RELEASE: EDD Fraud Prevention Measure Passes Public Safety Committee

Legislation Will Safeguard Taxpayer Unemployment Funds

For immediate release:

SACRAMENTO – After more than $810 million taxpayer dollars were stolen last year, a bill to implement standard fraud-prevention practices at California's Employment Development Department (EDD) passed out of the Senate Public Safety Committee. Authored by Assemblywoman Cottie Petrie-Norris, AB 110 will require the Employment Development Department (EDD) to cross-check incarceration records with unemployment claims in order to prevent paying fraudulent benefits and wasting taxpayer dollars.
 
“We have a duty to our taxpayers to ensure that their money is being used responsibly,” said Assemblywoman Cottie Petrie-Norris (D-Laguna Beach). “Due to a loophole in the current system, hundreds of millions of dollars were lost. AB 110 will close a critical gap so that unemployment funds go to those who desperately need them, not to fraudsters trying to make an extra buck.”
 
Common practice in other states is to cross-check lists of unemployment benefit claimants against incarceration data. California law, however, restricts sharing this data with other agencies. AB 110 enables EDD to easily cross-check claimants’ information, including social security numbers, against the relevant information in the database of inmate information maintained by the California Department of Corrections and Rehabilitation (CDCR) and by the counties.
 
AB 110 is supported by CalChamber, California State Sheriffs’ Association, Orange County Business Council, Orange County District Attorney Todd Spitzer, Orange County Sheriff's Department, Peace Officers Research Association of California and Southwest California Legislative Council.  
 
WHAT OTHERS ARE SAYING
“Failure to protect against fraud undermines the public’s confidence and encourages criminal activity. AB 110 puts important protections in place that will ensure unemployment benefits only go to eligible unemployed individuals. Cross-checking lists of unemployment benefit claimants against incarceration data is a common-sense fraud prevention measure that will protect taxpayer dollars,” said Orange County Sheriff Don Barnes, Orange County Sheriff’s Department and California State Sheriff’s Association.

“When the criminals are running out of places to put their money and hard-working Americans can’t pay their bills because their unemployment benefits have been frozen, you have a major problem,” said Orange County District Attorney Todd Spitzer. “This isn’t just an Orange County problem. It isn’t just a California problem. This is a breakdown of catastrophic proportions that has failed the American taxpayer – and we are grateful Assemblymember Petrie-Norris is leading the charge in crafting thoughtful legislation like AB 110 to address these serious loopholes and prevent the continued theft of taxpayer dollars.”

“The backlog in claims and fraudulent unemployment payments are an embarrassment to California and its workforce when it needs help the most. Assemblywoman Petrie-Norris’ AB 110 is an important part of a package of reforms needed for EDD. This bill assures a better flow of information between EDD and the Department of Corrections and Rehabilitation to prevent unnecessary fraudulent spending, directing State dollars to those in need,” said Lucy Dunn, President and CEO, Orange County Business Council.

“The fraud on California’s UI Fund that has been widely reported throughout this pandemic is unacceptable.  The California Chamber of Commerce is glad to support Assemblywoman Petrie-Norris’ AB 110, which would facilitate sharing of information between the EDD and California’s correctional system to ensure that fraudsters do not utilize inmates’ information to steal money from California’s Unemployment Insurance Fund.  We would also note that other states’ already employ this basic safeguard, and are glad to see a common-sense solution being imported into California,” said Rob Moutrie, Policy Advocate, California Chamber of Commerce.

"The breadth of the EDD fraud is staggering.  Inmates stole money rightfully for those in need, defrauding the state for their own personal gain.  AB110 helps close this loophole, exploited by tens of thousands of inmates to the tune of hundreds of millions of dollars in taxpayer money.  This bill will direct local and state jails and prisons to provide inmate identifying information to EDD so EDD can identify and deny these fraudulent claims," said   Jeannine M. Pacioni, Monterey County District Attorney.   

This bill is jointly authored by Assemblymembers Phillip Chen (R-Yorba Linda), David Chiu (D-San Francisco), Chad Mayes (I- Rancho Mirage), Adrin Nazarian (D-Van Nuys), Rudy Salas Jr. (D-Bakersfield) and Miguel Santiago (D-Los Angeles); and co-authored by Assemblymembers Richard Bloom (D-Santa Monica), Rebecca Bauer-Kahan (D-Orinda), Tasha Boerner Horvath (D-Encinitas), Wendy Carrillo (D-Los Angeles), Cristina Garcia (D-Bell Gardens), Jesse Gabriel (D-Woodland Hills), Mike A. Gipson (D-Carson), Adam C. Gray (D-Merced), Brian Maienschein (D-San Diego), Al Muratsuchi (D-Torrance), Jim Patterson (R-Fresno), Bill Quirk (D-Hayward), Phil Ting (D-San Francisco), Carlos Villapudua (D-Stockton) and Senator Ben Allen (D-Santa Monica).
 
AB 110 will be heard by the Senate Labor Committee in early July.