Biden Picks CA Labor Sec Julie Su, Responsible For $10B in Fraud Losses, for Deputy DOL

Yet another California Democrat with a record of failure might be headed to Washington if Joe Biden gets his way. Biden has already announced the nomination of Attorney General Xavier Becerra, who spent more time suing Trump than doing his actual job, for Secretary of the Department of Health and Human Services. California Gov. Gavin Newsom appointed (now former) Secretary of State Alex Padilla, who completely ignored court orders to clean up the voter rolls and botched the implementation of both the motor voter law and the Real ID rollout, to fill Kamala Harris’ Senate seat. Today Biden announced the nomination of California Secretary of Labor Julie Su for Deputy Secretary of Labor, the number two position in the department, a move that has Californians in both parties scratching their heads.

Su served as a Labor Commissioner from 2011 through 2018 and in 2019 was appointed Secretary for the California Labor and Workforce Development Agency (LWDA) by Newsom. Her tenure leading LWDA, which “enforces workplace laws, combats wage theft, ensures health and safety on the job, connects Californians to quality jobs and career pathways, and administers unemployment insurance, workers compensation and paid family leave,” has been an unmitigated disaster.

Even before the pandemic hit, in March 2019, the Employment Development Department (EDD), part of the LWDA, came under fire from the State Auditor for including full Social Security numbers in mail correspondence to beneficiaries, stating in a report that 13 million pieces of mail were mailed to the wrong address, leading to a massive identity theft exposure. Though the Auditor asked EDD to change its practices and remove full Social Security numbers from correspondence the agency ignored that request, and in a 2020 report the Auditor found that 38 million additional pieces of mail containing full Social Security numbers were sent to the wrong address.

In 2020 things got worse. A group of elected District Attorneys stumbled upon an operation run by inmates in state prisons and local jails to fraudulently receive Pandemic Unemployment Assistance benefits that cost the state $4 billion. In total the state has paid at least $11 billion in fraudulent PUA claims, with most of the money going to prison/jail inmates and foreign organized crime syndicates. Auditors blame EDD’s poor identity verification practices and the agency’s failure to cross-reference prison/jail inmate lists with PUA and unemployment applicants.

Then the agency abruptly cut off benefits to 1.4 million Californians who’d been receiving them for months at midnight on New Year’s Eve, telling them their account had been flagged for fraud and benefits were suspended immediately until the beneficiary verified their identity through a new vendor, ID.me, but didn’t send them instructions or a link to do so for more than a week. Yet, when the agency was warned about fraud by prisoners back in September 2020, it told District Attorneys investigating the crime that they couldn’t just immediately stop paying benefits, continuing to pay fraudulent benefits until the DA’s filed criminal charges.

In addition, the agency has a massive backlog of unemployment and PUA claims. According to the New York Times, as of last week there were still 700,000 backlogged claims, some of which are held up due to a website glitch that prevents some beneficiaries from completing their bi-weekly certification online.

So why would Biden and Harris want to nominate Su for this important position, knowing that all of these issues will come up during confirmation?

It’s easy. She’s the darling of organized labor, and would be serving under Boston Mayor Marty Walsh, a former union boss. (Is anyone ever a “former” union boss, though?) Witness the celebratory tweet from one of California’s foremost union bosses, Caitlin Vega.

One area in which Su has been a bulldog is in addressing “wage theft” and worker misclassification. She’s been a “warrior” for organized labor, according to one California union boss:

“I think she’s very, very viable,” said Los Angeles County Federation of Labor President Ron Herrera, who said he’s personally hoping Su gets the nod. “She has really been a warrior for us” in confronting scourges like companies’ misclassification of employees as contractors, said Herrera, an International Brotherhood of Teamsters vice president.

It’s well-known that Biden and Harris plan to pressure Congress to pass the PRO Act, which would take California’s AB5 national and outlaw most types of independent contractor arrangements and would be a huge boon for flailing labor unions. Su has aggressively pursued audits of California employers suspected of misclassifying independent contractors, so it’s extremely clear why Biden and Harris want her managing the day-to-day operations of the Department of Labor. Her nomination should be opposed vigorously by anyone who values a vital business environment in this country.