Fraud

California Has Seen a Staggering Amount of Unemployment Fraud During the Pandemic

But where is the outrage?

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"I'm madder than a penguin on Miami Beach over all the mealy-mouthed politicians whining about the economy and not doing anything about it," wrote pseudonymous columnist Ed Anger, in the now-online Weekly World News. The one-time tabloid, which recently ran a feature story about an alien orthodontist who finally returned home, had long published Anger's vitriolic and (hopefully) satirical screeds.

After sifting through news myriad stories about California's ongoing scandal at the Employment Development Department, however, I'm left wondering: Where is Ed Anger when you need him? I'm "pig-biting mad" about the ongoing unemployment mess, as an angry Anger might write. Yet California's elected officials and a weary public are treating it like any garden-variety bureaucratic failure.

This is one of the most infuriating scandals ever to plague our state. The department, which is responsible for paying out unemployment insurance claims, has been incapable of paying legitimate claims even as it has paid as much as $31 billion in fraudulent ones, often to inmates. Think about those staggering losses. They would be enough to make a dent in any number of the state's infrastructure, budgetary, and debt-related problems.

The stories are as unbelievable as the Weekly World News' latest Elvis sighting. Here's a desk-pounder from CBS Los Angeles: "A Fresno girl who just celebrated her first birthday is collecting $167 per week in unemployment benefits after a claim was filed on her behalf stating that she was an unemployed actor."

The Southern California News Group reported last month that one man "is suspected of using the identities of 23 inmates and others to obtain more than $3 million in state unemployment benefits."

Approximately 10 percent of the paid claims have been fraudulent, with another 17 percent under suspicion. This will be "the largest fraud investigation in the history of America," according to one expert interviewed by CALmatters. Part of the blame, it notes, is from "the state's own failure to cross-check unemployment applications with prison rolls."

Who are these incompetents who are running this agency? The EDD says it is "one of the largest state departments with employees at hundreds of service locations throughout the state." It has great pretensions, noting on its website—the same one that continues to crash and can't process legitimate jobless benefits—that it has "connected millions of job seekers and employers in an effort to build the economy of the Golden State."

If California is dependent on the EDD to boost its economy, then we are in the same boat as that proverbial penguin waddling through Miami. The Sacramento Bee reported last month that the department's website remains "plagued with difficulties." And "nearly six months after (Gov.) Newsom boldly promised to clear a backlog of 1 million unemployment claims at the EDD, the problem continues to worsen," the Bee's Gil Duran noted.

These failures aren't happenstance but are the result of mismanagement and incompetence at extreme levels. The COVID-19 situation applied additional strains on the department, but that's no excuse.

"Although it would be unreasonable to have expected a flawless response to such an historic event, EDD's inefficient processes and lack of advanced planning led to significant delays in its payment of (unemployment insurance) claims," wrote California State Auditor Elaine Howle, in an emergency audit released in January. The department's call center only answered 1 percent of calls that Californians had made to check on their claim status.

If you're not angry enough, consider this hard-to-believe fact. Julie Su, the state labor secretary who was responsible for the department, may receive a big promotion. Republicans pointed out the obvious as she faced Senate confirmation hearings to serve as President Joe Biden's pick for deputy secretary of the federal department of labor.

"So, while you may not be personally responsible for every case of fraud that happened, the fraud did happen on your watch," Sen. Richard Burr (R–N.C.) said during the hearing, according to news reports. "You ordered the agency to eliminate some important safeguards to speed up payments, which led to even more fraud." Su's confirmation vote is expected next week—and this unconscionable scandal is unlikely to stop her.

Meanwhile, Gov. Gavin Newsom doesn't seem to be paying any noticeable price for this matter either, even after he buried his bad-news EDD strike-team report showing that he won't be able to clear up the backlog as promised. The Bee chided him for dropping that report on a Saturday night, where it was unlikely to get much coverage. Nevertheless, Newsom's approval ratings are improving, as are his chances to deflect a recall.

Welcome to the world government, where no good deed goes unpunished and no level of incompetence goes unrewarded. Is this how you want the healthcare system to be run—by bumbling bureaucracies, dysfunctional IT systems, and elected officials who get promoted when things go awry? I don't know about you, but I'm channeling some serious Anger.

This column was first published in The Orange County Register.

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  1. Republicans are the biggest fraud con men on this planet. The Catholic church soaked up millions and millions. Big business pulled in billions. The oil industry pulled in millions and some cases the executives paid themselves and then shut the company down. Fuck you for only focusing on the little guy. But it defines you as a Republican.

    1. A church isn’t even a business. It doesn’t earn or lose income but collectively they probably got billions in paycheck money if you were to add it up. And they’re constantly getting handouts and special privileges And it’s all by design so it’s even more scandalous then some one time questionable interpretation of “employment”.

      1. You are ugly, and your mommy dresses you funny.

        1. Also ugly on the inside.

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        2. You left out being abysmally stupid and a lying lefty piece of shit besides.

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            2. “Homosexual lovers spat today? idiots”

              The erotic fantasies of imbecilic lefty shits is of no interest to me.
              Fuck off and die.

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      2. Typically catholic = democrat

      3. Lord of Strazele, It seems like you didn’t read the article. It’s about $31B in unemployment fraud with an example of someone stealing 23 people’s identities. 10% of claims were fraud and another 17% are considered suspicious. You seem to be defending this like the state has done a great job?

        1. He’s helping Greenhut establish his cred as a ‘libertarian.’

          That’s the rhetorical function of more than one sock here.

          1. a/k/a “that’s a feature not a bug”

      4. Wrong. Churches ARE businesses. 501 C3 is still a business tha tmakes profit

        The difference is that “profit is not a primary goal”

        Dont post while being so ignorant.

        1. “Wrong. Churches ARE businesses…”

          You.
          Are.
          Full.
          Of.
          Shit.
          Quit posting while drunk and stupid, and *please* fuck off and die.

      5. Deflect & redirect much?

      6. A church isn’t even a business

        HAHAHAHAHAHAHAHA…heh..heh… oh, wait, you are serious?

        1. Agree. Anyone who doesn’t believe a primary goal of any church is to sell itself and get more money coming in is kidding themselves. There may not be shareholders to split profits with, but preachers (at least most Protestant ones) certainly profit more if they are effective at growing church membership and increasing donations.

    2. Hey look Lard of Strudel made his usual shitstained appearance.

      1. Have no fear the government will be making up for lost stimulus and unemployment dollars through massive tax increases. Don’t believe for a moment that it won’t trickle down to the middle class.

        1. But, only those in prison.

    3. Reason reserves it outrage for the billions to petty crooks while ruling class crooks take trillions.

      Benjamin Tucker’s critique of Herbert Spencer in 1884 applies to most all of Reason’s articles.

      It will be noticed that in these later articles, amid his multitudinous illustrations (of which he is as prodigal as ever) of the evils of legislation, he in every instance cites some law passed, ostensibly at least, to protect labor, alleviate suffering, or promote the people’s welfare. He demonstrates beyond dispute the lamentable failure in this direction. But never once does he call attention to the far more deadly and deep-seated evils growing out of the innumerable laws creating privilege and sustaining monopoly. You must not protect the weak against the strong, he seems to say, but freely supply all the weapons needed by the strong to oppress the weak. He is greatly shocked that the rich should be directly taxed to support the poor, but that the poor should be indirectly taxed and bled to make the rich richer does not outrage his delicate sensibilities in the least. Poverty is increased by the poor laws, says Mr. Spencer. Granted; but what about the rich laws that caused and still cause the poverty to which the poor laws add? That is by far the more important question; yet Mr. Spencer tries to blink it out of sight.

      1. +10 pts for the deep archive reference.

        Meanwhile…Rome is burning

    4. You are ridiculous.

  2. “It is high time for me to put an end to your sitting in this place, which you have dishonored by your contempt of all virtue, and defiled by your practice of every vice; ye are a factious crew, and enemies to all good government; ye are a pack of mercenary wretches, and would like Esau sell your country for a mess of pottage, and like Judas betray your God for a few pieces of money.

    Is there a single virtue now remaining amongst you? Is there one vice you do not possess? Ye have no more religion than my horse; gold is your God; which of you have not barter’d your conscience for bribes? Is there a man amongst you that has the least care for the good of the Commonwealth?

    Ye sordid prostitutes have you not defil’d this sacred place, and turn’d the Lord’s temple into a den of thieves, by your immoral principles and wicked practices? Ye are grown intolerably odious to the whole nation; you were deputed here by the people to get grievances redress’d, are yourselves gone! So! Take away that shining bauble there, and lock up the doors.

    In the name of God, go!”

  3. You know, the Employment Development Department’s slogan, Our Business is Your Success, can be interpreted in more than one way.

  4. it has paid as much as $31 billion in fraudulent ones, often to inmates. Think about those staggering losses. They would be enough to make a dent in any number of the state’s infrastructure, budgetary, and debt-related problems.

    You could build almost 1/3 of a high-speed rail system for that.

    1. It’s fifteen years from now, and CA has completed their High-Speed Rail projects, and, instead of being utilized by upper-middle-class executives to get to work, it is utilized by unemployed folks to go back and forth between Six Flags and Disneyland. The executives have been working from home for years… from Texas.

      1. Those illegal Aliens need to get around.

        Youre so cold hearted…

    2. Theres something deliberate there (paying inmates) when no one even filters the mailing addresses. Block exclude any payments addressed to a PRISON!!

      So easy even a 5th Grader could do it

      Sadly, 3rd Graders are running California (into the sea)

      1. I don’t believe that the payments actually *went* to the prisons, I think they were just claimed in the name of people who were in prison.

        > [O]ne man “is suspected of using the identities of 23 inmates and others to obtain more than $3 million in state unemployment benefits.”

        So the folks in the prison were the victim of identity fraud. Unless they were in on it. Article doesn’t say.

    3. As I recall, $31 billion might have been the original price tag to build the full-version of Brown’s crazy train.

  5. A Fresno girl who just celebrated her first birthday is collecting $167 per week in unemployment benefits

    I’m confused, why isn’t she getting the $300 federal bonus?

    1. Biden hsn’t been in office long enough – give him time.

    2. MAybe shes prostituting and doesnt need it?

      Recent story tie in…

      Fruits AND Nuts! Cali!

  6. If there’s no widespread outrage over this, can it really be called “a staggering amount”? It’s just business as usual and nobody gives a shit.

  7. Cali will now spend $40 billion on an investigation into where that $30 billion went.

    1. Hey. That sounds like Texas logic.

  8. That criminal dumb $#!+ Biden appoints another corrupt blood sucking Kali-unicronifornia poly-tick-cian to control our work lives. So appropriate for the vampire cult of jack-asses.

  9. First, it’s California.
    Second, the numbers are hard for people to comprehend.
    Third, in the end, the numbers are hard to comprehend because who really sees the impact in their daily check or taxes?

    1. First, it’s not just California. It started in Washington (state) but has spread to pretty much everywhere. It’s been a vicious scam here in Ohio since last July.
      Second, I reject the Barbie (1992) complaint. Yes, math is hard. So is driving and a thousand other things you do successfully every day. Be an adult and learn.

      (And get off my lawn! I’m feeling curmudgeonly today.)

      1. That’s fine, but this article is about California. People don’t expect anything else, but the state handing out money like there’s no tomorrow.

        Sure. We can reject the Barbie complaint, but that doesn’t make it go away. Math is very hard at these numbers and with this complexity in the economy. We’ll have to point out exactly what this means for everyone in their wallet and if it will amount to anything that they really need to be enraged about.

        1. Hitting them in the wallet is one of the most effective policy enforcements known to man.

          People tend to not react to anything, until their ox is gored.

    2. Million, billion, trillion, no one really even knows what that means any more. The Fed just prints that stuff up at will and the government just keeps spending away.

  10. As a Californian I can say that Californians dont’ complain about shit like this because it’s pointless. Politicians are gonna do what politicians gonna do. And no point making a fuss with the media, because they’re too busy fellating the government. The EDD is not an elected office, so what good does voting do? No matter who wins, even if it’s a Republican (hah, I joke), the bureaucracy never changes.

    But you can tell that Californians are pissed. We have some major emigration going on. (For those in Rio Linda, “emigrate” means to move AWAY). Not everyone can do this, but it’s happening enough that there’s a U-Haul shortage in the state. Smaller business who can move will move. Big business knows who feeds them, so they stay, and tiny local businesses stay because they are local. But the mid sized guys are bailing. Hell, it’s so bad places like Idaho and Texas are actively trying to keep ex-Californians OUT.

    The pandemic rule in this state is going to have consequences at the ballot box. There’s a recall coming up for the governor, and there’s still the upcoming 2022 elections. Not saying the Republicans are going to sweep, fat chance, but the not all Democrats are Newsom puppets. I expect the hyper-Woke wing of Democrats to make some big wins (ugh), but also the neo-liberal wing of Democrats (those that can actually do math). Taking damage will be the stupid hand wringing wonky micromanagement shits. They won’t all go, but I do see state Democrat party coalition unity circle jerk coming to an end. When one party rule is mandated by law (and it essentially is in California), that one party is gonna split.

    1. Not saying the Republicans are going to sweep, fat chance, but the not all Democrats are Newsom puppets.

      I’ll believe it when I see it. California is the end-state of any institution that marches to the tune of the radical left and revolves around the principle of decadent solipsism. People are trying to jump ship because they know there is no way to fix things from within. And of course, wherever they migrate, housing and the general cost of living absolutely skyrocket because the locals can’t keep up with the ridiculous amounts of liquidity the California migrants inject into the local economy, which causes micro-inflation.

      1. Not too many Californians coming to my area of east TN. But more than there used to be. Ten years ago a CA plate was an oddity, now it’s a couple times a week. Right now they are only a small portion of widespread exodus from all sorts of places. But the constant factor is that yes, they are often bringing assets well out of proportion to the region.

        Right now it is so bad that, if you are not a cash buyer you have very little chance of closing on a house. You may get a contract, but sales prices are running so far ahead of comps that you will probably be refused financing. The last housing bubble broke late here so the banks still remember and are not real interested in repeating things just yet. That and, during the bust, about the only business they got was financing the people building rental properties. So all those being forced into becoming temporary renters is not seen as a terrible loss. Since it is allowing the developers to make their payments.

    2. Comment o the Day!

    3. Sure. Caitlyn Jenner has jumped into the race as of yesterday.
      That’ll fix it all for sure.

  11. “California’s elected officials and a weary public are treating it like any garden-variety bureaucratic failure”

    VOTE BUYING is popular. Both ways.

    So is Prostitution. Both Ho and John get something. Everyones happy till the VD sets in.

    I prefer Prostitutes over Politicians. The Hos are more honest. They screw one person at a time.

    Politicians screw millions at once.

    1. Nah. Group gropes are well known.

  12. I’m sure its not just the EDD that is screwed up, probably the voter polls are as well

    1. It all started with the DMV. And, that isn’t exactly new.

      When I turned 16 in 1973 all DMV offices were absolute nightmares. After a two hour wait one gets into the front of the que only to hear, ‘This is the wrong line. You need to go over there to the “B” line.” It was a familiar refrain.

      It never improved in 47 years.

      Us Californians are like the abused wife. We are so beaten down, we just take it and believe we deserve it. We don’t fight back. We don’t leave the marriage. We just tell ourselves the government will improve soon.

  13. “But where is the outrage?”

    In the bottom left-hand drawer, along with honesty and statesmanship.
    (and a fifth of whiskey)

  14. They should have privatized UI a long time ago. The states cannot handle it and do a poor job even prior to 2020.

    Only shitty democrats like to keep things in house so they can fuck it up and use it as money for their grift machine.

    1. “They should have privatized UI a long time ago.” Indeed. Most of the libertarians I know have been promoting that idea for decades.

      1. I question why we even have it? It’s another of those great social welfare programs that fall under the ever growing heading of “human rights”.

        1. Exactly. If people want it, they would be able get it through private insurance companies. Some people will want it — some won’t.

  15. Another example of “Fuck up, move up.”

  16. So you’re saying the government declared an emergency, suspended even its usual lackluster oversight, piled up a shitload of money to help out, and some people got in line more than once to grab some? How completely unexpected.

  17. Greenhut does not understand – the reason that people are unemployed is social injustice. In a just world, everyone would have a nice job and get paid lots of money. California is trying to rectify this wrong and everyone taking unemployment checks by fraud is just taking what they are entitled to.
    Don’t you know. Seriously, that’s why the politicians are not angry.

    1. Yeah Greenhut is a leftie at heart..anyone at Reason who lives in a woke city is a good little bolshevik…they can’t help it.

  18. EXACTLY why you don’t stuff Gov-Guns into markets. Exactly what does an armed robber care about in playing fair or returning your *stolen* items in good faith?

    The place for Gov-Guns is to PROTECT you from armed robbery; not to carry out armed robbery.

  19. Another way central banking and their printing press causes a society to become corrupt. No one cares if you lie/cheat/steal because our leaders do….they get free money from the Fed and when they get in trouble they get bailed out..again and again. Well if Goldman Sachs and the woke industries get free money why not me? I worked with a professional grifter..they were great in the interview, lied to the max about their resume but could talk the talk..problem was after day one it was obvious they had zero work ethic and didn’t have smarts either. And they lasted for over a year….the folks that hired this person didn’t want to admit they made a mistake cause it would look bad on them..in one party States…this behivour is no big thing..there is no other party to point it out and win elections….lie/cheat/steal/riot its all ok now…nothing to see here with your priviledge.

    1. Your grifter experience happens everywhere. I probably had twenty different employers in my lifetime and saw plenty of it.

      It’s especially beneficial to the “protected classes”. No one is willing to risk it all by terminating a non-white male grifter like that.

      I had close connections at Xerox back in the days when Xerox was the king of business printing. When times got tuff, they went through a purge. Someone in the SF office finally had the guts to let a long time, problem employee go that had only been passed around like a hot potato because he was black. This had gone on for years.

      The management layoffs provided a path to address this long term problem that no one had been willing to deal with.

      Only they couldn’t find the guy to give him notice. He hadn’t been in the office in more than two years. When they finally were able to track him down to let him know, they found him living in Seattle and his paychecks had been mailed to his Seattle home for years.

      1. Ok..I know exactly what you are saying…”Xerox the Diversity Company” do you recall that tag line in the 90’s? I had the “luck” to go there after B school and the place was nuts..it was wokedom before wokedom..at the outsourcing division I had to manage the “quota” stats..yes for the region I was the Marketing Director I had slots for all sorts of “tribes” which seemed to grow annually..and your right..taking the eye of the ball and also being stupid (do you recall “Ask Once”..which was Google before Google but the idiot copier sales VP’s had no idea what they had (which was Xerox’s other flaw…GUI, Ethernet and so on) passed. Eventually like Kodak the market punished Xerox…I doubt wokedom is much in place there anymore…it went down with commercial printing and their revenue…get woke..go broke…

  20. Cal should hire a few thousand of the unemployed to process (and scrutinize) the applications of the rest. Same money, better result. Duh!

    1. Hiring prisoners is considered slave labor and not allowed. Not even to make license plates.

  21. And Biden and Pelosi want to use California as a model for the rest of the country. That would be like using Adolph Hitler as a model for tolerant behavior.

  22. Well, what’s he going to do? Use his home state of Pennsylvania as a model of government excellence?

  23. The one year old getting $167 a week is not so bad, hopefully the child gets fed on that. Tom Brady and Giselle reprtedly got hundreds of thousands for one of their businesses, even though collecitively they are worth nearly $100 million or so.

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