The Labor Department said Wednesday that lax oversight, outdated technology, lax identity verification and lax controls “have allowed unprecedented fraud to flourish.”
(AP) – The US Department of Labor told states Wednesday to take immediate action to combat fraud, waste and abuse in their unemployment insurance programs — and that they could have their administrative funds withheld if they don’t comply.
The letters, which were addressed to the governors of each state, are the latest in a series of actions by the President The administration of Donald Trump focused on fraud, waste and abuse in state programs involving federal funding. As with most other similar announcements, the administration focused on issues in states where Democrats control the government.
“We are officially putting governors on notice,” Acting Secretary of Labor Keith Sonderling said in a statement Wednesday. “The American people will no longer tolerate the flagrant waste, fraud and abuse of their hard-earned tax dollars – no state should allow this. If states do, they will suffer the consequences.”
The Department of Labor provides few details
The Labor Department said Wednesday that lax oversight, outdated technology, lax identity verification and lax controls “have allowed unprecedented fraud to flourish.”
In her announcement, he cited problems in California, Illinois and New York — three states where Democrats control state governments.
California Governor Gavin Newsom’s office slammed the move and criticized the first Trump administration’s “lax regulations and hasty distribution” of unemployment benefits during the COVID-19 pandemic.
“Meanwhile California outperforms other states in addressing fraud,” Newsom spokeswoman Marissa Saldivar said in a statement.
The federal Labor Department did not immediately respond to questions from The Associated Press about the details of the alleged fraud.
The unemployment insurance program has been called into question before
The nonpartisan Government Accountability Office estimated that fraud accounted for between 11% and 15% of the amount paid out through unemployment insurance programs from April 2020 to May 2023, when the country was under a public health emergency for the pandemic.
During that time — which included the final months of Trump’s first term and more than half of former President Joe Biden’s time in office — access to funds eased and the government noticed the problems while the money was flowing out.
In the new letter to states, the department said the fallout from the pandemic-era fraud “is still playing out.”
The Labor Department said states will receive further guidance in the coming weeks.
The administration has focused on fraud in state-federal programs
Vice President JD Vance is overseeing one anti-fraud task force focused on the potential misuse of social programs.
The Department of Health and Human Services tried to withhold money for child care subsidies and other social service programs from five states — all governed by Democrats — but has been rejected by a court. The department has also announced this using artificial intelligence to check how states and other recipients of federal dollars are auditing their program.
The Department of Agriculture has threatened to withhold administrative funding from states that do not provide data on Supplemental Nutrition Assistance Program participants, including their immigration status.
By GEOFF MULVIHILL Associated Press
Associated Press reporter Sophie Austin in Sacramento, Calif., contributed to this article.
Subscribe to our free newsletters
Our weekly newsletter Closing arguments provides the latest on ongoing trials, major litigation and decisions in courts around the US and the world, while monthly Under the lights feeds legal dirt from Hollywood, sports, Big Tech and the arts.
