Republican gubernatorial candidate Steve Hilton and state controller candidate Herb Morgan released the Califraudia report, claiming $250 billion in fraud, waste, and abuse across California government programs over the past five years. The report is based on hundreds of whistleblower tips.
The release coincided with President Trump announcing a federal investigation into California, though details on the agency leading the probe were not disclosed. Governor Newsom dismissed the claims as false.
The report highlights:
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$32 billion in pandemic unemployment fraud, with claims filed using stolen identities.
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Eight state agencies labeled high-risk for waste or mismanagement, including the Employment Development Department and Department of Social Services.
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Medi-Cal: $4 billion in questionable payments due to eligibility discrepancies.
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Homelessness funding: $24 billion spent from 2019–2024 with poor tracking.
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Community colleges and K-12 schools: Millions lost to fake students and alleged pay-to-play abuse.
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Newsom’s former chief of staff, Dana Williamson, faces 23 federal charges for alleged fraud and misuse of campaign funds.
Governor Newsom’s office counters that $125 billion in fraud has been blocked or recovered under his administration. The report and investigation set the stage for the 2026 California election, where oversight of state programs will be a key issue.
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