Former ‘Acting’ Labor Secretary Julie Su’s California’s Pandemic Fraud Must be Addressed
California has 99% of the total Unemployment debt by states to the federal government
By Katy Grimes, January 8, 2026 7:24 am
Julie Su was just appointed as the Deputy Mayor of New York City for Economic Justice by New York City Mayor Zohran Mamdani. Her new title is appropriate given her nefarious history as California Labor Secretary, presiding over mass unemployment welfare fraud. “Economic Justice” is the left’s euphemism for wealth redistribution.
“Welcome to A New Era, Julie Su!” Mamdani posted on X. “As former U.S. Secretary of Labor, Julie played a central role in fighting for workers, ensuring a just day’s pay for a hard day’s work and saving the pensions of more than a million union workers and retirees. A lover of Queens, she’s joining us as NYC’s first ever Deputy Mayor for Economic Justice.”
In 2020 during Governor Gavin Newsom’s statewide Covid lockdown, he announced the formation of a “strike team” to solve numerous issues plaguing California’s unemployment agency, the Orwellian-named “Employment Development Department: long wait times for unemployment claims, delayed payments, phone delays, and the EDD’s struggles in dealing with a record number of unemployment insurance claimants.
But it only got worse.
In 2021, the California Globe reported for months on end about the horrific fraud in California’s unemployment agency: the backlog of millions of unfulfilled unemployment claims, and fraudulent unemployment claims following Governor Gavin Newsom’s pandemic lockdown was first ordered in March 2020.
While in charge of the EDD, California’s Secretary of Labor, Julie Su, appointed by Gov. Gavin Newsom, was informed very early on in the pandemic that the unemployment department was being looted by fraudsters but did nothing to stop it until months later – after $55 billion disappeared.
Under Su’s leadership, more than $55 billion was sent to prison inmates in California’s county jails, and state and federal prisons, out of state, and even out of the country, while legitimate claimants were stiffed for months, or received late payments.
Death row inmates, life and life without possibility of parole inmates, rapists, child molesters, human traffickers, and other violent criminals, received unemployment benefits, and many of the claim checks were sent out of state.
This alerted District Attorneys from across California who joined together to expose the massive unemployment benefits fraud in jails and prisons in California. “This is perhaps the biggest fraud on taxpayers in California history,” Sacramento DA Anne Marie Schubert said. Schubert named more than seven death row inmates who were receiving fraudulent EDD benefits checks including serial killers Cary Stainer and Wayne Adam Ford, Isauro Aguirre convicted in for the murder of 8-year-old Gabriel Fernandez, “Speed Freak” killer Wesley Shermantine, and even Scott Peterson.
The money was federal funding – Coronavirus Aid, Relief, and Economic Security (CARES) Act Funding – it was sent to the state and flowed through the EDD.
For her incompetence, California Labor Secretary Julie Su was not fired for negligence, nor was she brought up on charges or made an example of – she instead “failed up,” with nomination to a prominent position in President Joe Biden’s administration as Deputy Secretary of Labor. The State of California often promotes terrible state employees, up and out to other agencies. This “promotion” took Su out of the state entirely, and out of harms way.
Yet the Globe continued reporting on Julie Su’s wake of destruction because $55 billion disappeared, and she was then promoted to US Secretary of Labor – although she was never able to get through the confirmation process, and served the entire time as “Acting” Secretary of Labor.
But even as “Acting” Secretary of Labor, Su forgave $32.6 billion of California’s debt. She attempted to erase her own corruption.
Su was responsible for the state’s unemployment fraud, and when she was Acting US Secretary of Labor, she forgave California’s debt to the federal government.
In addition to the $55 billion, the EDD owes the federal government more than $20 billion it borrowed during the pandemic just to cover regular state benefits. 19 states repaid loans, but California spent the stimulus funds on welfare checks, and has not paid it back. Adding insult to injury, Gov. Newsom has saddled California businesses with huge payroll tax increases to repay the debt.
Despite this shady work history, Mayor “Mamdani not only waved off concerns about Su’s record, but argued it’d be a plus for the new ‘economic justice’ post,” the New York Post reported. “I’m aware of the deputy mayor’s record, and I’m very excited to have her,” Mamdani said when asked about Su’s history. “I can say that in looking at our deputy mayor’s record and looking at how she stood up for workers across the country, it is a moment of incredible excitement for me and the entire team to have her.”
Back in 2021, the California State Auditor completed an audit of the EDD. The audit reported:
“This audit reviewed EDD’s response to the claim surge, its handling of the resulting backlog of unpaid claims, and the assistance it has provided to individuals through its call center.”
The Auditor said the EDD was aware of internal problems for more than 10 years, while failing to prepare for inevitable economic downturns in the state, throughout the Gov. Jerry Brown administration and into Gov. Gavin Newsom’s. “EDD had no comprehensive plan for how it would respond if California experienced a recession and UI claims increased correspondingly,” the audit reported.
So, Julie Su knew about the inherent problems at the EDD but did nothing to fix the problems, or at the least, make improvements.
But what led to the $55 billion in fraudulent claims was when Secretary Julie Su made the decision to suspend most EDD eligibility requirements, according to the audit. It was only federal oversight which caught this and notified the EDD that they could not suspend eligibility requirements.
The Audit found:
“In March 2020, the secretary of the Labor and Workforce Development Agency (agency secretary) directed EDD to pay claimants UI benefits before determining whether they met key program eligibility requirements, and EDD expanded this directive to include most program eligibility determinations. In April 2020, the agency secretary further directed EDD to temporarily stop collecting the certifications claimants must regularly submit that assert they remain eligible for benefits.”
Now would be a good time for President Trump’s new Department of Justice to look into California’s $55 billion in fraudulent unemployment payments made during the Covid lockdowns, as well as “Acting” Secretary of Labor Julie Su’s decision to forgive California’s debt covering the fraud.
Throughout the country, approximately $215 billion of the $900 billion unemployment benefits paid was lost to fraud and other “overpayments.” It appears that California was responsible for about 30% of that $215 billion. While the other states paid their UE debt back to the federal government, Gov. Gavin Newsom did not.
Now we see in a U.S. Treasury report of unemployment debt by state, only California and the Virgin Islands still owe the Federal government – and California has 99% of the total Unemployment debt by states to the federal government.
Just imagine what Julie Su will do to New York City.
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