Deputy Labor Secy nominee takes heat for unemployment fraud
UPDATED 12:40 PM PT – Wednesday, March 17, 2021
Joe Biden’s Deputy Secretary of Labor nominee was grilled on her mishandling of a massive unemployment insurance scheme while serving as California’s labor secretary. During Julie Su’s confirmation hearing on Tuesday, Sen. Richard Burr (R-N.C.) laid into her over a scandal in which California was defrauded out of billions of dollars in unemployment claims.
“California’s suffered some of the largest fraud in our nation’s history during the pandemic,” Burr stated. “Over $11 billion and perhaps as high as $30 billion in fraud occurred in California’s unemployment system. Even death row inmates received unemployment checks. I’m sure there’s a reasonable debate to be had about the death penalty, but I can’t imagine one that involves paying people on death row.”
Burr added Su failed to successfully implement measures to stop over $11 billion worth of insurance fraud. In 2020, Su even admitted as much, saying proper security was not put in place.
“There is no sugar-coating the reality: California did not have sufficient security measures in place to prevent this level of fraud,” Su said. “Of the $114 billion in unemployment paid by California since March, approximately 10% has been confirmed as fraudulent.”
Burr also pointed to Su’s guidance as California’s labor secretary, in which she nixed multiple safeguards meant to protect the state from fraud in order to expedite claims. He noted that decision led to even more fraud amid the already ballooning crisis in the state. Sen. Susan Collins (R-Maine) chimed in on that criticism as well. She pointed out an independent audit found Su’s policies exacerbated the fraud crisis.
“A California state audit found that your directives jeopardized the integrity of the system,” Collins said. “So, do you disagree with the state auditor and with the federal requirements? Why did you take those actions? Why did you jeopardize the integrity of the system?”
Meanwhile, Su is largely expected to be confirmed by the Democrat-majority Senate.