California Lt. Gov. bows out of governor's race, enters treasurer's race

California lieutenant governor's office

California Lt. Gov. Eleni Kounalakis dropped out of the crowded governor's race Friday, opting to run for state treasurer in 2026 instead.

"The decision was not made lightly," Kounalakis said in a statement posted on X. "At this moment, I believe I can make the greatest impact by focusing on California's financial future."

Kounalakis' announcement comes as an Emerson College poll released Friday shows her in seventh place in the governor's race, closely trailing former state Attorney General Xavier Becerra.

Former Rep. Katie Porter, a Democrat, leads the governor's race with 18% support followed by Republican former Fox news host Steve Hilton with 12%. The crowded field also includes Riverside County Sheriff Chad Bianco, a Republican, in third place with 7% backing, former Los Angeles Mayor Antonio Villaraigosa, a Democrat, in fourth place with 4% support and developer Rick Caruso, twice-mayoral candidate for Los Angeles Mayor as a Democrat, in fifth place with 3% support.

As state treasurer, Kounalakis said she would "bring a deep commitment to fiscal responsibility, economic opportunity and strategic investment in our state's priorities — from affordable housing and clean energy to infrastructure and education."

Kounalakis emphasized her experience as a housing developer, indicating that lessening the state's housing crisis would be a priority for her as treasurer. She worked for AKT Development for 18 years before entering public service.

The two-term lieutenant governor, whose terms ends in 2026, served as President Barack Obama's ambassador to Hungary from 2010 to 2013. California Gov. Gavin Newsom appointed her California's representative for international affairs and trade in addition to her duties as lieutenant governor.

Kounalakis hinted in March she was contemplating dropping out of the race after polls showed she was trailing Porter and former Vice President Kamala Harris, Politico reported.

Harris abandoned the governor's race on July 30, saying she had "given serious thought to asking the people of California for the privilege of serving as governor," but decided, "for now her leadership — and public service — will not be in elected office."

The current lieutenant governor and Treasurer Fiona Ma, could swap positions, since Ma announced in 2023 she would run for lieutenant governor.

Others running for treasurer include state Sen. Anna Caballero, D-Salinas, former Oakland Mayor Libby Schaaf; and Tony Vazquez, a member of the state Board of Equalization.

Kounalakis graduated from Dartmouth College in 1989 and earned her master's degree in business administration from U.C. Berkeley's Haas School of Business in 1992. She holds an honorary doctorate of law from the American College of Greece and the University of Piraeus and is a member of the Council on Foreign Relations.