The Patriot Post® · Fraud? Newsom Tells Walz to Hold His Beer
There are so many news stories about fraud these days that our article count is growing. In 2025, we covered fraud at Medicaid, Veterans Affairs, ObamaCare, and, of course, the Somali fiasco that is Minnesota, which even drove Tim Walz out of his reelection bid.
Well, it’s as if California Governor Gavin Newsom looked at his fellow Democrats in Minnesota and said, “Hold my beer.”
The total fraud (that we know about) in Minnesota’s social services over the last few years is somewhere in the vicinity of $9 billion. Minnesota’s population is less than six million, so obviously, California, with 40 million people, will have more of most things.
Sure enough, “California, under Governor Gavin Newscum, is more corrupt than Minnesota, if that’s possible,” President Donald Trump recently wrote on Truth Social. “The fraud Investigation of California has begun.”
Indeed, it has. According to a report by California’s independent state auditor, the Golden State is losing track of an awful lot of gold. Will Swaim, president of the California Policy Center, sums it up: “California’s independent auditor says Newsom has still failed to fix vulnerabilities in the state’s unemployment insurance system six years after international crime gangs stole some $33 billion, including $20 billion in federal funds.” The auditor judged California’s Employment Development Division (EDD) “to be a high‑risk agency.”
Much of that money was a federal COVID loan that Newsom has simply refused to repay. Yet as is often the case, politicians don’t pay; businesses and taxpayers do. According to Swaim:
California businesses will pick up the tab. They’ll do that through the Federal Unemployment Tax Act, which requires the IRS to collect federal payroll withholding tax of 0.6 percent on the first $7,000 of each employee’s income, or $42. But when it encounters a deadbeat governor, FUTA requires the IRS to raise that rate by 0.3 percentage points for each year that the federal loan remains unpaid.
Today, thanks to Newsom, some 4 million California employers now pay three times the standard rate, $126 per employee. The next payment is due January 31. That ought to be politically popular.
Making it more expensive to employ people means fewer jobs, especially the entry-level positions young people depend on to build skills for the workforce. All so Newsom can mask California’s budget problems and essentially get taxpayers in red states to finance his $9.5 billion golden giveaway for Medi-Cal for illegal aliens.
Where did the money actually go? China.
Swaim writes, “Most of California’s missing money, about $26 billion, was captured by international crime gangs operating on behalf of foreign adversaries — most notably a Chinese state-sponsored cyber crimes outfit called Advanced Persistent Threat 41 or ‘Wicked Panda’ — and is being deployed against Americans and American interests.”
So not only was Newsom’s California utterly careless with federal and state tax dollars, but the ChiComs and other anti-American actors got a payday to advance their anti-American interests.
Fortunately, the Trump administration is on the case. “We are creating a new assistant attorney general position who will have nationwide jurisdiction over the issue of fraud,” Vice President JD Vance announced. “That person’s efforts will start and focus primarily in Minnesota, but it is going to be a nationwide effort, because, unfortunately, the American people have been defrauded in a very nationwide way.”
He added, “We know that the fraud isn’t just happening in Minneapolis. It’s also happening in states like Ohio. It’s happening in states like California.”
As long as Americans countenance a lavish welfare state based on forced income redistribution from some people to others, fraud will be intractable. If you want to mop up the floor, you’ve first got to turn off the spigot.