EDD scandal raises questions about Biden nominee
President Biden’s nomination of Julie Su as U.S. deputy secretary of labor is raising eyebrows throughout California, if not the nation.
Su’s performance as California labor secretary has been a disaster. Since Gov. Gavin Newsom chose her for the position in 2019, the state Employment Development Department she oversaw has been responsible for one of the biggest scandals in state history.
Under her watch, California not only has failed to process and distribute unemployment checks on a timely basis to hundreds of thousands of people with legitimate claims, but it also paid out $11 billion in fraudulent claims. Su may not have directly managed the department, but she supervised those who did. Her failed leadership during the crisis raises serious questions about whether she is the right choice to help shape the nation’s labor programs.
Su’s defenders include Gov. Gavin Newsom and California labor leaders. They argue that her challenges were exacerbated by understaffing, outdated technology and a pandemic that overwhelmed the system. All good points. But to earn a post at the national level, Biden should be looking for someone who solved — or at the very least alleviated — those problems.
California Auditor Elaine Howle reported last month that Su clearly made them worse when she decided to suspend most EDD eligibility requirements. Specifically, in March 2020, she directed that EDD pay unemployment benefits before determining whether recipients were entitled to them.
The audit revealed three other disturbing findings:
• The EDD repeatedly failed to comply with a state law requiring the agency to review its anti-fraud policies. The last review took place in 2015.
• The agency flagged as many as 1,000 suspicious claims per day during the first four months of the pandemic. But it only had two people assigned to review these claims. The EDD didn’t automate the system until July, after thousands of fraudulent claims had been paid.
• The EDD ignored the discovery that multiple claims were coming from the same address; 26,000 addresses were associated with more than 550,000 claims.
The scope of those failures demand further scrutiny by the state Legislature and during Su’s U.S. Senate confirmation hearings.
Prior to being installed as California’s Labor Secretary, Su earned an undergraduate degree from Stanford and a law degree from Harvard. She became a labor lawyer who specialized in seeking better working conditions for immigrants. As a staff attorney for the Asian Pacific American Legal Center, she advocated for tough anti-sweatshop laws in California, an issue that had been ignored for years.
But Su’s record begs the question of whether she is the best person available to serve in the Biden administration in the midst of a pandemic that has flummoxed her as California’s labor secretary.