The Brief

By the first COVID summer, no one knew who was who. In Nigeria, an oil company IT engineer was allegedly filing for unemployment in California and 16 other states with a slew of fake Gmail accounts. At a desert state prison in Imperial County, an inmate used personal data bought on the dark web to funnel unemployment money to his wife for a $71,000 Audi and a down payment on a house. Along the Pacific coast in Carlsbad, Danny Ramos was one of millions of real California workers realizing that something was going very wrong, as weeks or months went by without the unemployment benefits they badly needed.

“It felt,” Ramos said, “like this was just a big old scam.”

As California unemployment claims spiked 2,300% in the early months of 2020, the state’s top labor officials ricocheted from crisis to crisis, internal communications obtained by CalMatters show. Emails and emergency meeting notes detail how the long-troubled California Employment Development Department became the focal point — and then the punching bag — for state efforts to stave off economic collapse while contending with a historic wave of fraud.

“This is bigger than anything we have ever experienced,” then-EDD Director Sharon Hilliard wrote in an email the day before California shut down in mid-March 2020. “Everybody is moving at the speed of light.”

But soon, Bank of America, the EDD’s unemployment debit card contractor, warned that it might not have enough plastic to print the millions of cards that the agency needed. An assistant in Gov. Gavin Newsom’s office emailed the state’s then-Labor Secretary Julie Su asking what to do about someone fraudulently using his Social Security Number to file for unemployment. A staffer for San Francisco Assemblymember Phil Ting pleaded for help for a constituent so distraught about “the runaround” from EDD that she was suicidal.

All across the country, states were dealing with their own versions of this race to prevent a modern-day Great Depression by getting money to laid-off workers, fast. Nowhere was the challenge more daunting — and the fallout more widespread — than in California.

A year-long CalMatters investigation found that the EDD was primed for disaster by years of failing to heed red flags, stalling reforms and abruptly abandoning a pre-pandemic effort to get ahead of exploding online fraud — issues that rose to the top of political agendas and budgets around recessions, but were never really fixed as governors, legislators and federal regulations changed. Once it all boiled over in the spring of 2020, California got the worst of both worlds: tens of billions of dollars lost to fraud, and workers who lost their financial stability, their homes or, in extreme cases, their lives.

“It’s almost like a pendulum, where EDD has opened up the door, and fraud’s happening,” former California Auditor Elaine Howle told CalMatters this summer. “And then, ‘Oops, oh my God, there’s fraud. Let’s freeze all these accounts.’”

Amid these twin failures of rampant fraud and financial harm to real workers, the EDD and top unemployment contractors Bank of America and Deloitte kept raking in millions of dollars from the state’s troubled system. The bank paid the EDD roughly one-third of the nearly half a billion dollars in unemployment debit card revenue generated from March 2020 through December 2022, according to state data requested and analyzed by CalMatters. The bank told state lawmakers that it still lost $178 million on the contract in 2020 due to card fraud and extra call center costs, but refused to provide CalMatters numbers for later years of the pandemic.

No one disputes that other states also struggled to keep up with the deluge, especially when it came to a first-of-its-kind emergency federal program for self-employed workers. States including neighboring Arizona and Nevada at times saw more unemployment claims than they had workers in the state. Despite being home to Silicon Valley, California was one of many states that struggled with decades-old technology, long processing delays and trouble training new workers while triaging a crisis.

Still, California’s system lagged states with much smaller unemployment budgets in several key ways. It is one of only three states that has failed to offer a direct deposit option for jobless benefits, setting the scene for chaos when EDD debit cards briefly became a scammer status symbol. It’s one of four states that has not changed its unemployment tax system since the 1980s, leaving California’s trust fund in the worst shape of any state’s when the pandemic hit — fueling a rapid descent into more than $19 billion of debt to the federal government.

When it comes to heading off fraud, California was in the minority of states that didn’t cross-check unemployment rolls with prisons, state audits found. The EDD was also slower than some other big states to implement new anti-fraud measures — and, once it did, took an approach so broad that state watchdogs say it trapped hundreds of thousands of real workers.

Those inside the EDD during the early days of the pandemic remember the shock as the whole picture came into focus. Job losses quickly blew past all projections for normal recessions, said Greg Williams, the agency’s former deputy director of Unemployment Insurance.

“The best way I can describe it,” Williams said, “is like going to a gunfight with a squirt gun.”

In the decades leading up to the pandemic, tragedy first propelled the EDD from an in-person, paper-based system to a network of call centers and online services that have repeatedly failed under pressure. The agency has lagged federal standards for timely payments and benefit decisions for many years since 2002. An effort to get ahead of online fraud in the 2010s was abandoned even as the risk of cyberattacks mounted across industries.

When the floodgates opened during the pandemic, California took months to tighten application processes, in some cases allowing scammers to more easily file claims than real workers. The EDD cut off benefits for more than 3 million people who didn’t send in requested documents while its offices were piled high with unopened mail. Still, the agency sent out 38 million letters with full Social Security Numbers years after it promised to stop the practice.

The saga set off a political firestorm, adding fuel to the unsuccessful COVID-era campaign to recall Gov. Gavin Newsom. It is still reverberating in a bitter business-versus-labor fight over President Joe Biden’s attempt to make former California labor chief Su his U.S. Secretary of Labor — a move that has drawn fierce partisan opposition. In July, Su, who continues to be the acting Labor Secretary, became the longest unconfirmed nominee whose own party controls the White House and the U.S. Senate.

CalMatters repeatedly attempted to contact Su and Newsom about the state’s pandemic unemployment breakdown, along with former EDD directors Hilliard and Patrick Henning Jr. None of them agreed to an on-the-record interview.

Nancy Farias, Director of the California Employment Development Department, in front of the agency’s offices in Sacramento on Oct. 26, 2023.

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Miguel Gutierrez Jr.

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CalMatters

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Today, EDD Director Nancy Farias maintains that “we’re no different than any other state.” Shifting federal guidelines for emergency unemployment programs complicated the agency’s response, she said. Once California did start using “fraud filters” to scan for suspicious claims in the fall of 2020, Farias told CalMatters that the EDD took other states’ advice and was aggressive, setting its filters “on the high end” of what the technology could do.

Ultimately, state reports have found that 5 million Californians saw unemployment payments delayed during the pandemic, and at least 1 million saw benefits improperly denied. A backlog of unprocessed claims peaked at around 1.6 million. Hundreds of thousands more workers were cut off by debit card freezes that Bank of America and the EDD blamed on each other.

“People did get caught up, and you know, to be fair, it took us a while,” Farias said of the state’s pandemic unemployment backlog. “But we did go through those claims.”

About 130,000 California workers are still fighting long unemployment appeals cases, and several class-action lawsuits are ongoing against the EDD and Bank of America. To this day, no one knows how much money the state lost to pandemic unemployment fraud; government and industry estimates range from around $20 billion to $32 billion. Some officials say it’s unlikely states will ever know how much was lost to fraud or “improper payments” — a broader government term for intentional fraud and other payment errors — let alone be able to claw back more than a fraction of missing funds.

In the absence of clear answers, the agency now planning a historic $1.2 billion overhaul of California’s job safety net has been left to grapple with big questions. How could the EDD have been so good at giving money to scammers, but so bad at getting funds to real workers? Why didn’t the state and contractors who were making money off of the flawed system do more to fix the problems, faster? And now, who will pay for the fallout?

“My whole life just went upside-down,” said Ramos, the San Diego construction worker, who told a state appeals judge he was forced to separate from family and leave the state for a cheaper rental in Tecate, Mexico, while waiting for unemployment benefits that never came. “They say money doesn’t buy happiness, but poverty sure as hell causes grief.”

The COVID unemployment backlog begins

On March 18, 2020, the day before Newsom first ordered Californians to stay home to slow the spread of the coronavirus, his then-Labor Secretary Su wrote an email to EDD Director Hilliard and her own deputies at the state’s higher-ranking Labor and Workforce Development Agency.

She wanted to know if the state’s unemployment system was ready for whatever came next.

“Do we need to do anything to shore it up at this time to prevent problems (delays or worse — system crash)?” Su asked. “I need you to work together to make sure we are ok.”

At first, the EDD was optimistic: “System is performing fantastic,” the agency’s IT director wrote the next day.

Less than 24 hours later, the scale started to sink in. Su and Hilliard exchanged messages on March 20 about the pros and cons of expediting unemployment approvals by waiving some eligibility requirements. Su wanted to know what keeping the checks in place would mean for processing times.

“How long would it take to get payments out,” Su asked, “and what would the backlog situation likely be?”

Hilliard answered: “It would be months if not well into next year…. Makes my (sic) shiver just thinking about it.”

A bigger challenge was still to come.

In May 2020, California rolled out the unprecedented federal Pandemic Unemployment Assistance program for self-employed workers, which the EDD later blamed for 95% of the state’s COVID-era fraud.

“No,” state websites instructed applicants for the new federal program. “You do not need to submit any documents to the EDD.”

This is where federal officials tasked with tracking what happened to trillions of dollars in nationwide COVID relief spending now say things went awry, both in California and elsewhere. There should have been middle ground — at least doing faster and more obvious checks with prison rolls, or sharing claim information between states — said Michael Horowitz, inspector general of the U.S. Department of Justice and chair of a federal Pandemic Response Accountability Committee.

“They set up a false choice between, ‘Get the money out the door as soon as you can send it out,’ versus, ‘Let’s spend a week matching data,’” Horowitz told CalMatters. “Not months, but a week matching data. And that’s the crux of the problem.”

The EDD maintains that the feds did not provide enough guidance at the time, “leaving states to fend for themselves,” Farias later wrote to a U.S. House committee.

Law enforcement agencies around the state announced busts involving EDD debit cards in the early months of the pandemic.

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Photo courtesy of Burbank Police Department

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What happened instead as jobless claims flooded in, state reports would later find, was a fateful split in how they were handled by the EDD. About 60% of claims — including many later suspected to be fraud — sailed through an automated application process, a state EDD task force appointed by Newsom found. The application for the emergency federal program for self-employed workers was particularly fast and easy to game, state audits and district attorneys found (sample successful applicant: “Poopy Britches”).

The other 40% of unemployment claims were flagged for manual review for a wide range of reasons, the task force found: typos, nicknames, language barriers, mismatched dates, hyphenated last names, middle initials instead of full middle names, addresses “too long to fit in the database” used by the EDD and so on.

The catch: It was sometimes easier for scammers to get through the automated process than it was for real people. That’s because real people are prone to human error, especially when typing on mobile phones or using outdated online systems.

More proficient scammers, by comparison, use software to copy precise stolen data and auto-file applications, often passing verification even when applications were checked against other government databases.

“Fraudulent applications using these sources will not get flagged,” EDD task force co-leader Jennifer Pahlka wrote in her recent book “Recoding America”. “The data entered on the application will exactly match the sources the EDD checks against, because it is usually a copy of precisely that data.”

Cashing in on EDD contracts

The fraud panic was just beginning, but the chaos that followed would prove to be a money-maker for EDD contractors. That is, until some of them got targeted by scammers, too.

Deloitte — which the state previously paid more than $152 million for projects including an EDD computer modernization effort that state reports found faltered during the pandemic — won another $118 million in no-bid emergency EDD call center and tech contracts after March 2020.

Deloitte spokesperson Karen Walsh said in a statement that the consulting firm has “successfully modernized dozens of state labor and workforce systems,” and that shifting regulations in the years before COVID “required changes” to its work with EDD that increased the scope, time and financial amount of its contracts. During the pandemic, Walsh said, Deloitte helped “deliver critical federal pandemic benefits to millions of California families.”

Things between the EDD and payment contractor Bank of America, meanwhile, were tense. The state and the bank sparred in the early days of the pandemic over how many benefit debit cards it was physically possible to print and provide customer service for.

“They are telling us their limit to issue new cards is 22,500 per night,” EDD Director Hilliard wrote on March 26, 2020. “Starting this Sunday we expect about 465,000 new claimants that will need a card.”

Su was adamant that the bank do more, replying, “We want NO DELAYS in payment of benefits.”

Weeks of emergency phone calls followed. At one point, a plan was hatched, then scrapped, for Bank of America to mail paper checks. State labor officials asked why the EDD didn’t have direct deposit, or online payments similar to Apple Pay’s digital cards. By May, a bank executive wrote that capacity had increased to up to 300,000 cards per day, and that more than 3.8 million cards were active. The two sides bickered about legal and financial agreements.

“This is painful,” one EDD administrator wrote in a June 2020 thread about contract terms.

Still, the mess was minting money for both parties.

Bank of America collected more than $492 million in EDD debit card fees from March 2020 to December 2022, state financial records provided to CalMatters show. Per the state’s debit card contract, the bank kicked back to the EDD nearly $187 million during that same time, which the EDD said was used to help “offset the cost” of administering the state’s multi-billion-dollar unemployment and disability programs.

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Bank of America unemployment debit card revenue records requested from the EDD by CalMatters

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Under fire for fraud and delays that would plague the system, Bank of America later told the state Senate Banking Committee that, despite the nine-figure revenue, the program was a money-loser, costing $927 million in expenses compared to $687 million in revenue from January 2011 through December 2020. The EDD, the bank argued, was at fault for the system’s security weaknesses.

“The vast majority of fraud occurs when criminals who are ineligible for benefits improperly enroll in the program by creating accounts using false identification or stolen identities,” Brian Putler, a Bank of America government relations executive, wrote to the committee. “The enrollment and cardholder verification processes are controlled by EDD, not by the Bank.”

In mid-2021, the bank went a step further, telling state lawmakers in public statements that it wanted out of its expiring EDD contract; California extended it anyway, in continuity. The following year, the bank was fined $225 million by federal financial regulators for what they called “botched disbursement” of state unemployment funds in California and elsewhere.

The finger-pointing was just starting. In the months that followed, a long-brewing battle would come to a head over whether the state was way too concerned, or not nearly concerned enough, about unemployment fraud.

“The irony is, we went into this pandemic having created a culture in places like EDD of extreme sensitivity to fraud, when in fact it wasn’t that big of a problem,” Pahlka told CalMatters. “And then created the conditions under which we made fraud a really, really big problem.”

A fraud tech boom — then bust

Five years before anyone had heard of COVID, Steve Sheehan discovered a time bomb lurking in the state’s unemployment system.

It was late 2014 when his team of fraud investigators at the EDD started rolling out fraud detection software from a local tech startup called Pondera Solutions.

At his desk at EDD headquarters lofted above the Capitol Mall, Sheehan recalls wading through up to 300 alerts per day for potential unemployment fraud. They flagged possible claims by ineligible prison inmates, on the state’s new unemployment debit cards and applications coming from overseas IP addresses in places like Israel, Uruguay and Pakistan.

“Were we aware that the fraud was out there? Yeah,” said Sheehan, a 30-year EDD veteran who retired in late 2018. “We didn’t put safeguards in place and made California an easier target, so people would come here to do their fraud.”

For a brief period in 2014 and 2015, the EDD used the experimental deal with Pondera as a centerpiece of its effort to finally modernize California’s antiquated unemployment system.

In June 2015, then-EDD Director Henning Jr. gathered with the nation’s top employment officials at a hotel in San Diego to unveil the tech breakthrough: “Fraud Detection As a Service” is what Pondera called the software purchased with a $1.75 million federal grant. Henning Jr., the son of former EDD Director Patrick Henning, was tapped to open the conference, themed “An Ocean of Innovation in Unemployment.”

Within three months, Pondera touted in a case study, the system had flagged $118 million in potential “high value” unemployment fraud cases — a small chunk of the roughly $6 billion California paid out at the time in annual benefits, but which investigators like Sheehan saw as the tip of the iceberg. He advocated to hire more investigators and sign a longer deal for the software, which worked by combing public and private databases to ferret out ineligible applicants and suspicious details, such as recurring addresses and phone numbers.

So it came as a shock, in 2016, when the EDD suddenly pulled the plug.

“It could have been huge,” Sheehan said. “The numbers that we were bringing to the director were in the hundreds of millions, but you need people to pull it out.”

The EDD denied a CalMatters request for documents related to the Pondera contract, stating that it had no such records, despite touting the deal at public events, in press statements and in reports to state lawmakers.

Today, the EDD tells CalMatters in a statement that, “costs were greater than benefits at that time, and the existing system was catching cases flagged by the filters.” It is “not reasonable,” the agency added, to blame states for not predicting a fraud crisis on the scale of the pandemic.

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CalMatters

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El Dorado County District Attorney Vern Pierson, who led a state insurance fraud working group at the time, remembers meeting with Henning Jr. to learn about the new fraud tool. It seemed like something that was working so well it could be applied to other state systems, Pierson recalled.

Wile the state attributes the reversal to a lack of renewed federal funding of around $2 million a year, EDD contracts requested by CalMatters show that, around this same time, the Deloitte EDD tech project more than tripled in budget, to $152 million.

“They blamed it on grant money, but the actual truth of it was that the amount of fraud they were detecting was much higher than they were expecting,” Pierson said. “It was just so overwhelming.”

Deja vu

The agency that would become the EDD was born in 1935. Its mission, like similar state agencies across the U.S., was to dole out federal funds to help stabilize a society still reeling from the Great Depression. By the 1950s, California politicians were already sounding alarms about unemployment fraud and lobbying for more money to investigate, according to a CalMatters review of agency records in the California State Archives.

When recessions struck, such as in the early 1980s, state hearings swung in the other direction, focusing more on the social ripple effects of unemployment: depression, suicide, child neglect.

So goes a cycle of dire situations for unemployed workers, fraud panic and social spending fights still playing out today.

But between then and now, California’s economy and the way the state pays out unemployment has transformed. What used to be a system of local field offices, paper applications and checks morphed into a mostly remote system of online applications, debit cards and call centers.

It was a shift driven not just by digitization, but by bloodshed.

In December 1993, former computer engineer Alan Winterbourne dropped off a box of documents at the Ventura County Star-Free Press detailing his seven-year search for work and unsuccessful EDD appeal. Then, dressed in a trench coat, he drove to the Oxnard EDD office and opened fire with a shotgun, killing four people. Police fatally shot him in the parking lot of another EDD office.

“We don’t get combat pay,” Mary Ramirez, a state employee who was in the Oxnard office, told the Los Angeles Times a few days later. “We need every single office separated, so that no one can get into the work areas.”

EDD offices have been closed for most walk-in unemployment help ever since. The lack of in-person support — which now mirrors other state agencies that have digitized services to save time and money — has ratcheted up frustration for those struggling to reach the agency.

The Great Recession that peaked from 2009 to 2011 previewed issues to come: up to 9 out of every 10 workers trying to call an EDD representative couldn’t get through, a 2011 state audit found. From 2002 to 2010, the audit added, the EDD had failed to meet federal standards for the speed at which it paid initial unemployment claims and made decisions about worker eligibility — failures the agency largely attributed to inconsistent staffing and funding in years when unemployment waned.

A section from the 2011 California State Auditor report on the Employment Development Department.

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CalMatters

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The breakdowns triggered a major effort to overhaul the EDD through the Deloitte modernization contract, the new Bank of America deal to start paying unemployment via debit cards and the Pondera fraud detection pilot.

Audits later found that, despite the expensive upgrades, employees continued using workarounds on patchy old tech systems that were not well integrated. The Bank of America debit cards, meanwhile, were rolled out without the security chips common in most consumer cards, which the bank told the state Senate Banking Committee was the EDD’s call.

Around the same time, in 2015, Catharine Baker, a former Republican Assemblymember from the East Bay, sent a letter to the EDD about reports that the agency was sending mail with full contact information and Social Security Numbers — sometimes to wrong addresses, sometimes visible through envelopes.

She and other members of a state privacy committee were baffled to hear that three years later, in 2018, the agency still hadn’t fixed the issue, despite withering public hearings and a $3 million budget allocation. Baker asked for a follow-up meeting with then-EDD Director Henning, Jr.

“I remember asking him, ‘If you had all the money that we could give you to do exactly what you want and need to do, how quickly could you do it? Could you do it in 12 months?’” Baker recalled. “He said it would still take five to six years.”

Michael Bernick, who directed the EDD during the dot-com bust of the early 2000s, said the agency always struggled for sustained attention and resources from lawmakers who tend to move on to other priorities when unemployment is low.

“Fraud was never taken seriously,” Bernick said. “Even the fraud that did exist in the early 2000s, you could never get anyone in the Legislature interested.”

The COVID con

Nothing compared to the feeding frenzy once the federal government unleashed $5 trillion in pandemic aid.

In California, Pierson remembers that the initial reports about unemployment fraud were so brazen that some officials wondered if hackers had tapped directly into the EDD’s 1980s-era computer system. The reality, audits and investigations have found, was a more chaotic web of fraud carried out simultaneously by low-level scammers, prison inmates and larger organized criminal groups, plus a few cases of people with connections to the EDD or its contractors.

The most severe national security threats came from hostile nation-state hackers, including the Chinese cyberwar group APT41. By July 2020, the FBI was also warning about so-called “social engineering” schemes, where groups in Nigeria and elsewhere used psychological tactics to try to extract personal information from victims. Amateur scammers everywhere were buying stolen Social Security Numbers on the dark web and social media.

The agency’s best estimates for COVID-era fraud have boomeranged, up to around $30 billion in 2021, then back down to $20 billion. One outside report by government fraud analysts at LexisNexis pegged the figure at more like $32 billion. Comparing how California fared to other states when adjusting for population is difficult, since federal watch dogs have not even published estimates for many states.

As of June 2023, the EDD said in a statement that it had seized or recovered just under $1.9 billion in suspected fraudulently-obtained funds.

“The thing is, it’s every type of fraud under the sun,” said Blake Hall, CEO of identity verification company ID.me, which was hired by the EDD and many other states amid the fraud wave. “You could pinky swear and say that you’re a Lyft driver, and you start collecting, you know, $600-plus a week.”

The EDD and the U.S. Labor Department have clashed over what exactly the agency should have been screening in the early months of the pandemic, internal communications released to CalMatters by the California Labor and Workforce Development Agency show.

In late April 2020, then-EDD Director Hilliard wrote to federal officials about the agency’s decision to suspend its usual requirement that unemployment recipients manually confirm every two weeks that they are still looking for a job.

“Because our benefits system has slowed significantly due to the strain of so many claims and certifications, it has threatened the ability of people to apply for benefits and our ability to pay benefits,” Hilliard wrote, adding that the agency viewed the move to auto-certify approved claims as “consistent with the emergency flexibility that DOL has prescribed for states.”

The feds disagreed: “This is something we expect to be addressed immediately,” a Labor Department division chief responded, calling the waiver a “substantial compliance issue.”

Other states quickly realized there was a problem with the new federal program for self-employed workers. In mid-May, emails show that officials in the state of Washington sent an alert to peers including the EDD saying that they were pausing payments for two days after detecting claims that appeared to use data stolen in a massive 2017 breach at Equifax.

Still, fraud continued to snowball, and California was slow to react.

The agency waited until July 2020 to “make any substantive changes to its fraud detection practices,” the California state auditor found. In late August 2020, the EDD was still processing 120,000 new applications per day, “strongly suggesting automated bulk submissions,” Pahlka wrote. Su has emphasized in congressional hearings that the EDD noticed the spike in August and flagged the practice of automatically backdating claims to federal regulators.

Still, between March and mid-October 2020, the EDD sent roughly 38 million pieces of mail with full Social Security numbers, the state auditor estimated, despite promising to end the practice years earlier.

A section from a letter sent from former California State Auditor Elaine Howle to state legislative leaders in 2020.

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CalMatters

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“There is no sugar coating the reality: California did not have sufficient security measures in place to prevent this level of fraud,” Su said in 2021 — a statement that would later be used against her in the contentious ongoing debate over whether to confirm her as the nation’s top labor official.

As fraud panic escalated, the number of real workers stuck in review or denied benefits also grew — even though Pahlka’s task force found that as few as 0.2% of applicants whose identities were manually verified turned out to be fraud. In 2022, the California Legislative Analyst’s Office wrote that the EDD’s “actions suggest getting payments to workers is not a top priority,” and that the agency “mischaracterized figures… showing far fewer denials” in reports to the Legislature.

Photos of mail returned to the Employment Development Department included in a letter sent from former California State Auditor Elaine Howle to state legislative leaders in 2020.

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CalMatters

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One major concern: The EDD denied benefits to 3.4 million workers for not mailing in required documents, even when photos from the time show stacks of unopened mail.

“Each EDD field office had an estimated 450 pounds of unopened mail,” the Legislative Analyst’s office summarized, “and had no system for processing unopened mail.”

Many pandemic claims were approved by the automated system up front, only to be deemed fraud later when federal officials ordered more scrutiny. Some fraud experts criticize the “pay and chase” approach that EDD and other states took. Instead, they question why the EDD, located in one of the tech capitals of the world, waited so long to act to prevent fraud.

California took six months to start using ID.me technology to verify identities through photos and video calls. In October, 2020, amid mass freezes of Bank of America EDD debit cards, the EDD was forced to stop accepting new claims for two weeks to deal with its backlog. In May 2021, the EDD signed a $3.5 million contract for the updated fraud detection software from Pondera — the same promising pilot it had jettisoned five years earlier. After the EDD did act, state watch dogs found that some of the technology went too far, netting hundreds of thousands of real workers in fraud crackdowns.

Some former EDD officials say “Monday morning quarter-backing” cannot account for just how unprecedented the crisis was.

Others worry that the wrong lessons will be learned, and generalized fraud fears will be prioritized over issues for real workers.

And then there are increasingly hard-to-ignore questions, including what California should do about its $19 billion in outstanding unemployment debt to the federal government. Or if any states will ever know how much was lost to fraud, and what happened to workers caught up in the mess.

“If we don’t understand how the money was lost,” said Hall of ID.me, “then history is doomed to repeat itself.”

This story was originally published by Boyle Heights Beat on Feb. 23, 2026.

Self Help Graphics & Art has long been a creative home for Chicano artists and families in East Los Angeles. Now, a new documentary is inviting the community to help tell its story.

Chicano Gráfica, a documentary about Self Help Graphics & Art, explores how a small group of East Los Angeles artists altered the art world by embracing and celebrating their identity as Chicanos.

To chronicle this history, filmmakers Gloria Westcott and Grace Amemiya are asking community members to share memorabilia from the 1970s and 1990s. This can include VHS tapes, photography, invitations, visual art, postcards, greeting cards, T-shirts, CDs and records, according to an open community call from Self Help Graphics.

A gathering for the memorabilia collection will be held March 7 at Avenue 50 Studio in Highland Park. All shared items will be returned.

The film, according to its website, “showcases the legacy of Self Help from its roots in the East Los Angeles barrio to its role as an international force that exported the Chicano art aesthetic and iconography in printmaking.”

A key player of the Chicano movement of the 1970s, Self Help Graphics & Art was founded in the East LA garage of Sister Karen Boccalero, a Franciscan nun and printmaker. It started with a small group of young Latino artists who used their medium to spread social justice messages.

From the onset, these artists involved members of the community in the process of making art and organizing programs, such as a 1972 Day of the Dead event considered to be the first public commemoration in the United States of a tradition rooted in Mexico’s indigenous origins.

This is the latest community call for personal memorabilia. Previous callouts have been held at the East Los Angeles County Library and Avenue 50 Studio, according to the Chicano Gráfica website.

The violence that erupted in Mexico after the death of a powerful drug lord has left many questioning whether the country will be able to co-host the World Cup in just over three months.

FIFA President Gianni Infantino thinks it can.

"Of course, we are monitoring the situation in Mexico these days, but I want to say from the outset that we have complete confidence in Mexico, in its president, Claudia Sheinbaum, and in the authorities, and we are convinced that everything will go as smoothly as possible," Infantino said late Tuesday in a press conference in Colombia.

"Mexico is a great country, like in every country in the world, things happen; we don't live on the moon or another planet," Infantino added. "That's why we have governments, police, and authorities who will ensure order and security."

The Mexican army killed Nemesio Rubén Oseguera Cervantes, "El Mencho," who led the Jalisco New Generation Cartel, on Sunday, sparking several days of violence. Cartel members burned cars and blocked roads in nearly a dozen Mexican states and authorities report that at least 70 people have died.

Four high-level soccer matches from the local leagues were postponed last Sunday, including one in the central city of Queretaro, where Mexico defeated Iceland 4-0 late Wednesday in a friendly match.

Before the match, a minute of silence was held in the Corregidora stadium in honor of the soldiers who died during the operation to capture Oseguera.

Thirteen World Cup matches are scheduled to be held in Mexico, including the opening game in Mexico City on June 11 between the co-host and South Africa. Guadalajara, the central hub for the Jalisco cartel, is scheduled to host four.

Colombia is set to play one game in Mexico City and one in Guadalajara.

"Our first two matches are in Mexico, but we know they will overcome this and move forward," said Ramón Jesurún, the president of the Colombian Soccer Federation. "I have absolute and total confidence in my geopolitical thinking that this is an issue Mexico will overcome, and overcome very quickly."

Other nations have expressed more concern. The Portuguese soccer federation said Tuesday that it was closely monitoring developments ahead of a planned friendly against Mexico in March. Jamaica is set to play New Caledonia in Guadalajara on March 26 in an intercontinental playoff semifinal, with the winner advancing to face Congo for a World Cup spot.

"The games are at the end of March, so we still have another month to see what happens; but it is making me very nervous, to be honest," said Michael Ricketts, the president of the Jamaican Soccer Federation. "We will be listening out for CONCACAF and FIFA to give us instructions (on) whether they are playing the games or whether they are immediately looking for other options."

Another Mexican city, Monterrey, will host a playoff where Bolivia plays Suriname and the winner faces Iraq for a spot in the tournament.

On Monday, Sheinbaum said there is "every guarantee" that the World Cup matches in Guadalajara will be played as planned and added that there was "no risk."

"We are in regular contact with the presidency and the authorities in Mexico and we are monitoring the situation," Infantino said. "The World Cup is going to be an incredible celebration".
Copyright 2026 NPR

This story was originally published by CalMatters. Sign up for their newsletters.

One windy morning in December 2024, teachers at Orange Vista High School rushed students into a line that stretched to the street. Southern California Edison had cut the power for parts of Riverside County to prevent its equipment from sparking a fire.

Lessons ended. Classrooms went dark. And anxious parents in the Inland Empire city of Perris waited impatiently to greet their children. A month later, the school lost power again, days after the Eaton and Palisades fires to the northwest destroyed entire Los Angeles County neighborhoods.

Orange Vista High was among at least five Riverside County school districts that reported closures during winter high winds in 2024 and 2025. Local school officials say the disruptions hit harder in economically disadvantaged districts, where families rely on critical services such as free meals and child care.

Since 2012, the California Public Utilities Commission has authorized investor-owned utilities such as Edison to cut power during severe weather events to lower the risk of wildfires. The commission reviews every outage. Utilities may pay penalties – as Edison did in this case – if they don’t notify ratepayers properly, or meet other standards.

Edison says shutoffs are necessary to save lives and protect communities. “Our mission really is to keep the power on when it is safe to do so,” said spokesperson Jeff Monford.

After the power shutoffs, the Val Verde Unified School District redirected $500,000 from the school facilities budget to buy battery storage units that could help Orange Vista High keep the lights on during future outages. But Garrick Owen, the district’s assistant superintendent, said the money would be better spent fixing the grid itself.

“If I had a magic wand, would I spend all the money to harden our schools against power outages, or would I spend it to harden the actual infrastructure of the power lines to not have the power outages?” he said.

As climate change drives more extreme weather and more blackouts across California, the cost of adaptation is a growing bill schools say they can't pay alone.

Low-income students lose out on services 

Because state funding to schools is based in part on student attendance, emergency events like power outages bring a financial risk. When a school closes for the day, or when attendance drops, that cuts into attendance numbers. Schools then can file a waiver request with the state Department of Education to protect their funding.

That’s what happened at public schools throughout Riverside County during the 2024-25 school year, when smoke from nearby fires and high winds created problems.

Eight school districts confirmed to CalMatters that they filed waiver requests with the state Department of Education in December 2024 and January 2025. Three districts – Nuview Union, Perris Elementary and Perris Union High – reported closures for at least one day each. Three more – Banning Unified, Beaumont Unified and Jurupa Unified – reported material decreases in attendance on high wind days. Two districts, San Jacinto Unified and Val Verde, reported both closures and low attendance days.

According to the Val Verde district, three schools there lost a total of 13 days of instruction because of the wind events. That’s more than other Riverside County schools that confirmed filing waiver requests to CalMatters. Val Verde schools also reported lower attendance in September 2024, when smoke from the Bridge, Line and Airport fires spread to the region.

After one chaotic day in December, Orange Vista High principal LaKrecia Graham said school administrators bought floodlights to help keep classes in session in case the power went out again. But when the next outage happened, so many worried parents picked up their children that the district decided to close anyway.

“It disrupts a lot of things and it puts people in a panic that I don't think is necessary,” Graham said. “And that's what's gonna keep happening.”

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LaKrecia Graham, principal of Orange Vista High School, in Perris, on Nov. 18, 2025.

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The lack of power isn’t just an inconvenience. It can pose a safety risk for students, said Catalina Chrest, principal of Skyview Elementary School, also in Perris. Children may hurt themselves navigating dark rooms, or they can lose access to essential needs like water, heaters and air conditioning.

Schools serve as community hubs. For low-income families and students with disabilities, losing access to them means more than a missed day of learning — it means losing child supervision, free meals and critical support services.

The meal they eat at school “might be one of their most nutritious meals of the day,” Chrest said.

In the Perris Elementary School District, more than 90% of students are low-income. At Skyview Academy and Clearwater Elementary School, wind whistling through buildings made classrooms frigid. Bathrooms went completely dark. Parents told school staff that their food was spoiling at home.

The outages “impact our families greater than families in a more affluent neighborhood,” said Perris Elementary School District superintendent Bruce Bivins.

Utilities weigh harms and benefits

When investor-owned utilities decide to turn the power off, the California Public Utilities Commission requires that they balance the potential harms against the benefits. Utilities regulated by the CPUC also must give notice before shutoffs and offer resources to make the outage easier on residents and schools.

In Riverside County, school officials and teachers said delayed notice during the winter wind events made it difficult to prepare for the shutoffs. At Orange Vista High, Graham said the school received notice of a potential outage at a certain time, but it came earlier, so staff was unprepared.

Paula Ford, assistant superintendent of business services at Jurupa Unified School District, said “actually, we would receive a notice that the power was down maybe an hour after the power was already down.”

After the January shutoffs that darkened Riverside County schools, the CPUC fined Southern California Edison $7.8 million for violating notification requirements. Terrie Prosper, a CPUC spokesperson, says the commission is still investigating Edison’s handling of the December shutoffs.

She added the utilities commission is closely monitoring Edison’s work to reduce power shutoffs.

“We understand that PSPS events can be disruptive for schools,” she said. “However, these actions are taken out of serious wildfire concerns. California has experienced devastating wildfires in recent years that have destroyed communities, closed schools for extended periods, and placed lives at risk.”

Clearwater Elementary in Perris, on Nov. 18, 2025.

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Southern California Edison did not comment on the penalty.

Edison spokesperson Monford said that, when possible, notifications for public safety power shutoffs take place three days in advance.

“In some instances, we are unable to send advanced notifications due to emergent weather,” Monford said. “This was especially the case last winter, when we had extraordinarily new wind events.”

Monford added the utility offers assistance to help schools become more resilient to the power outages. But not all schools benefit from the help.

The utility lends power generators to schools most affected by the power outages. He added the utility hopes to expand the program to lend battery storage systems. Edison also invited some districts, including the Jurupa Unified School District and San Jacinto School District, to daily emergency coordination calls, Monford said.

Critics said the outages may end up causing more harm than the events they’re responding to.

“They put a lot of time and effort and money, which I do not begrudge at all, into the analytics of fire risk to calculate the risk of a wildfire actually starting in certain weather conditions,” said Melissa Kasnitz, legal director for the Center for Accessible Technology. “What they have not done is put any fraction of effort into evaluating the risk of what happens when you turn people's power off.”

In response, Edison directed CalMatters to tools it uses to analyze shutoff risks, and to reports the utility has filed with regulators after incidents.

Power outages bring a financial toll 

School administrators say it’s unfair for districts to carry the financial burden of a problem they didn’t create. They also have to contend with a state education system that financially punishes districts for low attendance that results from emergencies out of their control.

Districts with fewer resources like Perris Elementary School District can’t afford generators and have to prioritize other needs.

Bivins said the district looked into backup power but couldn’t afford generators or battery storage. The district is smaller – serving only elementary students – so it obtains less funding than Val Verde Unified or other unified districts. Schools serving more low-income students also tend to see lower attendance rates, he said, meaning even less money coming in.

With so many urgent needs competing for limited dollars, a generator that might only be used a few times a year doesn’t make the cut.

“That could be better security on our campuses, more modernized facilities, better access to technology, or other things they can actually utilize right now versus the preparation for the possible one day this year (the power goes out),” Bivins said.

Student teacher Mayela Covarrubias works with first-grade students.

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An emergency generator on loan from Southern California Edison at Peralta Elementary in Riverside, on Nov. 19, 2025.

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But even schools that can afford generators face hidden costs from the outages.

In nearby Jurupa Valley, Peralta Elementary School was able to keep its doors open, the lights on and the heating and cooling systems running.

The Jurupa Unified School District spent more than $364,000 on two generators – each capable of powering an elementary school – and is investing in infrastructure upgrades to make deploying them easier, Ford said.

Because Peralta Elementary is in a high fire risk area surrounded by brush, Southern California Edison also loaned the school another generator through its pilot program. So far this year, the school hasn’t needed to use it.

Still, the outages take a financial toll. Even if schools are open, some parents keep children home – costing the district attendance-based funding.

“Because we stayed open … we're actually impacted more heavily than schools that close,” Ford said.

To obtain a waiver from the state to protect funding from an emergency, schools have to submit paperwork signed by the school board and county superintendent explaining what happened, and certify they have a plan to keep students learning during the disruption. But the process is uncertain: Schools don't know how much funding they'll keep until the state reviews the waiver request and runs its own numbers. Ford said that more leniency on the conditions necessary to qualify for a waiver could help schools during emergency events.

Bivins, the Perris Elementary Unified superintendent, said the state should fund schools based on enrollment, not attendance, so that emergencies don’t threaten budgets.

Michelle Hatfield, a spokesperson for the state Department of Education, said any changes to rules for how schools handle planned outages – and any proposals to fund schools by enrollment rather than by attendance – would require legislation.

Even districts investing in backup power say they can't fully close the gap on their own.

At Orange Vista High School, newly installed battery storage units will help keep the lights on during the next planned outage. It’s all the Val Verde Unified District could do, said Owen, the assistant superintendent.

But the battery storage systems don’t really solve the broader problem. If a blackout happens at multiple schools over multiple days, “we don't have a plan for that,” he said.

Equipping every school in the district with generators would probably cost millions. "It's one of those numbers I don't need to know, because there's not gonna be that funding," Owen said.

Natasha Uzcátegui-Liggett contributed reporting.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

All you have to do is grab a drink with a friend, eavesdrop at a coffee shop, or open your eyes to see that entertainment professionals in L.A. are hurting these days. Last year there was a 16% decline in filming in the region, according to Film LA, and between 2022 and 2024, L.A. County is estimated to have lost more than 42,000 motion picture-related jobs.

I know this pain, personally. I was a TV writer for years, but my last writer’s room job was in 2021. Luckily, I was able to pivot to copywriting as I continue to work on my own projects, but I do wonder what the rest of my colleagues are up to. Where have the thousands of highly skilled entertainment professionals gone?

Turns out, school.

Specifically, to become therapists.

I first noticed this trend over a decade ago in 2013. I had just moved back to L.A. from New York and I started seeing a new therapist. Over the course of our sessions, she revealed to me that she used to be an actor — and quite a successful one. She was a co-star on a hit sitcom for nine seasons.

But despite the consistent work, she wasn’t fulfilled. She said acting was mostly sitting around in a trailer waiting and she craved more intellectual stimulation. So she went back to school and became a therapist, the irony being that she never fully escaped Hollywood. Today, as an L.A. based therapist, she spends most of her days listening to frustrated actors and writers complain about the biz. Ahh, the circle of life!

Not only was my therapist a former actor, I started to notice more and more of my peers and friends making the switch. I met Alan, 40, who prefers to be anonymous because he doesn’t want his patients knowing about his private life, at a co-working space. We both belonged to a charming apartment-turned-writer’s haven in Silver Lake.

At the time, Alan was a busy film producer, plugging away at his own feature script on the side. But despite having a shiny career working with hip actors and directors, he wasn’t happy.

He remembers going to schmoozy parties where everyone would name drop and brag about what they were working on.

“I had all those fancy things to drop, too, but it meant nothing, it didn’t make me feel any better about myself,” he said. “If I can’t even talk about what I’m up to without feeling sad, that’s kind of a problem.”

Alan started to realize maybe producing wasn’t his destiny. He was going through the motions. Things started to fall into place when he started therapy.

“Therapy made me feel more like myself. I just felt a little bit more enlivened… the rest of the week kind of deadened me,” he said.

He loved how real and deep the conversations were and became intrigued by the idea of becoming a therapist himself. He started taking a few psychology classes and was instantly hooked. Now, he has a thriving private practice and hasn’t looked back.

Primal emotions

Julie Mond is a therapist and an actor. Unlike Alan, Mond still loves acting, it’s not something she grew out of. She just needed a more stable career as she continued to pursue her passion. Becoming a therapist has actually liberated her to focus on the kind of acting she actually wants to do. Because she’s financially stable she can now pick and choose the kinds of projects that feel worth her time.

When I ask Mond why so many entertainment professionals become therapists she reflects on a couple of things. She said performers and directors crave “connecting authentically, being present moment-to-moment, being real and honest. We’re digging for these primal emotions.” All things you have to do as a therapist.

She also has another theory: “A lot of artists go to therapy. Many of us who become therapists have been in therapy and it's changed our lives. I think people in L.A. have been on a healing journey and want to give back.”

Charley Lang, who teaches at Antioch University.

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Even though I'm personally meeting more people who are becoming therapists, I wondered if it was an actual trend or just a coincidence.

So I talked with psychology professor Charley Lang at Antioch University to get his take. Lang, who's been teaching psychology for 30 years, said that in his graduate classes, at least 50% of the students come from entertainment careers.

When I asked why they make the switch, he’s blunt: stability.

That’s why Lang himself became a therapist decades ago.

Lang was an actor on Broadway, but eventually hit a wall.

“I had a nice career as an actor, I essentially got to do everything I wanted to do," he said. "But then I was in my late 30s and I was like, ‘Do I always want to be praying for another guest spot on a sitcom in order to feel secure and OK?’”

Does he have any regrets or miss acting? On the contrary, he tells a story:

“I had become a therapist and stopped acting and a friend of mine was directing a play at the Ahmanson and he was like, ‘Please do this play.’ And I was able to figure it out and I was just dipping my toe back in to see what it was like and it was a six-week run of the play. And at the end of the first week I remember standing in the wings waiting to make my entrance and thinking, ‘Oh my god haven’t we already told this freaking story?’ It was like Groundhog Day. It was the same story over and over.”

As a therapist, he said he loves that every day is different.

The point isn’t that working in entertainment is bad and therapy is perfect. To me, the takeaway is that it’s never too late to make a change. That just because something used to work for you doesn’t mean you’re committed to doing it forever.

Or in Mond's case, maybe there is a way to continue doing what you love, but more sustainably.

In today’s fragile and volatile job market, it’s nice to know that you can always begin again. Just because a job or career ends, doesn’t mean your life is over.

If, in the future, I’m too fried, burnt out, or tired of the rollercoaster of being a writer, maybe I’ll embark on a second career.

But until then, I’m still riding the dragon.