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EDD website. (Photo: EDD.ca.gov)

Congress Now Knows What It’s Like to Deal with the EDD

EDD had to borrow billions from the feds because of California’s failure to prevent the international looting of its unemployment trust fund

By Thomas Buckley, June 10, 2023 7:24 am

Millions waited on hold – some literally for days. Hundreds of thousands of legitimate pandemic benefit claims were denied or delayed for months. Computers crashed. Claimants were insulted on Twitter. State legislators were ignored. $40 billion went to fraudsters. The dog ate more than just its homework.

Californians know all this about dealing with its rightfully much-maligned Employment Development Department – and now Congress does, too.

Five months after they asked, the House of Representatives Oversight and Accountability Committee has finally begun receiving pandemic-related documents and information from the EDD.

According to a committee aide, the EDD has recently begun providing the information demanded in January.  This comes after at least three requests were deemed unresponsive – the first reply involved blaming President Trump, or essentially ignored.

Among other things, the committee is attempting to get to the bottom of the massive fraud perpetrated against the EDD during the pandemic. The current estimate is that the EDD lost about $40 billion to illegitimate claimants, including prisoners (and not just from California prisons), garden variety local scammers, and international fraud rings, all of whom simply walked right into the department’s completely unprotected system.

The EDD did not reply to a request for comment.

Because of this failure to curtail the international looting of the unemployment insurance trust fund, the EDD had to borrow billions from the federal government to cover actual claims.  Currently, the EDD owes $17,398,640,762.73 and another $207,287,329.34 in interest and, despite making a large re-payment in early May, continues to borrow from the feds at the clip of about $139 dollars a second, and has imposed a surcharge – which could total hundreds of dollars per employee over the next few years – on California businesses unemployment insurance taxes to pay back the debt.

Whether or not the EDD’s decision to begin to comply with the request is related to the sputtering labor secretary nomination of its former boss, Julie Su, is unclear.

While exactly what has been turned over is not yet clear, the committee had asked the EDD – which it characterized as “plagued by rampant waste, fraud and abuse” – for the following documents and information:

  1. All processes and procedures related to the disbursement of unemployment insurance benefits during the pandemic, including policies and procedures intended to ensure payments are made to the proper individual, and to ensure that the individual is a qualified recipient of unemployment insurance;
  2. All documents and communications between employees of the California EDD and employees of the U.S. Department of Labor regarding the state’s UI benefit program;
  3. All documents and communications related to efforts to prevent payment of fraudulent UI claims;
  4. All documents and communications related to efforts to recoup UI claims paid improperly; and
  5. All documents and communications related to identifying the total number of improperly paid UI benefits and documents sufficient to show whether those funds remain in the United States or were transferred to entities outside the United States.

Considering the EDD’s track record of jaw-dropping incompetence, the Globe thought it would be a good idea to remind them of the committee’s address so future documents do not go astray:

Committee on Oversight and Accountability

2157 Rayburn House Office Building
Washington, DC 20515

We don’t want the next batch to go to Romania – or Memphis – or Louisiana – or San Quentin – or…

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