Biden picks Julie Su for labor secretary, despite massive California fraud

WASHINGTON — President Biden said Tuesday he will nominate deputy labor secretary Julie Su to replace Marty Walsh as labor secretary — despite Su overseeing billions of dollars in fraudulent handouts when she held the same post in California.

Su, 54, was the Golden State’s labor secretary from January 2019 to July 2021 and took heat for her agency’s sluggish distribution of COVID-19 unemployment benefits. According to a nonpartisan report from August, payments to roughly 5 million California workers were delayed during the pandemic — while around 1 million more had their benefits wrongly denied.

But that looked like a minor hiccup after Su admitted in early 2021 that California’s Employment Development Department may have paid out as much as $31.4 billion in unemployment funds to fraudsters. More recent estimates have put that amount as high as $40 billion.

“There is no sugarcoating the reality,” Su said at the time. “California did not have sufficient security measures in place to prevent this level of fraud.”

White House deputy press secretary Olivia Dalton defended Su’s performance in California during a Tuesday gaggle on Air Force One — previewing what could become a contentious subject at her Senate confirmation hearings.

“When the pandemic hit, red and blue states were dealing with fragile, outdated technology,” Dalton told reporters en route to a speech by President Biden in Virginia Beach, Va. “And under Julie’s leadership, California took important steps to process a historic number of claims — one in five in the entire nation.

“Julie believes safety nets must be strengthened and during her time at DOL she has worked with states to set a big table national approach to these issues because they are a national problem,” Dalton went on. “And I’ll add that since taking office President Biden has prioritized combating potential fraud [in] relief funds, just as he did aggressively and successfully as vice president.”

The Democrat-run California state government has tried to deflect blame by describing unemployment benefit fraud as a “national problem,” but critics such as Rep. Kevin Kiley (R-Calif.) have hammered Su’s performance — with Kiley describing her as “failing up” into federal positions.

“While hardworking California citizens couldn’t get their benefits, she let $30 billion go out the door in fraudulent payments to criminals – the largest fraud of taxpayer dollars in history,” Kiley wrote in a recent blog post.

Seven California House Republicans, led by Kiley, wrote Biden a letter this month urging him not to pick her. Signers included Reps. Tom McClintock, Jay Obernolte, Young Kim, Ken Calvert, Darrell Issa and Mike Garcia.

On the other side of the aisle, Biden had faced pressure from congressional Democrats to pick Su after initial blowback for selecting Walsh, then the mayor of Boston, to be labor secretary at the outset of his administration. With the choice of Walsh, Biden became the first president without an Asian cabinet member since George H.W. Bush.

The Congressional Asian Pacific American Caucus demanded earlier this month that Biden pick Su to replace Walsh, who resigned to become executive director of the National Hockey League Players’ Association, effective next month.

“[T]he inclusion of an AANHPI as a Cabinet Secretary is long overdue,” the caucus said, using an acronym for Asian Americans, Native Hawaiians and Pacific Islanders.

Democrats currently control the Senate with a 51-49 majority, meaning Su is unlikely to be blocked unless opposition forms among members of her own party.

Two months after Biden took office — and one month after he tapped Su to be Walsh’s deputy — Sen. Tammy Duckworth (D-Ill.) threatened to block confirmation of presidential nominees in protest of West Wing aide Jen O’Malley Dillon making an “incredibly insulting” remark brushing off concern about a lack of prominent Asian picks.

Dillon allegedly said Biden’s critics should be satisfied with Vice President Kamala Harris, who was born to an Indian mother and a Jamaican father.

“To be told that, ‘Well, you have Kamala Harris, we’re very proud of her, you don’t need anybody else’ is insulting… that was the trigger for me,” Duckworth said at the time.

“But multiple times I’ve heard that. And that’s not something you would say to the black caucus, ‘Well, you have Kamala, we’re not going to put any more African-Americans in the cabinet because you have Kamala.’”

Duckworth said that “when I asked about AAPI representation … the first words out of the staff’s mouth was ‘Well, we’re very proud of Vice President Harris’, which is incredibly insulting.”

A fellow Asian-American Democrat, Sen. Mazie Hirono of Hawaii, backed up Duckworth’s initiative.

Duckworth later backed down when the White House agreed to appoint an in-house Asian-American liaison officer, Erika Moritsugu, to serve as a deputy assistant to Biden.

Two Asian Americans, US Trade Representative Katherine Tai and presidential science adviser Arati Prabhakar, hold cabinet-level positions but are not Senate confirmed.

Su was born in the US to parents from China and graduated from Stanford and Harvard Law School. She would be the first Asian-American, Senate-confirmed cabinet member since the resignation of Elaine Chao as transportation secretary in January 2021.

Norman Mineta became the first cabinet secretary of East Asian descent in 2000, serving under President Bill Clinton as commerce secretary and continuing under President George W. Bush as transportation secretary until July 2006.

Chao was labor secretary throughout Bush’s eight years in office and was followed by three Asian-American Cabinet secretaries under President Barack Obama — Energy Secretary Steven Chu (2009-2013); Veterans Affairs Secretary Erik Shinseki, who resigned in 2014 amid the VA hospital negligence scandal; and Commerce Secretary Gary Locke.