Su, who currently oversees the California Labor and Workforce Development Agency, will likely face tough questioning over her handling of the state’s unemployment claims during the pandemic — which has been inundated with allegations of widespread fraud.
A recent state audit found that under Su’s leadership, California has mistakenly paid out $11.4 billion in fraudulent unemployment benefits since the pandemic started last March, with some estimates ranging as high as $31 billion.
“There is no sugarcoating the reality,” Su said in a January press conference following the report. “California has not had sufficient security measures in place to prevent this level of fraud, and criminals took advantage of the situation.”
Su said the state’s Employment Development Department was “overwhelmed” with unemployment requests after the pandemic hit the U.S.
She also in part blamed the Trump administration for not providing federal assistance to states struggling with massive unemployment rates.
“Every state has been struggling,” Su added. “What we think would have been helpful was for the federal government at the time to have developed a coherent and coordinated, proactive approach to the fraud, not just investigating cases after they happen.”
But Su’s nomination isn’t the only item on Biden’s agenda that could force the Senate to take pause.
Biden has called to raise the federal minimum wage to $15 an hour as a part of the latest coronavirus relief package – a move that Su, former civil rights lawyer, has advocated for and a policy with which Washington state native, Suzi LeVine is familar.
As Washington state’s previous Employment Security Department head, LeVine, also left behind a legacy burdened with an unemployment scandal, when she left her post to join the Biden administration in early February.
Over $600 million were lost to what officials believe was a well-organized Nigerian fraud ring, relying on stolen identities commandeered during data breaches. More than 122,000 fraudulent claims have led to the state’s massive losses.
LeVine will join the Department of Labor as an interim assistant secretary of the Employment and Training Administration – meaning she will be assisting with the Biden administration’s economic recovery plan.
The U.S. has seen a loss in 10 million jobs since the pandemic started.
The White House cold not immediately be reached for comment.
Morgan Phillips and Thomas Barrabi contributed to this report.