Former US President Donald Trump has declared the start of a major 'fraud investigation' targeting the state of California. This announcement comes amidst ongoing probes in Minnesota concerning allegedly fraudulent daycare centres operated by Somali immigrants for federal grants.
Trump's Allegations and Political Jab
In a post on his Truth Social platform on Tuesday, Trump directly attacked California's Democratic leadership. He claimed, "California, under Governor Gavin Newscum, is more corrupt than Minnesota, if that’s possible??? The Fraud Investigation of California has begun." In his statement, he deliberately misspelled Governor Gavin Newsom's name as "Newscum." This move aligns with his scheduled address to House Republicans at the recently renamed Trump Kennedy Center.
However, Trump did not provide specifics on the investigation's focus or the state or federal agency conducting it.
The Scale of Alleged Fraud in California
The call for an investigation follows persistent claims by Congressman Kevin Kiley (R-CA) about rampant fraud in the state. On December 21, Kiley declared on social media platform X that 'California is the Fraud Capital of America'. He listed staggering figures to back his claim:
- $32 billion in unemployment fraud
- $24 billion in homeless funds reportedly "lost"
- $18 billion spent on a 'nonexistent bullet train'
- $650 million on a scrapped 911 system
Kiley cited a scathing State Auditor's report that identified eight separate state agencies as "high-risk," meaning they exhibit serious "waste, fraud, abuse, or mismanagement." He asserted that this number has doubled during Governor Newsom's tenure.
The EDD Fraud Scandal and Julie Su's Role
A significant portion of the alleged fraud centres on California's Employment Development Department (EDD). As COVID-19 spread, Governor Newsom declared a state of emergency in March 2020. The federal government subsequently sent funds via the CARES Act, administered through the EDD.
At the time, the department was overseen by Julie Su, who now serves as the Acting US Labor Secretary in the Biden administration. Reports indicate the EDD became a prime target for fraudsters during the pandemic.
Shocking examples of fraud include a woman from Northern California filing around 100 fake claims, and state prison inmates submitting 35,000 claims, leading to $140 million in undue benefits. Even notorious convicted murderers like Scott Peterson and Cary Stayner filed fraudulent claims from death row. In total, death row inmates filed 158 claims, receiving $420,000.
The scandal gained notoriety when rapper Nuke Bizzle (real name Fontrell Baines) was arrested after boasting about EDD fraud in a music video. He was sentenced to six months in jail. In his song, he rapped, “I done got rich off EDD … I’m in Dior havin’ money fun … Ten cards, I’m swiping 10K a day.”
According to a report by the California Globe, after becoming Acting Labor Secretary, Julie Su "forgave $32.6 billion of California's debt." The EDD itself admitted to pandemic-era losses of approximately $55 billion.
Political Repercussions and National Context
Trump's announcement amplifies a growing political narrative targeting Democratic-led states over financial mismanagement. It directly follows the controversy in Minnesota, where Governor Tim Walz recently dropped his bid for a third term amid a child care fraud probe.
The framing of California as a hub of corruption, with figures running into tens of billions of dollars, is set to become a key talking point. The focus on Julie Su links state-level administration to the current federal Biden administration, raising the stakes of the investigation.
As the situation develops, all eyes will be on which agency takes up the investigation and what specific charges or findings emerge from this high-profile political and financial scandal.
