California was once a beacon of opportunity. Today, our great state maintains its natural blessings and abundance of potential, but both are being smothered by government inefficiency and fraud on a staggering scale.
From unemployment benefits to homelessness programs, billions flow through Sacramento with little real oversight — and that’s by design.
California didn’t stumble into this accountability vacuum; it engineered it. Lawmakers dismantled the Assembly’s dedicated oversight committee and buried its responsibilities within a budget subcommittee that’s proven unwilling — or unable — to demand answers.
The result is predictable: Waste goes unchecked. Even when the independent state auditor flags fraud risks, those warnings are ignored roughly 75% of the time.
This isn’t just mismanagement; it’s a systemic failure.
Fraud is not unique to California, and every state faced challenges during the pandemic. But California’s failures stand apart, not just in scale, but in how long they’ve persisted.
Thousands of inmates, including murderers, rapists, and death row inmates, received up to $1 billion in unemployment benefits. An estimated $146 billion was lost to fraud from Medi-Cal. At least $32 billion was lost in fraudulent payments from the Employment Development Department (EDD) under Gov. Gavin Newsom’s leadership.
It has become so bad that Newsom recently hired a New York PR firm to rehabilitate California’s brand, using $19 million in taxpayer money. He’d rather deflect attention than confront the failures of his policies.
Real oversight requires independent, continuous scrutiny. Without it, the result is predictable: wasted taxpayer dollars and broken public trust.
During the pandemic, Newsom instituted a “pay now, verify later” policy for benefits, virtually guaranteeing abuse. The rapid expansion of benefit programs without corresponding oversight did exactly what many predicted: it invited exploitation. His own administration admitted that California’s response “lacked traditional safeguards” to stop fraud.
Whether it’s unemployment funding designed for those fallen on hard times, or Medi-Cal funds designed for seniors, pregnant women, and those with disabilities, those in need foot the bill for Newsom’s failures.
But fraud is only part of the problem. It doesn’t account for the billions in legal waste of state funds.
California has spent $37 billion since 2019 to curb homelessness. The result? Homelessness increased while funds disappeared.
And there’s no better example of government waste than Newsom’s high-speed rail. It was promised to be completed by 2020 for $33 billion. Today, the project is decades behind schedule, the price has ballooned to $128 billion, and we have yet to see any usable tracks.
A moon base would cost less than the high-speed rail boondoggle.
Additionally, California is the only state in the nation with an outstanding unemployment insurance (UI) loan from the federal government. What was meant to be a lifeline for unemployed workers during the pandemic is now drowning in debt exceeding $21 billion –– driven mostly by billions in fraud.
Sacramento has failed to address this massive debt, despite at one point having a recent $100 billion surplus (now gone). Instead, the state is forcing automatic payroll tax hikes on California businesses to repay its debt.
When California fails to meet the basic responsibilities of a state government, Washington must become a backstop. Congress and the White House have acted urgently, imposing investigations and stricter oversight.
With Vice President JD Vance’s anti-fraud task force, we’ve already seen results: eight arrests in a $50 million health care fraud scheme, and 447 hospice facilities and 23 home health agencies suspended for suspected fraud costing roughly $600 million.
Concrete reforms are needed to prevent abuses from recurring. The Stop Unemployment Fraud Act, which I cosponsored in Congress, strengthens identity verification and shifts the system away from paying benefits before eligibility is confirmed. By closing loopholes that allowed billions in fraudulent claims, it focuses on preventing fraud before it happens, ensuring benefits reach those who truly need them.
I’m also drafting legislation to rein in mismanagement of state unemployment insurance programs to stop fraud. I’m determined to prevent California from endlessly pillaging the federal government and shifting the financial burden of their negligence onto employers and workers.
For years, I have watched Newsom and Sacramento Democrats undermine every lever of accountability. Enough is enough. It’s past time to prioritize taxpayers and the most vulnerable among us.
Restoring California’s legacy requires more than a PR campaign. It requires confronting failures head-on, enforcing accountability, and protecting public resources. Anything less is unacceptable.
California can once again lead the nation in innovation, growth, and opportunity. But to do so, we cannot, and will not, continue to lead in fraud.
Vince Fong is a Republican representing California’s 20th District in Congress.
