Newsom Names New Unemployment Department Director After Claims Scandal

Gov. Gavin Newsom on Wednesday appointed Rita L. Saenz to oversee the state’s unemployment benefits department, which has been overwhelmed by claims during the coronavirus pandemic and also has paid out hundreds of millions of dollars in phony claims, including to prison inmates.

Saenz, 71, will be director of the Employment Development Department if she receives state Senate confirmation.

“With more than 40 years of experience in state government and the private sector, Rita Saenz is well-prepared to lead EDD at what is sure to be one of the most difficult moments in the department’s history,” Newsom said in a statement.

“California has certainly not escaped this national crisis unscathed but with Rita at the helm, we stand ready to ensure payments to Californians who are in desperate need of financial support while simultaneously stopping fraud in our systems and holding people who have committed fraud accountable,” Newsom said.

Saenz, a Democrat, was a consultant at Saenz and Associates. She also worked for the Xerox Corp. and was director of the state Department of Social Services from 1998 to 2004.

(Twitter/California Governor)

The Nation’s Most Populous State Was Hammered by More Than 16 Million Unemployment Benefits Claims

Saenz replaces Sharon Hilliard, who is retiring as of Thursday. Hilliard, who worked nearly four decades at the EDD, was appointed to head the department by Newsom in February, when the state’s unemployment rate was at an historic low and the coronavirus was just starting to get a foothold in the U.S.

Since then, however, the nation’s most populous state was hammered by more than 16 million unemployment benefits claims. Newsom repeatedly closed down nonessential businesses as the COVID-19 outbreak grew.

As millions lost their jobs, the department struggled with a backlog that left people with long delays for their unemployment benefits. At one point, the backlog numbered more than 1.6 million claims. Hilliard had said clearing the backlog could take until the end of January.

The department also has been criticized for granting payouts on hundreds of thousands of fraudulent claims, including some in the name of U.S. Sen. Dianne Feinstein. The state has acknowledged that it has paid about $400 million in the names of prison inmates.

The Bank of America told state lawmakers this month that it had identified about 345,000 fraudulent claims worth about $2 billion.