By: Denise Simon | Founders Code
The scandal is only valued at $11.4 billion and counting. Would anything over say $500,000 come to the attention of the Governor of California or for that matter anyone else responsible to protest taxpayer dollars and law? Anyone? Not so much in California.
Lil miss Julie Su is Biden’s pick to be the Deputy Secretary of Labor.
In part from the LA Times:
“There is no sugarcoating the reality,” Su said during a press conference Monday. “California has not had sufficient security measures in place to prevent this level of fraud, and criminals took advantage of the situation.”
California has paid out $114 billion in unemployment benefits since March 2020, when the state stay-at-home orders caused many businesses to close or reduce operations, putting millions out of work. Some 19 million claims have been processed by the agency.
In addition to the 10% of benefits confirmed to involve fraud, the state is investigating another 17% of benefits involving suspicious claims that have not yet been proven to be fraudulent — about $19 billion worth.
Officials said a large number of those claims could end up being fraudulent as well.
Su said part of the blame goes to the Trump administration, which she said failed to provide adequate guidance and resources to California to counter fraudulent claims, almost all of which were filed through a new federal program that provides unemployment benefits to gig workers, independent contractors and the self-employed.
The press conference was held on the eve of the release of a state audit that is expected to be critical of California’s delays in providing unemployment benefits.
“It should be no surprise that EDD was overwhelmed, just like the rest of the nation’s unemployment agencies,” Su told reporters during a conference call. “And we now know that as millions of Californians applied for help, international and national criminal rings were at work behind the scenes working relentlessly to steal unemployment benefits using sophisticated methods of identity theft.”
While other states have also been hit with fraud, California’s population and outdated system mean it has been hit particularly hard.
The claims still being investigated include those that were part of a New Year’s Eve announcement by EDD that it was freezing 1.4 million claims pending the verification of identities.
About 1.2 million of those claims were still suspended as of last week, when the EDD said the other claimants “are either being sent a questionnaire to complete to help EDD determine if they meet eligibility requirements for continued benefits, or are receiving a Determination Notice letting them know about a disqualification and their appeal rights.”
The agency hired a contractor, ID.me, to verify the identity of claimants online, and about 30% of claims filed between Oct. 1 and Jan. 11 were blocked for fraud. The firm said it identified some 463,724 fraudulent claims during the period, which would represent more than $9 billion if the EDD had paid $20,000 on each claim.
EDD officials are also warning about new fraud schemes.
“EDD has reports that individuals are impersonating EDD and ID.me to get individuals to divulge their personal identifying information,” the agency said in a statement last week. “Californians should be aware that EDD does not send representatives to homes and neither EDD nor ID.me will contact individuals via social media and other websites.”
Su and other state officials also said Monday that they are wrestling with a backlog of claims that have not been approved 21 days after they were filed.
In announcing a strike team to evaluate the agency in July, Newsom directed action to eliminate the backlog of some 1 million claims delayed longer than 21 days, many of which required additional information from claimants by the end of September.
EDD spokeswoman Loree Levy said Monday that 99.9% of the claims in that original backlog have been resolved, and the rest will be done by the end of this month.
“Of the remaining claims, most are either pending EDD’s assessment of a potential overpayment, which doesn’t prevent payment, or EDD is waiting on a certification from the claimant required for payment,” Levy said.
Still, hundreds of thousands of new claims have flooded in since September, and the backlog of claims was at 916,000 last week, according to the most recent report by the agency.
The state’s work in the future may be complicated by the loss of top officials involved in the process. Su, whose office oversees the EDD, is being tapped by President Biden to become the number two administrator at the U.S. Department of Labor, according to a report by Bloomberg Law.
Julie Su, appointed by Governor Gavin Newsom, is the Secretary for the California Labor and Workforce Development Agency (LWDA). The LWDA enforces workplace laws, combats wage theft, ensures health and safety on the job, connects Californians to quality jobs and career pathways, and administers unemployment insurance, workers compensation, and paid family leave. LWDA oversees seven major departments, boards, and panels that serve California workers and businesses by improving access to training, promoting high road jobs, eliminating barriers to employment, and creating a level playing field for employers.
Su is a nationally recognized expert on workers’ rights and civil rights who has dedicated her distinguished legal career to advancing justice on behalf of poor and disenfranchised communities and is a past recipient of a MacArthur Foundation “genius” grant.
As California Labor Commissioner from 2011 through 2018, Su enforced the State’s labor laws to ensure a fair and just workplace for both employees and employers. A report on her tenure released in May 2013 found that her leadership has resulted in a renaissance in enforcement activity and record-setting results. In 2014, she launched the first “Wage Theft Is a Crime” multimedia, multilingual statewide campaign to reach out to low-wage workers and their employers to help them understand their rights and feel safe speaking up about labor law abuses.
Prior to her appointment as California Labor Commissioner, Su was the Litigation Director at Asian Americans Advancing Justice-Los Angeles, the nation’s largest non-profit civil rights organization devoted to issues affecting the Asian American community. Su is known for pioneering a multi-strategy approach that combines successful impact litigation with multiracial organizing, community education, policy reform, coalition building, and media work.
Frequently named to top-lawyer lists such as the Daily Journal’s “Top 75 Women Litigators” in California and California Lawyer’s “Super Lawyers,” she was the first Labor Commissioner to be included among the Daily Journal’s “Top 75 Labor and Employment Lawyers.” She has also been named one of the 50 most noteworthy women alumni of Harvard Law School and one of the 100 most influential people in Los Angeles in Los Angeles Magazine.
Su has taught at UCLA Law School and Northeastern Law School. She is a graduate of Stanford University and Harvard Law School and began her career with a Skadden Fellowship. Su speaks Mandarin and Spanish.