California is a cash machine. The state collects some of the country’s highest income, business, and fuel taxes, and now spends more than $300 billion per year. And yet, everywhere you look, California seems to be falling apart.
The roads are crumbling. Mismanaged wildfires have turned neighborhoods into ash. Drug addiction and homelessness have metastasized, turning parts of Los Angeles and San Francisco into no-go zones. And the cost-of-living crisis is pricing middle-class taxpayers out of basic necessities like groceries and gas, even as the state spends billions on welfare programs that never seem to lift anyone out of poverty.
Californians are beginning to ask: Where is all this money going? On paper, it funds hospitals, universities, schools, prisons, infrastructure, and other public services. But beneath the surface, something else is happening that California Governor Gavin Newsom does not want you to see: massive, systematic, brazen fraud.
We conducted interviews with public officials, fraud experts, and political figures, and reviewed hundreds of pages of government reports, state audits, criminal indictments, and other public records on California fraud. From unemployment insurance and Medicaid to failed homeless initiatives and welfare programs, seemingly every state program has been compromised by criminals. The best estimates suggest that, on the governor’s watch, fraudsters, scammers, and organized crime rings have stolen at least $180 billion from taxpayers.
Welcome to Gavin Newsom’s empire of fraud.
Christopher F. Rufo is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and the author of America’s Cultural Revolution. Ryan Thorpe is a technical writer at the Manhattan Institute. Kenneth Schrupp and Haley Strack are investigative reporters at City Journal.
