California Auditor Proclaims Unemployment Agency “High-Risk”

For fraud that took place on the watch of Julie Su, Biden’s pick for Labor Secretary

California’s Employment Development Department (EDD) meets the criteria to be designated “high-risk,” according to a new report from State Auditor Grant Parks, because of “inadequate fraud prevention and claimant service, as well as a high rate of overturned eligibility decisions in its unemployment insurance program.” 

During the pandemic, the EDD’s fraud prevention approach “was marked by significant missteps and inaction that led to billions of dollars in unemployment benefit payments that EDD later determined may have been fraudulent.” According to the report, the EDD was also “unable to accurately quantify its inappropriate UI payments, contributing to the delayed publication of California’s financial statements for the two most recently published fiscal years and to modified audit opinions on those statements.” And so on, but there’s more to it. 

Julie Su, secretary of California’s Labor and Workforce Development Agency, was in charge of EDD at the time. On Su’s watch, unemployment fraud exceeded $30 billion, and EDD sent out $140 million to at least 20,000 convicts, convicted murderers among them. Fraudsters across the country had a field day. Rapper Nuke Bizzle even posted a video bragging about “my swagger for EDD” and “swiping 10K a day.” 

Julie Su was also a supporter of AB-5, the 2019 law targeting independent workers, from truckers and Uber drivers all the way to freelance writers, editors, videographers, and even musicians. Su was on record that those jobs are “not the economy we want in California.”  

Proposition 22 rolled back the main provisions of AB-5, but Su testified, “I don’t remember how I voted on that.” Asked if AB-5 was a good law, Su said, “tell me what you mean by that” and said it was “important to enforce laws that are passed.” 

Despite this record, Julie Su is Joe Biden’s choice for Secretary of Labor. In July, Su set a record for the longest time a nominee has lingered without a confirmation vote. While a Senate vote awaits, recall that Biden’s choice for comptroller of the currency was Saule Omarova, who attended Moscow State University on a Lenin Personal Academic Scholarship. 

The Lenin Scholar sought to eliminate independent banks and have the Federal Reserve control every American’s money. That was profoundly troubling to a number of senators. Based solely on her public positions, statements, and writings, Sen. Tim Scott could not think of a nominee “more poorly suited” to be comptroller of the currency than Omarova. 

If any senator, taxpayer, or American worker can think of no one more poorly suited to be Labor Secretary than Julie Su, based solely on her performance overseeing California’s “high-risk” EDD, it would be hard to blame them. 

K. Lloyd Billingsley is a Policy Fellow at the Independent Institute and a columnist at American Greatness.
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