PD Editorial: Crime doesn’t pay, but California pays criminals

If you asked the nation’s governors to imagine the worst scandal involving taxpayer dollars that could befall their administrations, it probably wouldn’t be much more nightmarish than the one now facing Gov. Gavin Newsom.

A few days before Thanksgiving, a group of district attorneys revealed that at least 20,000 inmates in California’s prisons and jails could give thanks for the state’s chronically inept Employment Development Department.

The department approved at least $400 million in payments on pandemic-related unemployment claims filed under the names of inmates between March and August. The claims included 133 of the 700-plus inmates dwelling on death row.

In a letter to the governor, nine district attorneys asked for Newsom’s “personal involvement” in addressing “what appears to be the most significant fraud on taxpayer funds in California history.” The fraudulent claims could run as high as $1 billion.

The list of claimants includes some of the state’s most notorious prisoners, including Scott Peterson, convicted in a highly publicized trial in 2004 for murdering his pregnant wife. His attorney contends Peterson wasn’t involved in the unemployment scam and never received money. Others on the long list include Cary Stayner, who murdered four women near Yosemite in 1999.

All told, more than 35,000 claims were made in prisoners’ names. Some applications arrived with pseudonyms such as “Poopy Britches” and “John Doe.”

“Quite frankly, the inmates are mocking us,” Sacramento County District Attorney Anne Marie Schubert said.

All of this occurred as Californians with legitimate claims waited months to receive approval. At one point, the number of unprocessed claims was as high as 1.6 million. Today, the backlog is 590,000 claims.

Prosecutors say the department was slow to respond to what they uncovered and continued making payments until criminal charges were filed. That money is probably gone for good, one more loss that taxpayers must cover because the government rushed to hand out money without sufficient safeguards in place.

Prosecutors have established a statewide task force and are asking Newsom to provide additional resources to investigate and prosecute fraud. They’re also pushing for the state to begin cross-checking claims against the local, state and federal prison rolls. Thirty-five states already do that, but not California.

A thorough cleaning is needed, and safeguards must be put in place rapidly to prevent further fraud. The news is likely to get worse as the investigation continues, and Newsom must be prepared to present evidence of exactly what he’s done to stop this nightmarish waste of tax dollars.

As San Francisco Democratic Assemblyman David Chiu points out, the chaos at EDD isn’t Newsom’s creation, but that doesn’t absolve the governor of blame. “He inherited it, but it’s happening on his watch,” Chiu said. “He and his administration are responsible for cleaning up the utter mess that is EDD.”

That’s true, but it’s also a lawmaker laying the blame on the governor when there’s plenty of blame to go around. The Assembly hasn’t exactly stepped up to impose reforms on EDD and hold state workers who bungle this badly accountable. California’s problems with technology are chronic. Maybe this embarrassing and costly incident will focus both the governor and the Legislature on reforming the department.

You can send letters to the editor to letters@pressdemocrat.com.