President Joe Biden announced on Tuesday that he will nominate Julie Su, who oversaw billions in pandemic relief fraud during her time as a senior official in California, to replace Labor Secretary Marty Walsh.
Su, who has served as deputy secretary of labor under Walsh since July 2021, previously worked as secretary of the California Labor and Workforce Development Agency. “It is my honor to nominate Julie Su to be our country’s next Secretary of Labor,” Biden said in a statement. “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.”
Walsh departs the Labor Department to lead the National Hockey League Players’ Association, the labor union which represents athletes in the NHL. His tenure was marked by rail unions threatening to enact a nationwide strike ahead of the midterm elections, which led to the Biden administration negotiating an agreement granting workers 24% pay raises and more robust health benefits.
Su would be the first Asian American member of the Biden administration’s Cabinet if she is confirmed by the Senate. She previously received criticism for indirectly overseeing the California Employment Development Department as one-tenth of the $114 billion in pandemic relief claims handled by the agency involved fraudulent activity. An additional 17% of the benefit payments were made to accounts that were frozen for an investigation; the total amount of fraud could have therefore surpassed $31 billion, according to a January 2021 report from the San Francisco Chronicle.
“There is no sugarcoating the reality,” Su told reporters in the wake of the revelations, according to a report from 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 nevertheless blamed the Trump administration for purportedly neglecting to offer adequate guidance on distributing the resources and countering fraudulent claims. “It should be no surprise that EDD was overwhelmed, just like the rest of the nation’s unemployment agencies,” she continued. “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.”
Fraudsters may indeed have stolen as much as $60 billion from the various federal unemployment programs enacted by lockdown-era stimulus bills, according to a report from the Government Accountability Office. Other estimates predict that $400 billion, or half of the unemployment funds approved by the federal government, were ultimately lost to fraud.
The appointment of Su would occur as some lawmakers attempt to garner answers on the use of stimulus funds. House Republicans on the Ways and Means Committee issued multiple requests for hearings about the fraud over the past two years; Democrats have consistently blocked the requests to examine the extent of fraudulent activity, the lawmakers say.
“American families, whose wages have eroded under President Biden’s inflation crisis, have watched as hundreds of billions of their hard-earned tax dollars were lost to criminal activity and fraud because Democrats refused to acknowledge the problem and repeatedly rejected Republican efforts to put basic safeguards in place to protect against this activity,” House Ways and Means Committee Chairman Jason Smith (R-MO) said in a statement provided to The Daily Wire last month. “Congressional Democrats walked away from their oversight responsibilities of getting to the bottom of how this happened, what they could do to prevent it, and even how much has fully been lost, leaving criminals to profit off the backs of taxpayers.”