The State of California is trying to blame former President Donald Trump for losing $30 billion in coronavirus relief unemployment payments to fraud.
In 2021, the California State Auditor flagged the EDD for gross mismanagement:
As Cal Matters reported, the audit found that despite repeated warnings from federal authorities that fraudsters would target California, EDD waited six months and processed 7.4 million claims before it began flagging addresses with unusually high numbers of claims. In “the most egregious example,” more than 1,700 claims came from a single address. EDD also paid $10.4 billion to claimants with unverified identities and $810 million to prison inmates. State labor officials confirmed that the total fraud could reach $31 billion.
The report itself adds:
“EDD did not take substantive action to bolster its fraud detection efforts for its unemployment insurance program until months into the pandemic, resulting in payments of about $10.4 billion for claims that it has since determined may be fraudulent.”
However, following an inquiry from Rep. James Comer, the new chair of the U.S. House Committee on Oversight and Accountability, California blamed Donald Trump for his supposed weak federal leadership.
“Unfortunately, the Trump Administration expressed no interest in establishing (a) coordinated national response when these (emergency pandemic unemployment) programs were initiated in 2020, leaving states to fend for themselves against a clear pattern of sophisticated, international criminal syndicates at work,” Nancy Farias, director of the state Employment Development Department, wrote in a four-page letter to Rep. James Comer, R-Kentucky, chairman of the House Committee on Oversight & Accountability.
But it wasn’t Trump, but the Democrats who insisted on distributing coronavirus relief through state unemployment systems, instead of issuing checks from the federal government.
Democrats were acting on advice from liberal economists who pushed to see unemployment expanded as a welfare system.
They were acting on advice from liberal economists who wanted to see unemployment expanded as a welfare system.
The Democrats argued that Congress should focus on tailored measures to deliver quickly.
“We asked the economists what really can stimulate the economy fast, and there were things like food stamps — because people would spend that fast — unemployment insurance, refundable tax credits,” Ms. Pelosi said. “What we are doing has to be related to the coronavirus crisis.”
Rep. Alexandra Ocasio-Cortez complained that Republicans are singling out Democrat-governed states like New York and California while ignoring fraud in conservative states.
Although many states suffered fraud, California was the state that became the hotbed.
Meanwhile, many blame the expansive fraud on the state’s large population, however, critics say it reflects a dysfunctional, Democrat-run state bureaucracy.