In April 2017 the California Legislature approved a $9 billion increase to the state gasoline tax, a move championed by Governor Jerry Brown and backed by Democratic leaders who added a series of "sweeteners" to win hesitant votes. One of those votes came from then‑Assemblymember Adam Gray, whose district in Merced County received a $100 million grant for a new expressway and a $400 million grant for a commuter rail line.
The expressway, a four‑lane, 4.5‑mile corridor linking the University of California, Merced campus to surrounding neighborhoods, opened in 2022. County officials credited Gray with securing the funding, and he cut the ribbon at the ceremony. Shortly after, a mixed‑use development began along the corridor, featuring a 133‑room Hilton Garden Inn and a gas station. The construction contract for the hotel, gas station and related facilities was awarded to Marvulli Inc., a firm owned by Gray's cousin David Marvulli.
Marvulli Inc. reported the hotel project as its first foray into hospitality construction. The company posted an Instagram celebration on Jan. 30, 2026, showing Marvulli and Gray standing beside the newly opened Hilton. Financial disclosures filed by Gray show he earned $366,112 in salary from Marvulli Inc. between 2024 and 2025, took a $250,000 equity stake in 2025 and saw that stake rise to $500,000. Gray also reported $100,000 in profit from the stake in the most recent filing.
Statewide, the 2017 gas‑tax hike created a dedicated revenue stream for local transportation projects. Since the law took effect, Merced County has received $74.3 million in allocations derived from the tax. A Washington Free Beacon analysis found Marvulli Inc. secured at least seven county contracts worth $30.4 million from 2020 to 2025, covering repairs, modernization and demolition work on public facilities.
In 2021 the California State Transportation Agency awarded Merced County a $6.5 million grant to expand a test‑track facility used by autonomous‑vehicle developers such as Waymo. County officials praised Gray for helping obtain the grant. Two years later Gray and Marvulli bought a rundown dormitory complex near the test‑track through a limited‑purpose entity called Gemenii LLC. County records show the property sold for $600,000 in August 2022; a 2026 assessment lists it at more than $5 million.
Gray's financial disclosures list $1 million in rental income from the complex in 2023, a year after the purchase and before any major renovation was evident in satellite images. The filings describe the complex as having 80 units, yet the recorded living area is under 9,000 square feet, suggesting an average unit size of roughly 110 square feet, more akin to a single bedroom than a full apartment.
Further state funding arrived in 2023 when the California State Transportation Agency granted Merced County $49.6 million to develop an inland port and rail district adjacent to the autonomous‑vehicle test track. Patriot Rail, the operator of the freight facility, selected Marvulli Inc. to construct the port dock, a project highlighted on the firm's website. The port work likely contributed to the rising valuation of the dormitory complex.
The pattern of public money flowing to projects that later awarded contracts to Marvulli Inc. has drawn criticism from watchdog groups. Critics argue that the "sweeteners" attached to the 2017 gas‑tax bill created a conflict of interest for lawmakers who stood to benefit from the downstream allocation of funds. Gray's own statements at the 2022 expressway ribbon‑cutting, "I would do it 100 times again", have been cited as evidence of his willingness to trade policy for district gains.
Gray is now facing a tightly contested race for California's 13th congressional district. Republican challenger Kevin Lincoln, a former mayor of Stockton, has framed the contest as a test of ethics and fiscal responsibility. Gray won the 2024 election by just 187 votes after losing narrowly in 2022, underscoring the district's competitive nature.
Gray's campaign material emphasizes affordability, promising to lower costs for food, housing, health care and utilities for Central Valley families. The juxtaposition of that message with his personal earnings from a construction firm that benefited from the same tax increase he helped pass raises questions for voters about the consistency of his policy positions.
For observers in other states, the case illustrates how transportation funding reforms can intersect with local business interests. Several states, including Washington and New York, have debated similar fuel‑tax increases to fund infrastructure, and the California experience offers a cautionary example of how earmarked grants may create incentives for lawmakers to steer projects toward allies.
In Canada, provincial fuel‑tax policies also fund road maintenance, and the federal government monitors potential conflicts of interest in infrastructure spending. While the Canadian system does not use a statewide gasoline tax in the same way, the principle of linking tax revenue to local project awards is shared, making the Gray episode relevant for Canadian policymakers assessing transparency safeguards.
The next steps for the investigation will likely involve the California Fair Political Practices Commission, which oversees disclosures and can impose penalties for violations. If the commission finds that Gray's financial interests were not properly disclosed or that he violated conflict‑of‑interest rules, sanctions could range from fines to a recommendation for a special election.
As the November ballot approaches, voters in Merced County and the broader Central Valley will weigh Gray's legislative record, his personal financial ties, and the promises made on his campaign platform. The outcome will signal whether constituents prioritize infrastructure achievements over perceived ethical lapses, a decision that could shape how future transportation bills are crafted across the West Coast.