Breaking News: Biden’s Nominee For Labor Secretary Was Responsible For Overseeing Unemployment Fraud Worth Billions Of Dollars While Working In Newsom’s Cabinet

Credit: Bloomberg.com

President Biden is set to nominate Deputy Secretary of Labor Julie Su to head the Labor Department, replacing Marty Walsh. This sets up a tense confirmation process after she faced Republican criticism for a massive unemployment insurance scandal that happened while she was California’s labor chief.

Marty Walsh is set to become the next executive director of the NHL Players’ Association. 

The White House called Su a “tested and experienced leader” and said she would help to build a “more inclusive economy” in an announcement on Tuesday. 

“Over several decades, Julie has led the largest state labor department in the nation, cracked down on wage theft, fought to protect trafficked workers, increased the minimum wage, created good-paying, high-quality jobs, and established and enforced workplace safety standards,” Biden said.

He continued, “Over several decades, Julie has led the largest state labor department in the nation, cracked down on wage theft, fought to protect trafficked workers, increased the minimum wage, created good-paying, high-quality jobs, and established and enforced workplace safety standards.”

Su, former secretary of labor for California, was confirmed by a thin margin, 50-47, but the U.S. Senate in July 2021 to serve in her current role.

Last week, seven congressional Republicans from California signed a letter that urged Biden to not consider Su for the position.

The members of Congress were led by Rep. Kevin Kiley (R-CA). They accused Su of overseeing “one of the largest cases of unemployment insurance fraud” during the pandemic and of implementing one of the “most destructive labor policies in decades” during her time as California’s labor secretary.

The state’s Employment Development Department handles unemployment benefits and they reportedly paid between $20 billion to $32 billion to fraudsters.

The letter on Friday said that the most “infuriating” part of the situation was that it “could easily have been prevented had the state implemented proper fraud prevention systems.”

It added, “While the state stood by twiddling its thumbs and $32 billion in fraudulent payments were being sent to individuals who did not qualify for the assistance, those who were eligible and truly needed the help did not receive payments in time for months on end.” 

Su argued during her 2021 confirmation hearings that the fraud was part of a criminal conspiracy that wasn’t just in California.

Sen. Richard Burr (R-NC) said at the hearings, “It is true that all states struggled, but California’s struggles swamp everyone. And none of their (other states’) secretaries of labor are here today seeking a promotion.”

California was targeted by domestic and foreign criminals. The criminals made false unemployment benefit claims during the COVID-19 pandemic and made off with the money. 

A state audit revealed that over $400 million of that taxpayer money went to tens of thousands of prisoners, including 100 who were on death row.

Su previously admitted in a press conference that the state had “not had sufficient security measures in place” to prevent the fraud. She blamed the Trump administration for the fraud and backlog of unemployment claims, saying that the former president’s team did not give them adequate guidance to fight against the fraud.