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Real, fake or overblown? Sorting fact from fiction in fraud allegations surrounding Newsom, California

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Real, fake or overblown? Sorting fact from fiction in fraud allegations surrounding Newsom, California

The year opened with President Trump declaring that “the fraud investigation of California has begun,” a move that quickly set off a barrage of allegations from his administration and Republican allies questioning the integrity of state programs and the leadership of Gov. Gavin Newsom.

The accusations, amplified across social media and conservative outlets, have pushed California and its Democratic leadership to the center of a broader national political fight over waste, fraud and abuse.

Newsom has dismissed the claims as politically driven, arguing that the administration is singling out Democratic-led states while ignoring similar problems elsewhere. The governor also responded by highlighting fraud cases in Republican-led states and by criticizing Trump’s own record and business dealings.

Against that backdrop, it has become increasingly difficult to separate substantiated fraud from fabricated or recycled claims, to distinguish old findings from newly raised allegations and to determine who can credibly claim credit for uncovering wrongdoing — all amid a toxic and deeply polarized political climate.

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Dan Schnur, who teaches political communications at USC and UC Berkeley, said allegations of malfeasance in California is a particularly ripe target for Republicans because Democrats have controlled the state Legislature and governor’s office for years.

Democrats hold a supermajority in both the Assembly and the Senate, meaning they hold at least two-thirds of seats in both houses, and not a single Republican has been elected to statewide office in California since 2006, when Gov. Arnold Schwarzenegger and Insurance Commissioner Steve Poizner were reelected.

“There is no shared responsibility here for Republicans,” Schnur said. “If you had a state in which Republicans were actually competitive, they would bear some responsibility for these problems.”

Audits and prosecutions show that California has experienced its share of fraud, particularly in complex programs involving emergency aid, healthcare and unemployment insurance. The state paid out billions of dollars in fraudulent unemployment claims during the COVID-19 pandemic, and the California State Auditor has issued repeated warnings about state agencies that are “at high risk for waste, fraud, abuse, or mismanagement.”

Along with recycling a barrage of years-old allegations of financial malfeasance in California and other Democratic states, the Trump administration elevated claims of child-care fraud in Minnesota last month, prompting Gov. Tim Walz to drop his reelection plans to focus on the growing political crisis in his state.

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Fraud allegations are increasingly being deployed as a political weapon against Newsom, a leading Trump critic and a potential 2028 Democratic presidential contender. Politicians have always railed against government waste, fraud and abuse, but now those issues are being “weaponized into a partisan issue,” Schnur said.

For the public, it can be hard to discern the truth. Here is a look at three of the central fraud allegations — and what the evidence shows.

Child-care funding

President Trump used his social media platform, Truth Social, to accuse California of widespread fraud last month, drawing a link between his administration’s investigation into child-care spending in Minnesota and programs in the Golden State, and announcing a major federal “fraud investigation” into the state’s actions.

“California, under Governor Gavin Newscum, is more corrupt than Minnesota, if that’s possible???” wrote Trump, using a disparaging nickname for the governor.

The Trump administration then moved to freeze $10 billion in federal funding for child care in five Democrat-led states — California, New York, Colorado, Illinois and Minnesota — over “serious concerns about widespread fraud and misuse of taxpayer dollars.”

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In a trio of Jan. 6 letters addressed to Newsom, the U.S. Department of Health and Human Services said it was concerned there had been “potential for extensive and systemic fraud” in child care and other social services programs that rely on federal funding, and had “reason to believe” that the state was “illicitly providing illegal aliens” with benefits.

The letters did not detail evidence to support the claims. The governor’s office dismissed the accusation as “deranged.”

A federal judge subsequently blocked the Trump administration temporarily from freezing those funds. In that ruling, U.S. District Judge Vernon Broderick said he didn’t understand why the government was making it harder for states to access child-care money before any wrongdoing had been discovered.

“It just seems like the cart before the horse,” he said.

Hospice funding

Days after Trump’s social media post about alleged corruption under Newsom’s watch, Dr. Mehmet Oz, administrator for the Centers for Medicare & Medicaid Services, and Bill Essayli, the top federal prosecutor in Los Angeles, held a joint news conference on public benefits fraud, but offered few details about the scope of their investigation.

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The officials accused “foreign actors” of draining billions from public healthcare programs in California, referencing bogus hospice providers first exposed by The Times in 2020 and later investigated by California Atty. Gen. Rob Bonta.

Essayli placed the blame for bad actors squarely on Newsom, calling him “the fraud king.”

Weeks later, Oz released a video of himself walking in the Los Angeles neighborhood of Van Nuys as he questioned why dozens of alleged hospices were operating along four blocks. He blamed the “Russian Armenian Mafia” and made his remarks while pointing to an Armenian bakery, prompting accusations of racism from the Armenian community.

Newsom’s office last week hit back by highlighting state efforts to fight fraud, while pointing to a 2025 Axios story on the Trump administration’s decision to pause a federal program to crack down on bad hospice operators.

Bonta’s office said it has filed criminal charges against 109 individuals over hospice fraud-related offenses and launched dozens of civil investigations.

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Newsom, speaking at a Bloomberg event Thursday in San Francisco, said the allegations have been recycled and misrepresented. Later that day, he filed a civil rights complaint against “baseless and racist allegations against Armenian Americans in California” made by Oz.

“Hospice, we’ve been after that for years and years before Oz was even on the scene,” Newsom said. “In 2021, we did a moratorium on new hospice programs, 280 we shuttered.”

The Center for Medicare & Medicaid Services said earlier this year that — in addition to California — Arizona, Nevada, Texas, Ohio and Georgia are being monitored following allegations of fraud and waste.

EDD fraud

The state’s Employment Development Department, known as EDD, reported in 2021 that approximately $20 billion was lost due to fraud, largely in the federal Pandemic Unemployment Assistance (PUA) program.

While unemployment fraud was rampant across country during the pandemic as governments rushed to provide support, California’s problems stood out.

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The state itself admitted in 2021 that it failed to take precautions that had been implemented in other states, including using software to identify suspicious applications and cross-checking benefit claims against personal data on state prison inmates.

Rep. Kevin Kiley (R-Rocklin) said department mismanagement and fraud often overlap and cited EDD as a prime example.

“When there is a lack of internal controls, a lack of diligence of how funds are used, that makes it easier for those who want to take advantage of the system to profit,” Kiley said.

EDD’s own tracker said the state has recovered more than $6 billion in stolen funds and opened more than 2,300 unemployment fraud investigations since the pandemic began, leading to nearly 1,000 arrests and more than 670 convictions.

The department said it has expanded fraud enforcement through partnerships with law enforcement, new identity-verification technology and a dedicated fraud task force.

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But, reports of mismanagement at EDD have continued. A recent audit also found EDD wasted $4.6 million by paying monthly service fees for more than 6,200 cellphones that went unused for at least four consecutive months between November 2020 and April 2025 — including some devices that were inactive for more than four years.

At the same time, “EDD continues to have high rates of improper [unemployed insured] payments, including fraudulent payments, and it needs to improve the customer service it provides to UI claimants,” another report found.

What’s next?

Newsom said there is a reason the Trump administration is not pointing to fraud in Republican-led states.

“This is about polarization, politicalization, weaponization,” Newsom said Thursday.

Asked what the Trump administration will discover in probing California for fraud, Newsom said investigators will find a state “taking that issue very, very seriously.”

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“We absolutely are here to be a partner, to go after waste, fraud and abuse,” Newsom said.

State audits show vulnerabilities persist. The California State Auditor has repeatedly flagged Medi-Cal eligibility discrepancies that have exposed the state to billions of dollars in questionable payments, while also warning that weaknesses in information security across state agencies remain a high-risk issue.

Curtailing waste could be particularly important during the upcoming year as California and its state-funded programs head into a period of volatile fiscal uncertainty, driven largely by events in Washington and on Wall Street. Newsom’s own optimistic budget proposal projects a $3-billion state deficit for the next fiscal year despite no major new spending initiatives.

The nonpartisan Legislative Analyst’s Office warned in November that California faces a nearly $18-billion budget shortfall.

It will also be a key issue in upcoming elections. A group of Republicans running for statewide offices, including California gubernatorial candidate Steve Hilton, pegged that the state’s annual estimate of fraud, waste and abuse across state programs at $250 billion, an estimate that includes unverified public tips submitted to a campaign-run website.

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The group cited the estimate as justification for creating their own “California Department of Government Efficiency,” or CAL DOGE, a nod to a similarly named federal initiative promoted by Elon Musk that generated headlines but has not produced documented savings or formal audit findings. CAL DOGE is not currently a state department, despite its name.

Who deserves credit when fraud is prosecuted has also become a point of contention. After a man was arrested last month for fleecing L.A.’s homeless services program for $23 million, critics of Newsom were quick to blame the governor. Newsom responded by saying the case was uncovered by local investigators working with law enforcement, which he added is “exactly the kind of accountability and oversight the state has pushed for.” (The Los Angeles district attorney’s office ran a parallel, independent investigation.)

Essayli responded on social media by saying no one made an arrest until Trump and Atty. Gen. Pam Bondi “appointed me to investigate and charge fraud offenses in California.”

Kiley, the California Republican congressman, said despite the partisan fighting over fraud, the issue should rally both parties.

The “easiest” way to solve the state’s budget problems and improve government services for taxpayers is to “minimize and eventually eliminate fraud,” said Kiley.

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Hilton and Becerra lead California’s unsettled governor’s race; Steyer faces elimination

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Hilton and Becerra lead California’s unsettled governor’s race; Steyer faces elimination

As election officials continued tallying ballots Wednesday, Republican Steve Hilton and Democrat Xavier Becerra continued to lead in the unsettled race to replace termed-out Gov. Gavin Newsom, with billionaire Democrat Tom Steyer hoping for a surge in late-arriving votes to push him into one of the top-two spots to advance to the November general election.

Hilton, a British immigrant and former Fox News commentator, told reporters outside the state Capitol in Sacramento Wednesday morning that he was “very encouraged” by the latest results, though he stopped short of declaring victory.

“It does look as if change is coming to California, and that is good news for everyone, every small business, every working family, everyone who wants to see our state set back on track,” he said.

Becerra and Steyer did not hold public events as of Wednesday afternoon.

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Election data analyst Paul Mitchell said it would be nearly mathematically impossible for Steyer to close the gap.

“As we start to get more data, the runway is going to get shorter and shorter,” he said.

He said Steyer, to finish in the top two in the primary, would have to get about 30% of the remaining uncounted votes while Becerra would need to be limited to 15%. The self-funded billionaire has “a very high hill to overcome, and the challenge gets steeper and steeper as we get more data from the counties,” Mitchell said.

Once mired near the bottom of a crowded pack of Democrats in opinion polls, Becerra, a former Biden administration cabinet member, rocketed ahead of his rival candidates after former Rep. Eric Swalwell dropped out of the race in April amid allegations of sexual assault and misconduct. The scandal triggered an upswing of voter interest in California’s once sluggish governor’s race and in Becerra, who seized the moment.

“Here in Hollywood’s hometown, we love a good underdog story,” Becerra told cheering supporters at his election night party at La Plaza de Cultura y Artes in downtown Los Angeles.

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Becerra spoke about his Mexican immigrant parents and becoming the first in his family to attend college. Though a longtime California politician, Becerra said that his campaign for governor was outspent and that he faced calls to drop out of the race.

“The underdog stayed in the fight,” he said. “Like my parents, I never gave up. … Never stopped believing in the beacon-light goodness of California and thankfully, neither did you.”

Steyer, who spent more than $216 million of his wealth on the race, has not conceded defeat.

His campaign manager, Heather Hargreaves, wrote in a letter to supporters Wednesday that “we’re going to give democracy time to work. County election officials are still counting ballots and don’t expect to know how many people voted in total until” Thursday, when officials are required to report the estimated number ballots left to process.

The billionaire former hedge fund owner campaigned against the corporate and special interests that have a powerful presence in Sacramento and often spend heavily in elections, including this year against Steyer.

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Billionaires “do everything they can to hoard their wealth and avoid paying taxes, and we see corporations continue to rig the system for themselves — raising your prices to juice their profits. Screw that,” Steyer said at his election watch party at the Regency Ballroom in San Francisco.

Other candidates in the race included Republican Riverside County Sheriff Chad Bianco and Democrats including former Rep. Katie Porter, San José Mayor Matt Mahan, former Los Angeles Mayor Antonio Villaraigosa and state Supt. of Public Instruction Tony Thurmond.

Villaraigosa, Mahan and Porter conceded the race Tuesday night.

California’s 2026 race for governor started slow but ended with a flourish, including the demise of a scandal-ridden Democratic favorite, the anointing of a Republican by Trump and Becerra’s unexpected rise from the depths of the candidate field.

Unlike gubernatorial elections in the last quarter of a century, this year’s race lacked a clear crowd-pleasing front-runner able to win over voters, such as movie star Arnold Schwarzenegger or Jerry Brown, a sage of the California electorate and scion of a storied political family. But it unfolded at a time when the state’s residents are overwhelmed by high housing costs, steep gas prices and overall unaffordability that threatens the “California dream” that once drew millions of people to the state.

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“Normal people are not living and breathing politics on a daily basis,” said Tim Rosales, a strategist who ran Republican John Cox’s unsuccessful 2018 gubernatorial campaign. In today’s information-saturated environment, Rosales said, the race and its roster of “extremely milquetoast candidates” didn’t break through until the Swalwell scandal grabbed voters’ attention.

The 2026 gubernatorial primary has been one of the most unpredictable and expensive in decades and a race that was shaped early on by a number of heavyweight Democrats staying on the sidelines.

Though supporters urged them to run, former Vice President Kamala Harris, Sen. Alex Padilla and Atty. Gen. Rob Bonta passed on the race. It was in a state of limbo for months last year as Harris, one of the state’s most high-profile politicians, weighed whether to jump in.

“I don’t ever recall a playing field that looks like this one. Usually there’s a clear front-runner,” said veteran Democratic strategist Darry Sragow. “It’s easy to say that it reflects a lack of talent [but] that’s absolutely not true. Almost any of the candidates running could make a good governor.”

Still, candidates struggled for months to break through to voters.

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In February, polls showed the crowded field of Democrats splitting liberal voters and opening a statistical possibility that the party would be boxed out of November under California’s open, top-two primary, which places all candidates on the same ballot. Only the first- and second-place finishers in the primary advance to the general election, regardless of their party affiliation.

Just when Swalwell appeared on the cusp of becoming the Democratic front-runner the San Francisco Chronicle and CNN published allegations that he sexually assaulted a former staffer and acted inappropriately with other women. Swalwell suspended his campaign.

It was Becerra who benefited the most. In less than two months, he vaulted from polling in the low single digits to the top of the field of candidates, according to surveys conducted by UC Berkeley’s Institute of Governmental Studies that were co-sponsored by the Los Angeles Times.

“Becerra caught lightning in a bottle,” Rosales said. “It could have easily gone to any of the other candidates,” but many had baggage. Videos of Porter losing her temper hurt her image, the source of Steyer’s wealth and his unbridled campaign spending weighed on voters’ minds, and Villaraigosa and Mahan were “more centrist than what most Democrats wanted, and so Xavier Becerra was really the safe choice,” Rosales said.

Before Democratic voters began to narrow down their choices, Trump endorsed Hilton in early April. It helped the former Fox News host break away from Bianco, his main GOP rival.

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In the days before the primary election, the race solidified into a three-way contest involving Becerra, Steyer and Hilton.

Steyer stepped up his fight in the remaining days, seeking to squeeze into one of the top two spots by battering Becerra in ads and at campaign rallies as a politician propped up by corporate special interests.

“We cannot afford to have a governor who’s been bought off by Big Oil. Period,” he said at a Sunday rally in Los Angeles.

Corporations, along with labor unions and interest groups including the California Assn. of Realtors, had spent more than $18.7 million to boost Becerra, according to the election spending tracker California Target Book. Many of the same groups also gave money to a committee intended to attack Steyer.

As the election neared, Becerra sharpened his attacks against Steyer, calling the billionaire a “liar” and accusing him of trying to buy the election.

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“We are not going to let a billionaire or Trump’s handpicked candidate take over this state,” he said during a Sunday rally in Long Beach.

If Becerra faces off with Hilton in November he’ll have a distinct advantage. Democratic voters outnumber Republicans nearly 2 to 1 in left-leaning California.

Winning the general election would make the 68-year-old Becerra the first elected Latino governor of California. At roughly 40% of the state’s population, Latinos are California’s largest ethnic group but have not been represented in the governor’s mansion since 1875, when then-Lt. Gov. Romualdo Pacheco was elevated to fill a 10-month vacancy.

Times staff writers Iris Kwok, Susanne Rust, Andrew Khouri and Christopher Goffard contributed to this report.

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Video: Steve Hilton Holds Slim Early Lead in California Governor’s Race

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Video: Steve Hilton Holds Slim Early Lead in California Governor’s Race

new video loaded: Steve Hilton Holds Slim Early Lead in California Governor’s Race

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Steve Hilton Holds Slim Early Lead in California Governor’s Race

Steve Hilton, a Republican and former Fox News host, held a narrow lead in early votes over two Democratic opponents in California’s nonpartisan primary for governor. The top two candidates will advance to the general election in November.

“Change is coming to California, and it’s long overdue. I want to just say something from my heart to every single person who’s voted for me. We’re not — We’re not there yet, but it’s looking good.” [cheers] “Tonight, the people of the great state of California, in the greatest nation on earth, have spoken. [cheers] Loudly and proudly. [cheers] And while I take nothing for granted, there are lots of ballots left to be counted, it appears that we are on track to advance to November.” [cheers] “It might take some time to figure out where this is going. We’re going to wait until every ballot is counted. We’re going to give democracy a time to work, and we know we finished really strong.” [cheers]

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Steve Hilton, a Republican and former Fox News host, held a narrow lead in early votes over two Democratic opponents in California’s nonpartisan primary for governor. The top two candidates will advance to the general election in November.

By Axel Boada

June 3, 2026

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Spencer Pratt surges to runoff in LA mayor’s race after angry voters send message to Karen Bass

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Spencer Pratt surges to runoff in LA mayor’s race after angry voters send message to Karen Bass

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Reality television personality Spencer Pratt appears on track to clear a key hurdle in Los Angeles’ mayoral race as he seeks to unseat incumbent Mayor Karen Bass in November.

Bass, who has led the city since 2022 amid a turbulent stretch rocked by her response to wildfires, advanced to a runoff after failing to secure a majority of the vote in Tuesday’s primary election. With no candidate surpassing the 50% threshold, the top two finishers will face off in a November runoff.

The anticipated runoff is a symbolic blow to Bass, who was endorsed by Gov. Gavin Newsom, D-Calif., and former Vice President Kamala Harris and has spent decades serving California in a series of elected Democratic offices.

Pratt, a first-time candidate known for the MTV reality show “The Hills,” was running in second place as of Wednesday morning.

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Los Angeles Mayor Karen Bass attends the Women for Bass Phone bank event in the Baldwin Hills area of Los Angeles on June 1, 2026. (Louise Barnsley/Splash for Fox News Digital)

REALITY TV STAR SPENCER PRATT TESTS LA VOTERS’ APPETITE FOR POLITICAL OUTSIDER

“Obviously, God wanted five more months of me exposing the failures of our mayor,” Pratt gloated to reporters as the returns came in Tuesday evening. 

Pratt has relentlessly hammered Bass on issues that have long plagued the city, including fire recovery, street homelessness and crime. The insurgent candidate holds Bass personally responsible for devastating wildfires that destroyed more than 18,000 structures in the city, including his Pacific Palisades home. 

Pratt’s surge appears to have shut out Los Angeles City Council member Nithya Raman, a former ally of Bass who challenged the incumbent from the left and was once viewed as a threat to her bid for a second term. Raman is a member of the Democratic Socialists of America and has argued for steering the city in a more progressive direction.

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Raman has not yet conceded despite running well behind Bass and Pratt as of Wednesday morning.

Pratt, a registered Republican, faces an uphill battle to defeat Bass in November if he advances to the runoff election.

Less than 20% of voters in the heavily Democratic city identify with the GOP, though Los Angeles’ mayoral contest is officially nonpartisan. 

Media personality and independent candidate Spencer Pratt, left, pictured alongside LA mayor Karen Bass, right. (Robert Gauthier/Los Angeles Times via Getty Images; Justin Sullivan/Getty Images)

KAREN BASS GRILLED OVER BROKEN HOMELESSNESS PROMISE, BLAMES BUREAUCRACY FOR SLOWED PROGRESS

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Rep. Darrell Issa, R-Calif., who represents a San Diego-anchored seat, told Fox News Digital that Pratt has won a following in the mayoral contest due to widespread voter discontent with Bass’ leadership.

“He’s catching fire among ardent historic Democrat voters because Karen Bass has been so ineffective,” Issa said in an interview. “And every time she opens her mouth, she’s talking about more of the same to people who have seen their streets, both crime-ridden and in fact … ineffectively managed.” 

Bass, conversely, argues that her leadership is leading Los Angeles in the right direction.

“Los Angeles is at a turning point. After decades of rising homelessness, under-built housing and a shrinking police force, it’s Mayor Karen Bass who finally stepped up to change how City Hall works,” Bass’s website reads.

Los Angeles City Councilmember Nithya Raman appears likely to finish in third place, keeping her out of the November runoff. (Eric Thayer/Getty Images)

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“Homelessness is down, more housing is being built, and the LAPD is hiring new officers,” it also claims.

Fox News Digital’s Leo Briceno contributed reporting.

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