You Would Think Losing $40 Billion Would Be a Resume Killer…

Sigh.

I wish I could say I was surprised, but President Joe Biden has tapped former California Labor and Workforce Development Agency – which includes the EDD – Secretary Julie Su to become his new Secretary of Labor.

While she has served the past two years as deputy secretary of the department, she is most well known in California for the loss to fraud of about $40 billion dollars by the Employment development Department (EDD) during the pandemic.

The Biden White House has attempted to brush aside that monumental failure by saying “Look, when the pandemic hit, red and blue states were dealing with fragile, outdated technology. And under Julie Su’s leadership, California took important steps to process a historic number of claims – one in five in the entire nation.”

No and no– the loss was easily preventable.  Industry experts have repeatedly said – and reportedly had told California very early on in the pandemic – that “bolt-on” security programs existed that would have even worked with the EDD’s steam-powered abacus of an IT system and taken only a week or so to install.

The cost? About $5 million bucks.  The savings? $35 billion dollars – at least.

One fact the Biden spokeshuman got about right was that “one-in-five number,” or 20% of all pandemic-related unemployment claims were filed in California.  However, that is not in fact a “plus” for Su as it underscores the brazenness of the fraud, the specific targeting of the California EDD as an easy mark, and Su’s egregious dereliction of duty as the state has only about 12% of the nation’s total population.

Su becomes the Biden cabinet’s first Asian-American member.

Speaking of identity, or lack thereof, that is one of the many, many reasons the EDD firehosed so much cash to fraudsters, both foreign and domestic.  The EDD – even though, as noted, it could have purchased basic fraud protection software that would work with its antiquated IT systems –  had no way to prove if an applicant was who they said they were until the end of 2020, months after the pandemic began.

The EDD also had no system to check to see if people in prison, people from out-of-state, and people from overseas – all ineligible for benefits – were getting benefits in the form of a chipless debit card pre-loaded with up to about $15,000 – each.

The EDD did not even cross-reference addresses to notice and potentially flag as fraudulent when a single home received dozens, if not hundreds, of cards (they used to have one but stopped paying for it when a federal grant ran out a few years ago.)

For example, when rapper Nuke Bizzle – now in prison – received more than a million dollars from the EDD (and then did a song about it,) at least five of the cards worth about $65,000 were sent directly to his address in Memphis, Tenn. – no questions asked.

The fraud loss estimate – done by the very department Su is most likely to head soon – is about $40 billion, though the EDD disputes that figure.  The current EDD chief also blamed the Trump administration for the problem, conveniently forgetting that it didn’t matter where the extra pandemic benefit money came from, it was the EDD who was in charge of handing it out –

Congress is reportedly sifting through certain EDD records now.

With 51(ish) Democrat votes in the Senate, it is likely Su will be confirmed as the new Secretary, though, as has been seen with the attempt to make Eric Garcetti the ambassador to India, it is possible that the baggage that is the failure that is California government may be starting to catch up to some of its more well-known exports. 

Finally, the EDD as of midnight Monday, owes the federal government – including Su’s Labor Department, $18,725,951,967.42 in principal and $122,542,469.58 in interest. How’s that for cosmic failure irony?

In other words, if Su had done her job properly, California would not be on the hook to the feds and the EDD would not be hiking unemployment taxes on businesses to cover the debt.

Beyond the EDD fraudapalooza, Su also championed AB 5, the law that practically eliminated freelance work in most industries overnight.

“As California’s secretary of labor, she championed and ruthlessly enforced a labor law that has been called one of the most destructive pieces of legislation in the past 20 years,” Congressman Kevin Kiley said on the floor yesterday (video below).  “It wasn’t me that called it that. This quote came from Gavin Newsom’s own former deputy chief of staff, Yashar Ali, who added: ‘It is truly horrific how many people have been negatively impacted by the law.’’’

Su’s support of the law seems almost visceral and, for whatever reason vengeful – though her ties to big unions may offer a clue. Kiley – even though the Senate will make the decision –  took to the floor of the House yesterday to pleaded with the administration to NOT nominate Su.

“Julie Su has been called an ‘‘architect’’ of this law. After its enactment, she used her position as California Secretary of Labor to ruthlessly enforce it,” said Kiley.  “Here is what Su said in her own words: ‘’The way to enforce AB 5 is just doing investigations and audits. That will be on both wages and tax. So we will be doing investigations and audits so that those who want to comply with the need to reclassify can do so, and those who don’t will understand that is not the kind of economy we want in California.’ Think about how callous those words are, Mr. Speaker.”

Kiley concluded:  “The position of Secretary of Labor cannot be treated as a gift to special interests. It cannot be occupied by someone who has harmed so many workers in so many ways. It cannot be consumed by the incompetence and corruption that Californians are all too familiar with.”

It seems Joe wasn’t listening yesterday and it is now quite possible the nation will get a true taste what California’s ruling blob of today – the greed, the anger, the dismissiveness, the corruption, the incompetence, the falseness, the fakery, the foolish, the failing up –  is all about.