California fraud –– a systemic failure – Latest News
California was as soon as a beacon of alternative. Today, our great state maintains its natural blessings and abundance of potential, however each are being smothered by authorities inefficiency and fraud on a staggering scale.
From unemployment advantages to homelessness applications, billions move by way of Sacramento with little actual oversight — and that’s by design.
California didn’t stumble into this accountability vacuum; it engineered it. Lawmakers dismantled the Assembly’s devoted oversight committee and buried its obligations within a price range subcommittee that’s confirmed unwilling — or unable — to demand solutions.
An individual passes the workplace of the California Employment Development Department in Sacramento. AP
The result’s predictable: Waste goes unchecked. Even when the unbiased state auditor flags fraud dangers, these warnings are ignored roughly 75% of the time.
This isn’t simply mismanagement; it’s a systemic failure.
Fraud isn’t distinctive to California, and each state confronted challenges during the pandemic. But California’s failures stand aside, not simply in scale, however in how long they’ve continued.
Thousands of inmates, together with murderers, rapists, and death row inmates, obtained up to $1 billion in unemployment advantages. An estimated $146 billion was misplaced to fraud from Medi-Cal. At least $32 billion was misplaced in fraudulent funds from the Employment Development Department (EDD) below Gov. Gavin Newsom’s management.
It has turn out to be so unhealthy that Newsom lately employed a New York PR firm to rehabilitate California’s model, utilizing $19 million in taxpayer money. He’d reasonably deflect consideration than confront the failures of his insurance policies.
Gavin Newsom onstage on the Wilshire Ebell Theatre on March 3, 2026 in Los Angeles. Los Angeles Times by way of Getty Images
Real oversight requires unbiased, steady scrutiny. Without it, the result’s predictable: wasted taxpayer {dollars} and damaged public trust.
During the pandemic, Newsom instituted a “pay now, verify later” coverage for advantages, nearly guaranteeing abuse. The fast enlargement of benefit applications with out corresponding oversight did precisely what many predicted: it invited exploitation. His own administration admitted that California’s response “lacked traditional safeguards” to stop fraud.
Whether it’s unemployment funding designed for these fallen on onerous instances, or Medi-Cal funds designed for seniors, pregnant ladies, and people with disabilities, these in need foot the invoice for Newsom’s failures.
But fraud is barely half of the issue. It doesn’t account for the billions in legal waste of state funds.
California has spent $37 billion since 2019 to curb homelessness. The outcome? Homelessness elevated whereas funds disappeared.
California has spent $37 billion since 2019 to curb homelessness. Andy Johnstone for CA Post
And there’s no higher instance of authorities waste than Newsom’s high-speed rail. It was promised to be accomplished by 2020 for $33 billion. Today, the project is a long time delayed, the price has ballooned to $128 billion, and we’ve got but to see any usable tracks.
A moon base would price much less than the high-speed rail boondoggle.
Additionally, California is the one state within the nation with an excellent unemployment insurance coverage (UI) loan from the federal authorities. What was meant to be a lifeline for unemployed employees during the pandemic is now drowning in debt exceeding $21 billion –– pushed largely by billions in fraud.
Sacramento has failed to handle this large debt, regardless of at one level having a latest $100 billion surplus (now gone). Instead, the state is forcing computerized payroll tax hikes on California companies to repay its debt.
When California fails to satisfy the essential obligations of a state authorities, Washington should turn out to be a backstop. Congress and the White House have acted urgently, imposing investigations and stricter oversight.
Vice President JD Vance speaks during a Turning Point USA occasion at Akins Ford Arena on the Classic Center on April 14, 2026 in Athens, Georgia. POOL/AFP by way of Getty Images
With Vice President JD Vance’s anti-fraud process power, we’ve already seen outcomes: eight arrests in a $50 million health care fraud scheme, and 447 hospice amenities and 23 home health businesses suspended for suspected fraud costing roughly $600 million.
Concrete reforms are needed to forestall abuses from recurring. The Stop Unemployment Fraud Act, which I cosponsored in Congress, strengthens id verification and shifts the system away from paying advantages earlier than eligibility is confirmed. By closing loopholes that allowed billions in fraudulent claims, it focuses on stopping fraud earlier than it occurs, making certain advantages attain those that actually need them.
I’m additionally drafting laws to rein in mismanagement of state unemployment insurance coverage applications to stop fraud. I’m decided to forestall California from endlessly pillaging the federal authorities and shifting the financial burden of their negligence onto employers and employees.
For years, I’ve watched Newsom and Sacramento Democrats undermine each lever of accountability. Enough is enough. It’s previous time to prioritize taxpayers and essentially the most weak amongst us.
Restoring California’s legacy requires more than a PR marketing campaign. It requires confronting failures head-on, imposing accountability, and defending public assets. Anything much less is unacceptable.
California can as soon as again lead the nation in innovation, growth, and alternative. But to take action, we can’t, and won’t, proceed to steer in fraud.
Vince Fong is a Republican representing California’s twentieth District in Congress.
