Mark Twain is rightly considered one of America’s best and most beloved writers. His first commercial success was a short story about the California Gold Rush titled The Celebrated Jumping Frog of Calaveras County. Published in 1865, it highlighted people’s extraordinary gullibility when a tale is told well enough, and the storyteller can charm his listeners into believing anything.
That’s a description of the current governor of California and possible next Democratic Party presidential candidate.
California Gov. Gavin Newsom was a natural when he ran for governor in 2018. It was like he walked off a movie set and into the governor’s office. With his good looks, coiffed hair, bronze tan, and liberal platitudes, he easily won and set about the task of dismantling every safeguard put in place by the government to protect the taxpayer’s coin.
These “safeguards” were inadequate to begin with. But Newsom saw to it that the old Harry Hopkins liberal playbook of “tax and tax and spend and spend and elect and elect” was followed meticulously.
It has resulted in what City Journal reports is a massive “Empire of Fraud” that resulted in at least $180 billion in fraudulent payments across several state agencies.
Perhaps the most outrageous example (though not the worst in dollars stolen) was the California inmates’ fraud scheme, which cost the state at least $1 billion during the COVID-19 madness. Over 35,000 claims were filed with the Employment Development Department (EDD) under prisoner names, including more than 130 people on Death Row.
The state auditor and federal officials estimate that California lost between $30 billion and $32.6 billion in total pandemic-related unemployment fraud across all categories.
Newsom’s response to the fraud has been a mixture of “every state had problems” and “besides, I’ve fixed it and made it all better.”
Haywood Talcove, one of America’s leading fraud specialists and CEO of LexisNexis Risk Solutions for Government, was one such expert. “I was begging [federal officials] not to let the money go out like that, because it was going to be the biggest fraud in the history of our country,” he said. “Obviously, I wasn’t successful.”
For many reasons, California was particularly susceptible to the large-scale fraud schemes Haywood Talcove saw on the horizon. Not only did the state have some of the most generous welfare programs in the country; its bureaucrats had also failed to implement some basic fraud controls during Newsom’s tenure.
“They literally suspended all of the rules for the [unemployment insurance] program,” Talcove said. “[That made] it possible for anyone to get that benefit even if they weren’t entitled to it. It was very intentional. They knew what they were doing. But it caught up to them because it just got so out of control.”
PJ Media’s Matt Margolis covered fraud hunter Nick Shirley’s efforts to unmask the gigantic amount of fraud in the California hospice system.
“The operation wasn’t just fraudulently billing Medicare or Medi-Cal for services never rendered,” writes Matt. “It went a step further—serving as a training ground for fraud” by operating “as a home healthcare and hospice consulting firm” that taught others how to steal.
In-Home Supportive Services (IHSS) was particularly vulnerable to fraudsters. Shirley expressed the disgust most of us feel. “It’s sad to think about it,” Shirley said. “Here in the United States, we are literally being defrauded by people who are taking advantage of old people, young people in daycares, disabled people with autism clinics, and no one is doing anything to stop it. So I think it’s time we stand up to these fraudsters.”
Newsom’s response was to dramatically increase funding for IHSS.
Between Newsom’s first budget and his most recent proposal, the state legislative analyst estimates that total IHSS costs will have swollen by around 170 percent, with $33.4 billion proposed for the next fiscal year, including $12.5 billion from the state. According to recent estimates, taxpayers are funding nearly 800,000 IHSS providers, who offer caregiving, cooking, shopping, cleaning, and laundry services to elderly and disabled people. In about 70 percent of cases, providers and recipients are family members. According to co-author Schrupp’s reporting, the IHSS program is responsible for 41 percent of all “job gains” during the Newsom administration.
The IHSS program almost seems designed to facilitate scams. According to sworn testimony summarized in the Sacramento report, IHSS participants have falsely represented recipients’ needs; misrepresented hours worked timecards; and even secured payment after a recipient has died. The system operates largely on trust, with providers “working” in the privacy of the recipient’s home. The state’s IHSS protocols explicitly prohibit random unannounced home visits, which would be the best tool to uncover any potential rackets.
Newsom’s defenders say, “They do it too, only worse,” in other states.
“The EDD scandal is — or should be — a black eye for Newsom,” writes Dan Walters in Cal-Matters, “But three aspects should not be ignored: It also was happening in other states; it reflected pressure, during the Joe Biden administration, to speed claims processing, and the EDD had hired hundreds of new workers who were not fully trained.”
Biden either panicked or saw his 2024 prospects walking out the door. The attitude that the state should just hand out money sight-unseen, which led to death row inmates getting unemployment benefits and scammers stealing money earmarked for old people, is beyond cruel. When total COVID fraud may eventually reach $500 billion (about 10% of the $5 trillion in relief money authorized by Congress), no excuse such as “everyone did it” can be acceptable.
When he runs for president, Newsom will have to face other Democratic candidates and eventually, a Republican who will hammer him for this massive incompetence that led to the loss of so much taxpayer money.
Related: No Joke. Two GOP Candidates Are Ahead in the California Governor’s Race
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