning in 2024. Had those goals been met last year, LGBT-certified businesses would have received roughly $633 million in contracts.
In the years that followed, CPUC faced activist pressure as it implemented the gay expansion. BuildOUT California, a since-rebranded LGBT building-industry organization, sent a letter to the commission arguing that “homophobia” existed within “the ranks of the utility companies.” The state’s legislative LGBTQ caucus suggested in a 2021 letter that even considering lower gay-procurement targets was “an insult to the LGBTQ+ community.”
By 2022, CPUC had fully implemented the expansion. In practice, this meant establishing a “goal” for utility companies with annual revenues exceeding $25 million to buy things from state-certified LGBT businesses: 0.5 percent of procurement in 2022; 1 percent in 2023; and 1.5 percent in 2024 and beyond. If “large” CPUC-regulated utilities met these “goals” in 2024, they would have sent roughly $633 million to LGBT-owned firms.
For women- or minority-owned businesses, qualification is a fairly straightforward process. For LGBT-owned businesses, it is more involved.
Applicants can secure certification by providing a letter from an “LGBT organization” attesting to their sexual preferences; proof that a newspaper identified them as “LGBT”; or three letters from “personal contacts” written “on company letterhead” attesting to their homosexual orientation. Corporate officials who “falsely represent” their business as gay face up to a year in county jail.
Supplier Clearinghouse also accepts gay-certification letters from the National LGBTQ+ & Allied Chamber of Commerce. The chamber has its own list of accepted documents, including human resources complaints or police records claiming LGBT discrimination. As NGLCC states on its website, “Certification is a journey, not a destination.”
One company that benefited from the designation is Red Ace, a cybersecurity firm owned by “internet pioneer” Mary Ann Horton. A white male who transitioned into a “woman,” and is also married to a woman, “she” checks two boxes. In addition, her company is also registered as woman-owned business.
Horton told the City Journal that although the certification process involved extensive paperwork, it helped the company secure work with San Diego Gas & Electric because it appeared on the utility’s diversity-vendor list.
To prove that Red Ace was “lesbian-owned,” Horton sent Supplier Clearinghouse a domestic-partner affidavit. To establish that the business was woman-owned, Horton submitted a birth certificate, which had been reissued in Washington State post-“transition.” To prove transgender status, Horton filed a “therapist carry-letter,” a document from a medical professional certifying transgender identity.
…
“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.”
It most certainly did.
Despite Horton’s favorable review for the program, Rufo and Hufford noted that participation remains relatively limited. They reported that procurement from LGBT-owned firms fell by 5% in 2024, and Supplier Clearinghouse currently lists only 451 LGBT-certified businesses, compared with roughly 3,750 minority-owned firms.
As I see it, the concept of LGBT-owned businesses is just one more way for a liberal state government to advance their toxic social objectives. Who cares about merit?
When most people hire a contractor, they’re concerned with the quality of the job they can expect. They check references from previous clients. The contractor’s sexual preferences are the last thing on their mind.
As Rufo and Hufford put it, “buying a hammer from a firm owned by a black transgender lesbian has more social value than buying the same hammer from a firm owned by a straight white man.”
They concluded:
Californians don’t need an energy system delivered by gay contractors; they need an energy system that works. Utility regulators should be in the business of regulating utilities, not verifying contractors’ sexual preferences. Companies should award contracts based on competence, quality, and cost—not the sexuality of the business owners.
Based on the responses to their report, many people agreed:
The % of gay special contractors is about to experience exponential growth.
— JustMe – Rocking My Tin Foil Hat (@JustMe81920266) June 16, 2026
From the City Journal’s comment section:
How does one ‘certify’ a business as ‘gay owned’? Do they send a government agent to watch the owners have but sects? Or do the owners just sign a form stating they are gay? When, in all of human history, has a government ever classified a business based on the sexual proclivities of the owner(s)? That the kind of sex someone engages in decides whether they get extra government contracts or services, sounds unconstitutional to me. If private entities discriminated like the state does, they would be prosecuted by the same government.
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In the bad old days, people could be prosecuted for being “gay”.
Today, in our benighted era, people can be prosecuted for not being “gay”.
I reminds me of Ronald Reagan’s quip (I think it was him, but not sure):
“My concern with homosexual rights is that the next step will be to make it mandatory” (a loose paraphrase)
Apparently, we have arrived at that point.
Question 67(b)(iii). State the last five occasions when you visited a state-certified California bath-house, identifying the bath-house, dates and number of official contacts made during the visit. Attached the necessary Certificates of Attendance as attested by California Statute 374.
Close. It was Bob Hope: “I’ve just flown in from California, where they’ve made homosexuality legal. I thought I’d get out before they make it compulsory.”
@Johnny We also used to view transvestites with disgust. I remember riding Metro North (NYC) and a large black man dressed as a woman, wearing a cropped top that exposed his big hairy stomach, sat down across from me in a four-seater. He caused quite a stir — this was in the 1980s. I tried to act like it was normal, but it was pretty crazy for that era. … Now these people are praised for their “courage.” Too, too much.
Enough Democrats in power for long enough and this is what happens. They are looking for more ways to be more ridiculous as they march leftward.
Like Palantir?
But remember, Democrats think they lose elections because of “inconsistent messaging.” Actually, they lose them because their messaging is 100% consistent, as is its insanity.
The need more messaging. I don’t think enough people understand their insanity.
What are these “elections” that you speak of? I don’t think that the word means what you think it means, in California.
That’s a keeper.
Their behavior should be encouraged, as in handing someone with suicidal thoughts a razor blade.
After reading some passages, I found myself on the floor laughing. One such passage, “Applicants can secure certification by providing a letter from an “LGBT organization” attesting to their sexual preferences; proof that a newspaper identified them as “LGBT”; or three letters from “personal contacts” written “on company letterhead” attesting to their homosexual orientation.” implies a hierarchy of trustworthiness. It seems that a newspaper reference is solid gold! If it is in print, it must be so.
But has anyone bothered to ask why is one’s abnormal sexual habits something that society should value?
Or look in their closets at wardrobe choice.
Where are those two fault lines when sanity needs them?
How is this not brazenly illegal discrimination?
It’s on two levels, even. First is the obvious one everyone notices, on the basis of sex (or sexual preference). But it’s also religious discrimination.
Gay softball teams sometimes impose a gayness test. If they let in straights, they’re choosing from a much larger population and hence can get better players than their league competitors.
Paper work? We don’t need any stinking paper work!
A really “fool-proof” test would take the whole thing into NSFW territory.
I think I’ve already said too much. please don’t ban me, Professor.
Whom the gods would destroy, they first make mad.
Please tell me this is a Babylon Bee link.
Doesn’t this also discriminate against the T of the LGBTQ etc. (Transvestite/crossdressing) people? How many times does a guy have to wear a dress to qualify, or will wearing women’s jeans or slacks qualify? Do women automatically qualify because it is now normal for women to wear slacks. A hundred or so years ago, it was forbidden in Western culture for women to wear slacks.
Alternative proof:
Purchased a Subaru
Purchased an Elton John CD
Have 3 or more hairdressers saved in your phone
Does getting called “homo” in high school count?
I am a California native born in the 50s but left in the 90s due to business. The state has long been bad on regulations and this seems like the latest absurd one. I still have family and friend in the state. This will likely send up costs all around and increased delays in everything when the state cannot afford them. This will increase business and people leaving, which is happening more and more.
J6:
Except for a couple of visits decades ago, I have managed to avoid California, but your mention of costs had me start thinking of this, Logistics chains are fragile. What if this is the last straw for some Christian CEO, and they refuse to sell or ship to California?
Subotai Bahadur
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