Reform California with Carl DeMaio · Carl DeMaio

Gavin Newsom's "Empire of Fraud" Exposed: Indictments Finally!

April 4, 2026·22 min·1 clip

DeMaio's core argument: 80% of California welfare money comes from federal funds, so state politicians see the fraud as free money flowing into California — and then they take a cut through mandatory union dues.

Carl DeMaio opens by framing the episode around federal indictments in California welfare fraud cases, but immediately argues that the indictments — while welcome — do not reach the real culprits, who he identifies as the politicians who designed and maintain the fraud systems. He promotes Reform California and its voter guide, ballot measure campaigns, and candidate endorsements at reformcalifornia.org. DeMaio describes a press conference by Herb Morgan, a candidate for California state comptroller, who published fraud estimates: $55 billion in unemployment insurance, $95-$115 billion in Medi-Cal, $25 billion in CalFresh, and $20-$25 billion in homelessness programs, totaling $312-$425 billion over five years. DeMaio also references a City Journal report by Chris Rufo titled 'Gavin Newsom's Empire of Fraud,' which he says documents $180 billion in proven fraud under Newsom specifically. He notes California's state budget has grown from roughly $180 billion when Newsom took office to $300 billion now, despite the state losing population. DeMaio runs through specific programs: food stamps fraud at double the national average, with California reporting $25,815 in fraudulent first-quarter 2025 payments compared to zero for South Dakota; homelessness programs spending nearly $30 billion under Newsom with $1 million per unit projects and $6,500 per month hotel rooms; and IHSS, which Schwarzenegger's administration estimated had a 25% fraud rate in 2009. DeMaio notes that 800,000 IHSS workers constitute the largest job category in California's budget, and that 41% of all job gains under Newsom came from IHSS alone, while private sector employment declined. He also mentions 89 hospice companies registered to a single Los Angeles building, and cites a Dr. Oz task force focused specifically on California Medi-Cal fraud. DeMaio then presents his core thesis: California politicians allow the fraud because 80% of the money involved comes from federal funds, which they treat as free income for the state, and because IHSS workers' mandatory SEIU union dues — including from fraudulent participants — flow directly into Democratic campaign coffers. He extends this argument to allege that left-wing NGOs such as CHERLA (Coalition for Humane Immigrants Rights Los Angeles) receive state contracts with no deliverables in exchange for political organizing, ballot harvesting, and canvassing. He says he was removed from the state budget committee after reading these contracts aloud in a public meeting. DeMaio describes 15 people indicted in the latest hospice fraud wave for stealing $50 million, led by U.S. Attorney Bill Asseli. He closes by flagging Senate Bill 560 by Senator Smallwood-Cuevas, which would raise the minimum threshold for welfare fraud prosecution to $25,000, which he calls a deliberate move to protect fraudsters.

As heard by us

A blunt California politics listen built around fraud claims, spending, and accountability.

Reform California with Carl DeMaio treats California fraud as a clean conflict between taxpayers and politicians, and it keeps returning to the same core grievance: too much money, too little accountability.

Read the full review in PlayNext →

Why you'd press play

You want a no-soft-pedals take on California fraud claims, with the episode pointing at food stamps, homelessness spending, and IHSS.

Read the full recommendation in PlayNext →

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