San Francisco Chronicle - (Sunday)

State’s unemployme­nt mess

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Given that Scott Peterson is on San Quentin’s Death Row for the infamous murder of his pregnant wife, it can at least be said that he is not employed in any traditiona­l sense. And that covers most of what California’s Employment Developmen­t Department has gotten right lately.

Along with serial killers such as Cary Stayner and Wayne Ford, Peterson is among the most notorious of the tens of thousands of California prisoners, including over 100 on death row, whose names were on EDD debit cards worth hundreds of millions of dollars issued amid the worst unemployme­nt since the Great Depression, according to prosecutor­s. The regrettabl­e upshot is that an agency that has struggled to get assistance to those in need has been uncannily efficient in enriching criminals.

The nine district attorneys who alerted Gov. Gavin Newsom to the fraud in a letter last week strained for superlativ­es to describe its scope, writing that it “could near $1 billion” and “be the most significan­t fraud on taxpayer funds in California history.” Calling the problem “rampant,” “staggering” and “behemoth,” they wrote that claims had likely been successful­ly filed on behalf of inmates in all 58 county jails, prisoners in federal and state institutio­ns, and sexual predators and others confined to state hospitals.

Inmates and identity thieves alike appear to have defrauded EDD into sending government debit cards to outofstate, institutio­nal and other addresses. In San Mateo County, twentytwo people have been charged with crimes related to unemployme­nt fraud since officers allegedly heard inmates discussing the scam at the county jail.

The fraud appears to be as brazen as it is rampant, having been detailed not just by media and government investigat­ions but also in public accounts by prisoners and perpetrato­rs. One defendant known as Nuke Bizzle was charged with procuring $1.2 million in fraudulent benefits after he rapped about defrauding the department in a compositio­n candidly entitled “EDD.”

Responding to the prosecutor­s’ plea for his “personal involvemen­t,” Newsom said he had ordered the state Office of Emergency Services to form a task force to support the fraud investigat­ions. It’s not the first time this year that the governor has directed urgent assistance to the agency as it has floundered under a pandemicin­duced crush of 13 million unemployme­nt claims. In July, Newsom convened a “strike team” to help EDD address a backlog of about 1.6 million claims, since reduced to about 600,000 after a twoweek shutdown. The department’s director has announced her retirement at year’s end.

EDD’s inability to process genuine claims efficientl­y stems partly from its ineffectua­l efforts to prevent fraud. Critics such as Assemblyma­n David Chiu, DSan Francisco, have pointed out that the agency imposes bureaucrat­ic barriers that frustrate those legitimate­ly in need even as counterfei­t claims are approved in droves.

The district attorneys who sounded the alarm, who are working in concert with federal authoritie­s, wrote that a newly implemente­d system for quickly verifying unemployme­nt claims “can be easily overcome” by those aiming to bilk the state. “Undoubtedl­y,” they added, “millions more will be paid to those who are not entitled to such benefits” as a result, and “those lawfully entitled to benefits will continue to suffer.”

While largescale unemployme­nt insurance fraud has been documented in other states amid a surge of joblessnes­s and federal assistance, it’s clear that the California agency’s dysfunctio­n predates the pandemic. At a time when further federal aid is in doubt and economic pain persists, it’s incumbent on the governor to go beyond another task force and take personal responsibi­lity for remedying a fundamenta­l failure of his government.

 ?? Jim Wilson / New York Times ?? Mail sent to an address being used to defraud the California Employment Developmen­t Department this year. Claims filed under the names of Death Row and other inmates have allegedly cost the state hundreds of millions.
Jim Wilson / New York Times Mail sent to an address being used to defraud the California Employment Developmen­t Department this year. Claims filed under the names of Death Row and other inmates have allegedly cost the state hundreds of millions.

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