Rep. Michelle Steel ignites Senate inquiry into Su
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Julie Su gets grilled in Congress with CPC report
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Dear John,
Acting Labor Secretary Julie Su testified in front of the House Education and Workforce Committee last week and it’s worth your time to watch the grilling ([link removed]) she received from California Congresswoman Michelle Steel. Rep. Steel began her questioning by introducing California Policy Center president Will Swaim’s recent reporting on Su, which she entered into the Congressional Record ([link removed]) .
“I want to submit for the record this article from the San Bernardino Sun published on April 6th, titled ‘Julie Su Prepares to Forgive Herself for Julie Sue's Mistakes,’” Steel said.
Readers will remember Swaim’s article shared in this newsletter last month, exposing that Su is “prepared to force U.S. taxpayers to pay off California’s loss of some $30 billion in federal COVID-relief funds” stolen via bogus unemployment claims by fraudsters — including international crime gangs — while Su oversaw California’s Employment Development Department.
Swaim explained that the “news is buried in California’s 2022 annual comprehensive financial report, an otherwise obscure document filed on March 15.” Turns out Su’s Department of Labor plan allows the federal government to forgive and forget the billions lost to fraud on her watch so long as California made “such action as reasonably necessary to recover” those stolen billions.
And how will federal officials know whether California took such reasonable action? Because California officials have told them so, of course!
At last week's hearing, Rep. Steel asked Su point blank: “Does DOL intend to forgive the nearly $30 billion in fraudulent payments that the California EDD paid out to fraudsters, scammers and known international organized crime rings that occurred under you in California?”
Not surprisingly, Su responded with the usual bureaucratic word salad. However, her testimony drew immediate attention from the U.S. Senate.
Senator Bill Cassidy, M.D. (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and Senator Mike Crapo (R-ID), ranking member of the Senate Finance Committee, sent a letter to Su ([link removed]) Wednesday about her testimony.
“We write to express our concern that the U.S. Department of Labor (DOL) may be preventing the recovery of federal unemployment insurance funds lost to fraud by California’s Employment Development Department (EDD),” the letter begins.
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Watch Rep. Michelle Steel grill Acting Labor Secretary Julie Su during the May 1 House Education and Workforce Committee hearing
The letter continues:
“While serving as Secretary for the California Labor & Workforce Development Agency (LWDA), you waived basic fact-checking and fraud prevention requirements for federal pandemic-related unemployment insurance (UI) payments … Even California’s own state auditor found that ‘[d]espite repeated warnings, EDD did not bolster its fraud detection efforts until months into the pandemic, and it suspended a critical safeguard.’ As a result of EDD’s failures, including to verify claimants’ identities, it is estimated to have mistakenly paid approximately $32.6 billion in fraudulent UI payments during the pandemic. This is more than double the annual budget of DOL.
Under your leadership as Acting Secretary, DOL issued Unemployment Insurance Program Letter No. 05-24 stating that, to allow states to 'be forward looking,' the agency will 'defer to states to apply their finality laws to the CARES Act UC programs.' ... DOL’s guidance therefore appears to allow California to shift the consequences of a still unknown amount of federal funds that was lost under your leadership as Secretary of LWDA to the American taxpayer.”
The Senators' letter asks Su to answer a series of hard-hitting questions and “provide all responsive documents requested by May 22, 2024,” including correspondence with any California state government officials about the debacle.
The story was covered by the New York Post ([link removed]) and Fox Business Network, which spotlighted Swaim’s article. (Watch the Fox Business highlight here ([link removed]) .) CPC board member David Bahnsen appeared on the Fox segment and called the loss of billions to fraudsters “totally inexcusable.” Bahnsen said that taxpayers will be “paying for it for years and years to come.”
Thanks to supporters like you, California Policy Center is able to deliver this kind of watchdog investigative reporting that is holding government accountable. If you're inspired to support our work with a gift of any size today ([link removed]) , it will help us continue the fight and launch CPC's new justice center.
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Watch the Fox Business segment here ([link removed])
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New Podcast ()
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** Radio Free California #330: Singing That Killers of the Flowers Tune
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On this week's podcast: Congress raises the heat on former California labor secretary Julie Su. Violence at UCLA was almost a certainty when state officials appeased anti-Israel protests, but the L.A. Times knows who’s really at fault: conservatives. Bonus: Lance Christensen talks with Jonathan Zachreson and Scott Davison on California’s Protect Kids ballot initiative. Listen now. ([link removed])
Upcoming Events ()
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One of the greatest barriers to participating in local government is simply not knowing the process — and one of the greatest impediments to government accountability is for that process to be too complicated. California Policy Center attorney Julie Hamill joins Nathan Fatal with the Leadership Institute next week for a virtual event on Wednesday, May 15, 2024 at 4:00 p.m. to discuss the legal tools you can use to ensure government represents the people's interests.
Date: Wednesday, May 15, 2024
Time: 4:00-7:00 p.m.
Register for the Zoom Link Here ([link removed])
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** Stop undermining democracy, governor! Let us vote on the Taxpayer Protection Act.
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Gov. Gavin Newsom’s attorneys argued before the California Supreme Court this week against the right of Californians to vote on a statewide initiative that has already qualified for the ballot: the Taxpayer Protection and Government Accountability Act (TPA). CPC's Lance Christensen explains why the governor should not be fighting to deprive Californians of their constitutional right to vote in November. Read the Orange County Register op-ed. ([link removed])
** ICYMI: How California's College System Lost Its Way
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Incremental state legislation over the years has reduced the once independent and robust tiered system — California Community Colleges (CCC), California State University (CSU) and the University of California (UC) — to an amalgamation of misaligned and competing colleges and universities where academic excellence and student needs have been deprioritized while administrative budgets have ballooned. Read CPC intern Peter Constant's excellent explainer here ([link removed]) .
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