Gavin Newsom, ‘King of Fraud’
During a Fox and Friends broadcast Thursday, First Assistant U.S. Attorney for the Central District of California Bill Essayli branded California Gov. Gavin Newsom “the king of fraud.” He didn’t stop there. He declared, “There’s never been this much fraud in American history.”
By just one metric, Essayli’s claim holds true: the funds stolen via California’s Employment Development Department during COVID. The state has acknowledged $20 billion in fraud, but many have argued the real number is much higher. The CEO of Lexis Nexis’s Risk Solutions, Haywood Talcove, has pinned the amount stolen at $32.6 billion. (RELATED: Is Minnesota or California the Fraud Capital of America?)
Compare these fraud numbers to what rocked Minnesota and derailed Gov. Tim Walz’s reelection campaign. It has been alleged that as much as $9 billion was stolen via Medicaid schemes in the Land of 10,000 Lakes. That, of course, pales in comparison to the vast scale of the fraud in California under Gavin Newsom’s leadership. (RELATED: Minnesota Welfare Scandal Is the Fraud Warning Americans Finally Noticed)
This was pointed out Friday by Will Swaim, the president of the California Policy Center, in National Review. Swaim argued that Fox News’ recent assessment that the fraud in Minnesota represents the “nation’s largest COVID-era scheme” is incorrect and that California, by far, is the holder of that distinction.
Newsom and other California officials were warned about the massive fraud coursing through the Employment Development Department and the dangers posed by the department’s lax anti-fraud measures. And yet the fraud went on.
In fact, Newsom himself urged the department to act as rapidly as it could to dole out unemployment insurance checks during the early days of the COVID pandemic. In an April 17, 2020, appearance on the Ellen DeGeneres Show, Newsom said, “We’re doing everything to try to get those unemployment insurance checks out as quickly as possible.” An inquiry later found that Julie Su, then the secretary of the Labor and Workforce Development Agency, had ordered EDD to cease its typical anti-fraud procedures in a bid to speed up its work in the spring of 2020, corresponding with Newsom’s Ellen DeGeneres Show declaration. (RELATED: To Harvard and Back with Julie Su)
In November, Sacramento County District Attorney Anne Marie Schubert said, “We have asked and implored the governor to get involved himself to turn the spigot off.” Evidently, however, that request was to no avail. There continued to be, in the district attorney’s words, “no cross-matching between the incarceration data and EDD on a routine basis like is done in 35 other states.” That meant felons were receiving unemployment insurance without inhibition.
California has still not resolved the problems with its Employment Development Department, Swaim explained in National Review. A December 2025 report from the state auditor found that the department “continues to have high rates of improper [unemployment insurance] payments, including fraudulent payments” and that it “failed to meet acceptable levels in more than half of the measures on which the federal government evaluates its performance.”
As for Su, she has been let off scot-free. She became the (acting) labor secretary under President Joe Biden before softly landing this month as “deputy mayor for economic justice” for New York City Mayor Zohran Mamdani.
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Assistant U.S. Attorney Essayli cited the EDD scandal as his first piece of evidence that Newsom is the “king of fraud,” but he also pointed to fraud in healthcare, homelessness, and the state’s high-speed rail project.
In fact, Essayli’s appearance on Fox and Friends related primarily to the fraud the feds are uncovering in California’s homelessness programs through the Homelessness Fraud & Corruption Task Force. So far, only two men have been charged for alleged misuse of homelessness grant money, but Essayli said those initial charges are just the “tip of the iceberg” and that more arrests are coming.
But the real fraud here may not be stolen homelessness grants, but the fact that much of Newsom’s homelessness programs have exacerbated homelessness rather than reduced it. Essayli noted that over $24 billion has been spent on combating homelessness in California in just the past four years alone. And yet homelessness has continued to tick up year after year, with Newsom hopelessly clinging to the few statistics that found that the rate of growth was slowing. (RELATED: Hike Taxes to Help the Homeless?)
Check out my book, Newsom Unleashed: The Progressive Lust for Unbridled Power, for a full accounting of why Newsom’s homelessness policies were destructive rather than helpful.
On Thursday, however, Newsom claimed that for the first time during his seven years as governor, the homeless population had actually declined… by 9 percent. That remark came as part of his State of the State address, which he delivered in grand fashion to the California Legislature as a sort of pre-presidential-announcement resume speech. His claim has been met with much skepticism. For its part, Capitol Radio described Newsom’s 9 percent number as “a figure that’s already being questioned, given that many California communities didn’t conduct a homeless count last year.” The Sacramento Bee added, “Beware of his numbers.”
The biggest fraud, however, was Newsom’s claim, made during his State of the State address, that California is a “beacon.”
“We are a beacon,” he said. “The state is providing a different narrative — an operational model, a policy blueprint for others to follow.”
Newsom cited the many advantages and significant wealth California has as an attempt to defend his record in California, particularly the state’s institutes of higher education and big tech innovation. But those plentiful advantages and wealth serve only to make the job Newsom has done running the state look worse. California has so many advantages, and yet it faces an $18 billion deficit; visible homelessness infecting and destroying numerous cities (with 187,000 Californians homeless); the nation’s worst cost-of-living crisis; the nation’s worst poverty rate, the nation’s worst unemployment rate; housing costs that are out of control and follow only Hawaii’s; the sixth-highest violent crime rate in the nation; the highest energy prices in the nation; streets littered with trash and human feces; high rates of outmigration by residents and corporations; heavy regulations that stifle the business environment; and student test scores that remain below pre-pandemic levels. California is the richest state in the nation by total economic output, and yet Newsom has left it in an egregious state seven years after taking power.
If Newsom wants to run for president on his record in California, good luck to him. He would be better off ignoring everything he has done in office and instead coming up with a new plan to sell to the American people.
Perhaps Newsom realizes this. In an interview he gave to the Atlantic for a tell-all article on himself published this week (you can find much of the information in the article and more in my book), he “slap[ped] his hand” on the memoir of his political hero, former President Bill Clinton, and told reporter Helen Lewis a piece of wisdom from Clinton: “Given the choice, the American people always support strong and wrong versus weak and right.”
Clinton’s wisdom applies well to campaigning when one has a record of achievement that falls into the category of “wrong.” Matt Bennett, a Democratic strategist, noted to the New York Times this week that Clinton drew very little on his record as governor of Arkansas when he defeated George H. W. Bush in the 1992 presidential election, and that he instead focused on his vision for the Democratic Party.
Newsom’s strategy in his State of the State address of fraudulently claiming he achieved greatness in California may just be his interim plan while he remains in office. Once he leaves the governor’s office, he may rush past California’s disasters and hope voters never look too closely at the record he leaves behind.
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