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Acting Labor Secretary Julie Su. (Photo: House Committee on Education & the Workforce)

Did Julie Su Lie to the Senate?

Her constant claims of EDD fraud being ‘95% ‘Pandemic Unemployment Assistance’ Are False

By Thomas Buckley, August 31, 2023 3:34 pm

Acting Secretary of Labor Julie Su may have lied to the Senate Health, Education, Labor, and Pensions Committee during her once-meaningful confirmation hearing in April.

And countless times before – and after – that.

At issue is her claim that “95%” of the state’s estimated $32 to $40 billion dollars in pandemic unemployment insurance fraud that occurred while she oversaw California’s Employment Development Department was related to one specific federal effort – Pandemic Unemployment Assistance (PUA) program (the feds had other programs as well).

That claim is impossible, per Su’s Labor department’s own recent report on fraud in the PUA program.

It is also clear that Su almost assuredly could not possibly have believed the claim to actually be true when she testified in front of the Senate committee.

The state paid out $32 billion dollars in PUA money (and another at least $85 billion in federal money and tens of billions of dollars in state funds) during the pandemic. The PUA fraud estimate the Labor Department just released works about to be about $12 billion – minimum – while the other fed programs suffered an estimated $18 billion in fraud.

$12 billion is not 95 percent of $30 billion – it’s 40% – and, as Su must have been aware of the amount of PUA money the state dispensed prior to her Senate hearing, it is unfathomable that she truly believed that statement to be even remotely truthful.

Note – it is believed that the $30 billion and the state’s own fraud estimate of $32 billion are low, but can be used for percentage/comparison purposes. And, no, the agency did not respond to multiple requests for comment.

Blaming the PUA program has been the EDD’s and Su’s go-to – along with “we were really busy” –  political cover story as it both grants absolution and smears the former administration of Donald Trump. Su has also said most other states had a similar 95% problem – again, a mathematical impossibility she could not possibly have helped but to be aware of.

The Labor department PUA fraud report – many many months overdue, it should be noted – states that about 36% of $117 billion in PUA money was “improperly” paid. For clearly political reasons, the report aggressively stresses that that does not mean all of those payments were fraudulent, a stance reiterated by a department spokesperson.

“The PUA improper payment rate is an estimate of all overpayments, underpayments and those payments that could not be determined as valid or not. It’s not an estimate of fraud,” the spokesperson stated.  “Improper payments can occur because of errors by agencies and their vendors, claimant errors, and should not be compared.”

Considering the rates of fraud found in the other fed programs and at the state-level, that attempt at bureaucratic deflection is not credible; even the report notes that 17.4% of payments “could not be determined as valid” and a similar percentage was merely “overpaid” (possibly through “no fault” of the claimant.)  Interestingly, if on the off-chance the “fraud” rate is lower, it makes Su’s “95%” claim even more impossible.

The report makes another claim – a claim Su herself has also repeatedly made – that the federal government ordered the floodgates to be opened and that they stay open.

“To ensure benefits reached individuals and the economy rapidly, Congress significantly limited states’ ability to add additional eligibility requirements to the program,” the spokesperson said.

That is – at best – a one-quarter truth. True, the PUA program allowed for self-certification and was, therefore, most at risk for fraud and the feds told states to allow self-certification as long as they remind claimants they are making said claims under the penalty of perjury.

Admittedly, a significant temptation and a wide-open door for bad actors.

However, the initial federal guidelines to the states for operating the program DO NOT bar them from taking their normal anti-fraud measures; in fact – particularly in the updated guidelines issues in the months after the lockdowns, etc. went into full swing – the feds repeatedly stressed the need for robust fraud prevention, even agreeing in August 2020 to pay for more protection at the state level.

In other words, nothing was stopping Su’s EDD from launching fraud investigations if/when they noticed that 137 chipless debits cards were mailed to the same address or that cards – pre-loaded with upwards of $15,000 – were being mailed out of state.

Despite her claim she “shut the door” on fraud the moment she realized it was occurring, Su’s EDD could have prevented a massive amount of the fraud that took place but chose not to.

As for her Senate Testimony, the department spokesperson did not respond to the following question: 

“It seems the statements made by Acting Secretary Su to Congress about her time (at the EDD)  were, at best, misleading when she said that “95%” of the fraud was through the PUA program.  With an overall California fraud estimate between $32 and $40 billion, that 36% PUA fraud estimate puts that number closer to one-third (to 40%).

Does the Secretary care to comment on the difference and/or will retract her statement(s)?”

As the Biden administration is currently flouting the constitution by keeping her in the job without being confirmed by the Senate, that question – sadly – may be moot.

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