‘This is a plane that has crashed’: Assemblyman says EDD needs to be reformed

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SACRAMENTO, Calif. (KTXL) — Assembly members are still speaking out about Tuesday’s announcement, where a task force of district attorneys alleged 20,000 fraudulent claims had been filed on by or on behalf of prison and jail inmates.

“How is that when my constituents make a single typo on their EDD application, they’re left without income for months?” Assemblyman David Chiu, D-San Francisco, said to FOX40 Wednesday.

California’s Employment Development Department is accused of paying out at least $140 million but they estimated the amount could reach $1 billion, according to the task force.

According to prosecutors, in some cases, inmates worked with people to file claims and in other cases, Social Security numbers were used without inmates’ consent. Some inmates filed the claims.

The EDD is even accused of sending payments directly to prisons, prosecutors added.

“This is a plane that has crashed and the administration has to rebuild it and fly it again,” Chiu said.

Chiu said the way he sees it, with millions of backlogged claims, out-of-work Californians unable to get their questions answered and Social Security numbers exposed, this alleged inmate debacle is hardly the first time the EDD has failed Californians.

However, lawmakers have struggled to find a way to reform the EDD without making matters worse for people still caught in the hundreds of thousands of backlogged unemployment claims.

“We don’t have the luxury of hitting pause for a year or shutting this department down and starting another one,” Chiu said. “We’ve got to build up from what we have.”

In September, a governor-appointed EDD strike force made a series of recommendations related to their main focus: improving the experience for EDD customers. They weren’t tasked with rooting out fraud and mostly looked at fraud in the context of EDD efficiency.

However, their report clearly stated, “There is evidence that California may in fact be the victim of significant organized fraud.”

Chiu said he wants that team back in place with a focus on fraud.

“My hope is that that team will be reactivated, brought in because we need outside eyes to analyze what’s happening, solve these problems,” he explained. “We have no time to waste.”

Chiu said to expect some action on the EDD when the Legislature is back in session early next month. He added that he’s talking with other lawmakers about what type of changes would be appropriate to put into law.

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