The extent to which California’s unemployment department has failed to address rampant fraud came into clearer focus on Thursday, when the state auditor released her second report of the week on the Employment Development Department.

Despite repeated warnings from federal authorities that fraudsters would target California, EDD waited six months and processed 7.4 million claims before it began flagging addresses with unusually high numbers of claims, the audit found. In “the most egregious example,” more than 1,700 claims came from a single address. EDD also paid $10.4 billion to claimants with unverified identities and $810 million to prison inmates. State labor officials confirmed this week the total fraud could reach $31 billion.

Among State Auditor Elaine Howle’s other findings:

  • EDD ordered Bank of America to freeze 334,000 debit cards due to fraud concerns — but EDD doesn’t know which accounts were frozen or which need to be unfrozen.
  • EDD doesn’t monitor or assess its fraud prevention tools to determine whether they’re successful.
  • EDD in September implemented, a new identity-verification tool, to speed up processing times — but the department requires claimants to verify their identities again after going through, delaying processing times.
  • EDD had 77,000 unresolved identity-fraud complaints as of November.

Citing EDD’s “uninformed and disjointed techniques” for preventing fraud, Howle recommended the department set up by March a central fraud unit and develop a plan by May to assess its fraud prevention tools. EDD said it would implement the recommendations — but the department hasn’t always made good on its promises. The audit Howle released Tuesday found EDD has failed to address key operational issues it’s known about for more than a decade.

EDD said Thursday it has cleared 99.9% of the backlog of 1.6 million claims first identified in September. But a new backlog has been growing in the meantime — and it reached 974,693 claims on Thursday, the highest total in months. When added to the 1.4 million claims EDD is re-verifying due to potential fraud, that makes for a functional backlog of around 2.4 million claims.


The coronavirus bottom line: As of Thursday, California had 3,186,610 confirmed cases (+0.5% from previous day) and 38,961 deaths (+1.9% from previous day), according to a CalMatters tracker.

Also: CalMatters regularly updates this pandemic timeline tracking the state’s daily actions. And we’re tracking the state’s coronavirus hospitalizations by county.

1. Eviction moratorium extended; school reopenings flounder

Image via iStock

State lawmakers on Thursday overwhelmingly voted to extend California’s eviction moratorium through June 30 and leverage $2.6 billion in federal relief for struggling tenants and landlords, CalMatters’ Nigel Duara reports. Gov. Gavin Newsom will sign the deal into law today, just before California’s current eviction moratorium expires on Jan. 31. But another deadline is now near-impossible to meet: The Legislature hasn’t approved Newsom’s $2 billion school reopening proposal that required districts to submit health and safety plans by Feb. 1 — meaning districts don’t have a program to apply to.

In a frank conversation Thursday with the Association of California School Administrators — one that was later removed from YouTube — Newsom appeared frustrated with unions’ demands that teachers be vaccinated before students return to campus, Politico reports.

  • Newsom: “If we wait for the perfect, we might as well just pack it up and be honest with folks that we’re not going to open for in-person instruction this school year. … I can assure you, the pressure we’re getting today (to reopen schools) is going to pale in comparison to where we’ll be in a few weeks if these (coronavirus) numbers continue and other districts across the country start moving in the direction that the (Biden) administration wants them to move in.”

2. Weber confirmed as secretary of state

Dr. Shirley Weber answer questions before members of the Assembly during the confirmation hearing on her appointment to Secretary of State on Jan. 26, 2021. Photo by Anne Wernikoff, CalMatters
Shirley Weber during the confirmation hearing on her secretary of state appointment on Jan. 26, 2021. Photo by Anne Wernikoff, CalMatters

The state Legislature on Thursday confirmed Assemblymember Shirley Weber as California’s secretary of state, with Newsom expected to swear the San Diego Democrat into office today. Weber, a highly respected lawmaker, secured some Republican votes in the Assembly, though all Republican senators abstained. She will be the first Black secretary of state when she assumes the position vacated by Alex Padilla, who Newsom tapped to replace Vice President Kamala Harris in the U.S. Senate.

The political musical chairs aren’t over. Once Newsom swears Weber into office, he’ll declare a special election for her Assembly seat — one already being pursued by her daughter, Akilah Weber. Senate Pro Tem Toni Atkins, a San Diego Democrat, endorsed Akilah Weber’s candidacy earlier this week. There will likely be at least three special elections this year for a seat in the state Legislature.

3. State lifts suspensions on driver’s licenses

Guillermo Hernandez sits in his van in Richmond on Jan. 28, 2021. Hernandez, who uses his van for his businesses buying and selling second hand goods, lost work after having his license suspended in 2013 for failure to pay a ticket. Photo by Anne Wernikoff, CalMatters
Guillermo Hernandez sits in his van in Richmond on Jan. 28, 2021. Hernandez lost work after having his license suspended for failure to pay a ticket. Photo by Anne Wernikoff, CalMatters

Around 426,000 Californians had their driver’s licenses reinstated last month after an appeals court ruled that the state was illegally penalizing people who failed to appear in court on costly traffic tickets, CalMatters’ Robert Lewis reports. The lawsuit was part of an ongoing effort by legal advocacy organizations to reduce California’s traffic fines and court fees, which they contend disproportionately impact low-income residents and communities of color. The Golden State has among the highest traffic penalties in the nation due to state and county add-on fees, which can push the base $100 fine of running a red light to nearly $500 — or more than $800 if the driver misses a deadline to pay or appear in court.

Still, Hoshino said, those fees contribute $1.4 billion to state and local programs. If the fees are slashed, “You’re either going to end up abolishing those programs or you’re going to have to find alternatives.”

4. What’s your sign?

The Pisces zodiac sign. Image via iStock

A fun Friday item for you: The best-represented zodiac sign in the state Legislature is Pisces, comprising 19 lawmakers, according to data compiled by Alex Vassar of the California State Library. Among current lawmakers who hold or have held leadership positions, Pisces is also the best-represented zodiac sign. That directly contradicts this horoscope website, which says “Pisces do not gravitate to positions of authority.” However, it also characterizes Pisces as “visionary leader(s) who (are) tremendously skilled at motivating the people who work for them.”

Next in line are Aquarius and Virgo, tied with 14 lawmakers each. But Aquarius takes the cake, historically speaking — it’s been represented by 78 lawmakers since 1960, the most of any zodiac sign. Newsom is a Libra, the zodiac sign tied with Sagittarius for representing the least number of lawmakers. Libras apparently “strive to create equilibrium in all areas of life.”

CalMatters commentary

State regulators must step up: The Legislature must require polluting facilities to provide proof they can pay to clean up contamination during operations and upon closure, argues Rebecca Overmyer-Velázquez of the Clean Air Coalition of North Whittier and Avocado Heights.

Reform student financial aid: Housing is so expensive in Santa Cruz County that the possibility of homelessness is a genuine fear for me and other students, writes Ruby Portillo, a UC Santa Cruz student.

Other things worth your time

Mayor Eric Garcetti has received first dose of COVID-19 vaccine, aide says. // Los Angeles Times

As California prisons and jails battle COVID-19, some inmate deaths go uncounted. // inewsource

The pandejo movement destroyed California’s coronavirus progress. // The Atlantic

Despite Cal/OSHA’s emergency COVID-19 safety rule, workers say little has changed. // Los Angeles Times

The outdoor dining ban is over, but one restaurant that defied it is facing a host of new charges. // Long Beach Post

Controversial Gandhi statue ripped down, vandalized in Davis’ Central Park. // Sacramento Bee

After Trump, California GOP seeks to reset and rebrand. // KQED

Orange County man who became face of GOP ballot box controversy says it ‘destroyed’ his life. // Orange County Register

See you Monday.

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Emily Hoeven wrote the daily WhatMatters newsletter for three years at CalMatters . Her reporting, essays, and opinion columns have been published in San Francisco Weekly, the Deseret News, the San Francisco...