Biden Taps CA Labor Official For Role Amidst State’s Multi-Billion Dollar Unemployment Fraud Scandal
A pedestrian walks past a boarded up Lori's Diner in San Francisco, California, U.S., on Tuesday, March 24, 2020. Governors from coast to coast Friday told Americans not to leave home except for dire circumstances and ordered nonessential business to shut their doors.
David Paul Morris/Bloomberg via Getty Images

President Joe Biden has picked Julie Su, 51, head of California’s labor and workforce development agency, to serve as deputy labor secretary only weeks after it was revealed that California has lost billions of dollars in pandemic relief to fraud.

According to the Los Angeles Times, the Employment Development Department, one of seven agencies Su oversees indirectly as labor secretary, paid out $11.4 billion in claims involving fraud, out of a total of $114 billion in claims paid out since March 2020. An additional 17% of the benefit payments belonged to accounts that were frozen for an investigation, reported the San Francisco Chronicle at the time.

“There is no sugarcoating the reality,” Su told reporters in a January phone call, reported the Los Angeles Times. “California has not had sufficient security measures in place to prevent this level of fraud, and criminals took advantage of the situation.”

Su also reportedly blamed the Trump administration, which she said did not provide enough guidance on how to distribute funds to contract and gig workers, who would not have qualified for unemployment assistance were it not for changes at the federal level.

“It should be no surprise that EDD was overwhelmed, just like the rest of the nation’s unemployment agencies,” remarked Su. “And we now know that as millions of Californians applied for help, international and national criminal rings were at work behind the scenes working relentlessly to steal unemployment benefits using sophisticated methods of identity theft.”

Su would serve under former Boston Mayor Marty Walsh, the Biden administration’s pick to lead the department of labor. The White House said in a statement Wednesday:

Secretary Su oversees the state departments and boards that enforce labor laws, including minimum wage and occupational safety standards, provide state disability and unemployment insurance benefits, fund workforce training and apprenticeship programs, combat wage theft, protect injured workers, and arbitrate public sector contract disputes.

Su is a nationally recognized expert on workers’ rights and civil rights who has dedicated her distinguished legal career to advancing justice on behalf of poor and disenfranchised communities, and is a past recipient of a MacArthur Foundation “Genius” grant.

More than a week before Su was officially nominated, the California Business and Industrial Alliance took out a full-page ad in The Wall Street Journal criticizing Su for her tenure as California labor secretary.

“The fraud in California’s UI system has gotten out of control under Julie Su’s watch. That’s on top of misguided labor laws she has failed to fix, like PAGA,” the alliance said earlier this month in a statement, referencing a California statute that allows employees to sue employers on behalf of themselves and other employees for civil penalties. “If Su plans to export California’s broken bureaucracy to other places in the country, the outcome could be disastrous for employers and workers alike.”

Related: Report: Woman Arrested After Filing For Unemployment As Dianne Feinstein, Receiving $21,000

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