Republicans Grill California Labor Secretary on EDD Fraud in Confirmation Hearing

U.S. Senate Republicans grilled California Labor Secretary Julie Su during a confirmation hearing today, criticizing her handling of the state's Employment Development Department.

If confirmed, Su would serve as deputy U.S. labor secretary.

Su was appointed as secretary of the California Labor and Workforce Development Agency in 2019 by Gov. Gavin Newsom. Her agency oversees EDD, which has made billions of dollars in fraudulent unemployment payments during the pandemic. Sen. Richard Burr, R-North Carolina, said the country shouldn’t emulate California.

“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," he said.

California Republicans have hammered on EDD's failures here at home, and now that line of attack has been picked up by Senate Republicans and may derail Su's confirmation.

Burr's criticism of Su was echoed by other Republicans on the committee.

Above, Sen. Richard Burr, R-North Carolina, questions Su's handling of California's EDD.

Sen. Susan Collins, R-Maine, also pressed Su on the amount of unemployment fraud in the state, and on Su's directive to EDD leaders to temporarily suspend unemployment eligibility certifications.

"So, in other words, they're paying (unemployment insurance) benefits before determining if the applicants are eligible," Collins said.

But Su defended her actions and that of the state. While she acknowledged the fraud at EDD, she said most of it occurred under the Pandemic Unemployment Assistance program, a part of the federal CARES Act. Su said that program, in particular, was more vulnerable to fraud.

"It was a balance there of wanting to get money out quickly, because we needed to. And then once we saw the fraud, we took immediate steps," she said.

And Su maintains the amount of fraud in California was proportional to what other states experienced.

"The $11 billion or so, which is 10% of the total payments, is about what the Department of Labor estimates is the fraud, nationwide, on the system," Su said. "I'm not trying to defend it or justify it, I'm putting it in context."

Democrats in the hearing praised Su’s background as the daughter of working-class immigrants and her career as a civil rights attorney. Sen. Alex Padilla, D-California, said Su's experience dealing with fraud at the state level will help in combatting it on a national scale.

"I know that Julie will take every opportunity to do right by both our nation's workers and employers to think boldly and to expand opportunities to achieve the American dream, just as her parents did," Padilla said.

The Senate Health, Education, Labor and Pensions Committee has not yet set a date to vote on whether to move Su's nomination forward.