City Journal published a story today titled "Gavin Newsom’s Empire of Fraud." What Christopher Rufo and his three co-authors have done is simply walk through the state's recent history of fraud in a way that ties all of it together into one big failure. The story starts with pandemic-era EDD fraud. Regular readers of Hot Air might remember this video clip featuring a pair of California rappers who, in 2020, were making hundreds of thousands of dollars filing false claims.
He was eventually caught but his fraud was just the tip of the iceberg:
Around September 2020, Fontrell Antonio Baines, a rapper from Memphis known as Nuke Bizzle, released a music video on YouTube entitled “EDD.” In the song, Baines bragged about ripping off California’s UI program. “Go to the bank with a stack of these,” Baines rapped, holding up EDD envelopes. Another rapper can be heard saying: “You gotta sell cocaine, I just file a claim.” All told, Baines obtained more than $700,000 in stolen funds using preloaded EDD debit cards. He pleaded guilty to federal charges...
A member of the SFV Peckerwoods, a California-based neo-Nazi gang, allegedly ran an unemployment scam during the pandemic. So did Michael Thompson, a one-time leader of the Aryan Brotherhood, who was eventually convicted. California’s prison population apparently got in on the action, too: the EDD allegedly paid out hundreds of millions of dollars in fraudulent claims in prisoners’ names, including those of at least 133 inmates on death row.
The total amount of fraud connected to this one program is north of $20 billion. Fraud specialist Haywood Talcove told City Journal, "In California, at one point, you had more people applying for unemployment insurance benefits than you had people over the age of 18."
California's Medi-Cal program has been another source of fraud.
Experts have long warned of Medi-Cal’s vulnerabilities to fraud. The state auditor first designated “Medi-Cal Eligibility” as a “high-risk” issue in 2007 and has applied that label to it ever since. But the state government has made little progress in addressing what the auditor calls “eligibility discrepancies” that present a “substantial risk of serious financial detriment to the State.” California’s attorney general has conceded that “Medi-Cal fraud could reach billions of dollars annually.”...
Talcove estimates that the Medicaid fraud rate in California is 20 percent, which he calls a “very conservative” figure. Federal officials, however, believe that the current Medi-Cal fraud rate is even higher—and, given the state’s oversight failures and massive Medi-Cal expansion under Newsom, they are almost certainly right. Multiple high-ranking sources at the U.S. Department of Health and Human Services, which is currently probing fraud in California, told City Journal on the condition of anonymity that their initial estimate for Medi-Cal’s fraud rate since 2019 is 25 percent.
The rest of the story touches on fraud in California's welfare programs including CalFresh (food stamps) and the state's billions in homelessness spending. Incredibly, there is an effort in the state to raise the threshold for welfare fraud.
In April 2025, State Senator Lola Smallwood-Cuevas sponsored a bill that would raise the threshold for felony welfare fraud from $950 to $25,000. The measure would also make it more difficult to charge perjury based on misstatements to county welfare departments. Republican State Assemblyman Carl DeMaio has said that if the bill becomes law, it will effectively “legalize welfare fraud” in California.
Even Newsom's own office hasn't been immune:
Between 2022 and December 2024, Newsom’s chief of staff was Dana Williamson. In November 2025, she was charged with fraud for allegedly “siphoning campaign and COVID-19 recovery funds into her and an associate’s pockets.” Two other “well-connected aides in state politics were also charged” and struck plea deals that reportedly confirmed the scheme’s existence.
The article concludes that the, "pattern that emerges in California is not one of isolated breakdowns in oversight but of a vast system that almost seems to invite fraud."
All of this seems like an effort to tag Newsom with the fraud label before his run for president begins in earnest. But why not? California is broke because of the amount of spending Newsom has been doing. If a significant fraction of that money is being drained by fraudsters, and that's what the record shows in many cases, he should own it.
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