OPINION:
Gov. Gavin Newsom loves to brag about California’s success, but he will never talk about how the Golden State’s Medicaid scam makes Minnesota’s Somali day care fraud look like child’s play.
The North Star State has attracted a great deal of media coverage of late, with nefarious networks accused of stealing billions of dollars in federal and state funds through bogus nonprofits, child care centers, food aid programs, inflated Medicaid billing and other social services fraud, costing American taxpayers up to $9 billion.
Americans are finally waking up to this fraud. At last, there will be a reckoning. It’s time the same happened in California, where corruption runs from top to bottom and results in lost money and death and destruction, as in the 2025 Palisades fire.
Unlike in Minnesota, one of our state’s biggest scams is legal theft. It’s called an intergovernmental transfer, in which the state exploits a loophole to match its Medicaid spending with federal tax dollars. The state then pockets this extra cash (donated by taxpayers in all 50 states) while the original spending is funneled right back to the entities that originally spent the money.
To people who aren’t bandits or bureaucrats, that might sound confusing, but the issue is simple. Local and state government providers are making big bucks by draining federal funds, and the fraud is already hurting ordinary folks. In 2024, state officials requested an increase in the cost of publicly funded ambulances from $339 to $1,168 per transport, which was approved by the Biden administration. In 2026, that eye-popping number is expected to rise even further.
Where is all that money going? It’s not hard to imagine it being pocketed by comrades and Democratic client groups favored by our leaders in Sacramento.
The problem is made more painful because no one is around to solve it. Can we trust Mr. Newsom and his array of incompetent cronies to do the right thing? Nope. They are the ones who took the problem to hyperspeed.
Intergovernmental transfer isn’t the only problem facing our state. California’s legislative analyst’s office says the state has spent $37 billion since 2019 on homelessness but can’t identify where the money has gone.
However, it can say that the number of homeless people increased. Let’s not forget that during the COVID-19 emergency, $20 billion or more state and federal dollars were doled out for fraudulent unemployment claims, some of which went to prison inmates.
The Democrats who run the state want to pretend everything is just fine.
Right now, no one is coming to save us, and the governor is preparing to run for president. That means the whole country could get a taste of what life is like in California. Let’s hope the light of publicity can be a disinfectant.
We recently learned that the Los Angeles Fire Department “watered down” a report on the Palisades fire. To me, it looks more like it was drowned at birth. Packed full of more lies than a woke-approved biology textbook, it was an attempt to shrug off the failures that led to the burning of a beautiful neighborhood.
It’s a sign of how low we have fallen that I wouldn’t have been surprised to hear some “academic” claim that the blaze was stoked on institutional racism and fueled by transphobia. That level of tragicomic deceit and deception is what we have come to expect from the left-wing folks leading some of our greatest states.
We now fully expect weapons-grade lies to be wheeled out to provide covering fire as scammers steal hard-earned tax dollars paid into the system every day by patriotic, hardworking and well-meaning Americans.
We saw glimmers of hope when the state agreed to finally stop illegal immigrants from enrolling in Medi-Cal as of this year. Starting in mid-2027, undocumented migrants will have to pay a premium originally proposed to be $100 monthly until far-left state Assembly members lowered it to just $30. Does your family’s health insurance cost $30 a month? Mine doesn’t.
That says it all.
When the anti-corruption storm breaks in California, lightning will strike in the same place many, many times. Unfortunately, some of those changes will take time — new leaders, new legislation, new regulations. Yet one thing can literally be done tomorrow: President Trump can order the Department of Health and Human Services to close the loopholes that allow intergovernmental transfer’s legalized fraud and make basic health care services more expensive.
No need to get caught up in congressional politics. Just straightforward taxpayer protection.
The Golden State is tarnished. Officials are wasting money, ruining lives and destroying livelihoods by putting themselves ahead of those they serve. Things need to change unless we want to continue to beat Minnesota at one of the worst games imaginable.
• Jerome Stocks is a past mayor of Encinitas, California. He is a longtime health insurance broker.
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