Fraud… that is the dirty word for Democrats right now.
The blockbuster Minnesota fraud scandal has dominated national headlines, but that is not the only state facing such problems.
A recent internal audit in California identified what could total millions of dollars in suspected fraud, a fact that has Democrats turning on Gov. Gavin Newsom and some big-money residents pushing back on the proposed wealth tax meant to generate additional revenue for the government.
Earlier this week, the California state treasurer reported the findings of its audit, and it did not bode well for the current leadership.
For instance, the report found that the Employment Development Department (EDD) spent a whopping $4.6 million purchasing cell phones during the pandemic. Democratic Assemblymember John Harabedian responded, "Whether it's a cent, whether it's a dollar, whether it's $4.6 million, it's inexcusable to waste any of that money.”
He continued, "I'll say to taxpayers and constituents, demand more and demand better outcomes. And that is a very reasonable reaction for them to have and we need to do better, period."
This is only one area of concern identified, but it just goes to show how easily the government wastes money. In this case, the EDD allowed remote work, but instead of seeing who truly needed cell phones, the EDD just purchased them. In this case, only 800 of the phones were used, and all the while, the EDD was paying monthly fees on thousands of the phones.
Newsom’s office has been pushing back against reporting on the fraud, especially after conservative commentator Scott Jennings blasted the administration on CNN.
Khanna, however, appears to think there is some real teeth to the problems, stating, “It was the governor’s own inspector general who said that there are billions of dollars of fraud and waste. And I heard about it from people in my district. They were saying, Ro, you’re calling for higher taxes, we’re maybe happy to pay those higher taxes, but we want to know — higher taxes on the very wealthy, I should clarify — but we want to know that that tax dollar is not going to get wasted.”
He continued, “And there was fraud and waste with COVID. There’s been fraud and waste on some of the eligibilities of these programs. There’s been fraud and waste on some of these infrastructure programs.”
Khanna is right on all fronts. Fraud and waste problems exist in every state, as well as inside the federal government. This is something I have emphasized more times than I can count, and it always comes down to the same thing, namely, that nobody is ever put in charge of monitoring the spending. Checks are written, and then officials wash their hands of it.
As Khanna mentioned, California wants to propose a one-time wealth tax on billionaires in the state to raise more funds, but with all these reports of fraud making headlines, the wealthy are pushing back.
Elon Musk’s attorney, Alex Spiro, is among the group of individuals who appear ready to pick up and leave the state rather than turn over 5% of their money to a government that has no clue how to manage the funds it already has.
Spiro, on behalf of his clients, stated, “Our clients have made clear they will permanently relocate if subjected to this tax.” He continued, “Our clients prefer to remain in California and continue contributing to the state’s economy and civic life. But they will not remain if subjected to an unconstitutional confiscation of their wealth. We hope this can be resolved through political channels rather than through years of contentious litigation.”
I have often stated that I think every city, state, and federal government agency should have a transparency website, where taxpayers can see where their money is going in real time. And I believe that any recipient of a government grant should have to give a line-by-line accounting of how that money is being spent. We all do this as business owners, so why can’t the government follow the same model?
