Scope
Jan 05, 2026

EXPLOSIVE: California Investigators Flag Massive Fraud in…

California, long hailed by progressives as a model for the rest of the nation, is unraveling under the weight of its own corruption, mismanagement, and liberal excess. A bombshell 92-page audit from the state’s nonpartisan auditor has just exposed an astonishing scale of government dysfunction under Democrat Gavin Newsom’s administration, prompting sharp rebukes from watchdogs, lawmakers, and everyday Californians demanding accountability.

 
 

The report, first brought to public attention by Newsmax, reveals a staggering $76.5 billion in potentially fraudulent or wasted spending by the Golden State’s government.

President Donald Trump responded swiftly on Truth Social, calling the findings “INSANE,” and he’s right. This is not a case of clerical errors or bureaucratic hiccups. It is endemic, systemic, and deliberate negligence that has cost taxpayers billions.

California Representative Kevin Kiley didn’t mince words during a Newsmax interview. “This means the agencies are rife with fraud, abuse, and mismanagement,” Kiley said, comparing the damage under Newsom to recent fraud scandals in Minnesota and declaring California’s situation “worse by far.”

The audit placed eight major state agencies on a high-risk list, underscoring their vulnerability to fraud and inefficiency. This includes the Department of Social Services, the Employment Development Department, and various entities responsible for financial reporting and infrastructure management .

Of particular concern is the mismanagement of CalFresh, the state’s food assistance program. With an error rate nearing 11% in federal fiscal year 2024, California could be on the hook for up to $2.5 billion in extra costs if corrective measures are not taken by 2028 .

Despite state officials blaming federal law changes for the crisis, the audit clearly identified persistent failures in administration. This is not a new problem. It is a long-festering sore that Newsom and his bureaucrats have allowed to grow while deflecting blame at every turn.

Fraud within the state’s unemployment insurance program remains rampant. Despite nationwide outrage over pandemic-era payouts, California continues to bleed taxpayer funds, with $1.5 billion in improper unemployment payments across just two years, 2023 and 2024 .

Worse still, the Employment Development Department was caught paying $4.6 million in service fees for thousands of unused mobile devices. Meanwhile, another agency overpaid an employee for 15 months, racking up $170,000 in improper compensation .

Infrastructure, often touted by Newsom as a cornerstone of California’s future, is now a case study in waste. The state’s high-speed rail project, once hailed as revolutionary, has consumed $18 billion over 17 years without completing a single section of track .

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