Sen. Joe Manchin (D-WV) reportedly has severe reservations over the nomination of 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 led the California Labor Department, which oversees the state’s Employment Development Department, as one-tenth of the $114 billion in pandemic relief claims handled by the agency involved fraudulent activity. The total amount of fraud could have surpassed $31 billion, according to a January 2021 report from the San Francisco Chronicle.
Manchin recently informed the White House that he is hesitant to confirm Su, according to a report from Axios which cited multiple unnamed sources, even as the lack of support from Manchin in the narrowly Democratic Senate could sink the nomination. Hesitant Democrats also provoked the withdrawal of Gigi Sohn to serve on the Federal Communications Commission and Phil Washington to work as head of the Federal Aviation Administration.
Opposition from Manchin similarly nixed the prospects of Neera Tanden to work as director of the Office of Management and Budget; she now serves as White House Staff Secretary.
Manchin faces re-election next year in his heavily Republican home state. Sen. Kyrsten Sinema (I-AZ) and Sen. Jon Tester (D-MT) could also oppose Su to create distance from President Joe Biden as they likewise launch potentially difficult re-election campaigns.
White House Press Secretary Karine Jean-Pierre defended Su last month as reporters cited the massive unemployment insurance fraud over which she presided. Jean-Pierre noted that Su was forced to handle one in five unemployment relief claims in the nation.
“It was a historic crush of unemployment claims at the onset of the pandemic. That’s what we were seeing,” Jean-Pierre told reporters. “The design of the initial pandemic unemployment systems and years of national investments in UI modernization led to challenges, including fraud attacks, as you were just stating, across the nation in red and blue states alike. That was happening across the country during the very early stages of the pandemic.”
Su answered journalists at the time by asserting that “there is no sugarcoating the reality” of the rampant fraud which occurred in California, 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,” she added.
She also blamed the Trump administration, saying officials neglected to offer guidance on distributing the funds. “It should be no surprise that EDD was overwhelmed, just like the rest of the nation’s unemployment agencies,” Su added. “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.”
House Republicans, who secured a narrow majority in the midterm elections, are examining the widespread fraud which accompanied the pandemic relief initiatives meant to stimulate the economy during the lockdown-induced recession. Criminals may have stolen as much as $60 billion from the various federal unemployment programs enacted by the stimulus bills, according to a report from the Government Accountability Office. Other estimates say that $400 billion, half of the total unemployment funds approved by the federal government, was lost to fraud.