Failing up

There is a common phrase called failing up and a good example is the situation with the California unemployment scandal. California's pandemic unemployment fraud, costing tens of billions, was massive, involving organized crime, inmates, and identity theft, exploiting weak EDD oversight for huge payouts, leading to significant state losses and ongoing recovery efforts by task forces. An estimated 70% of the $40 billion in defrauded money left California, reaching transnational criminal groups in almost every country on the globe. During the massive COVID-era fraud at California's Employment Development Department (EDD), Julie Su was the Labor Secretary overseeing it, while Rita Saenz served as the EDD Director, both facing scrutiny for the multi-billion dollar losses, with Saenz resigning in early 2022 and Su later moving to a federal role. Acting Labor Secretary, the federal DOL under her watch seemed to excuse California's failures by allowing potential debt forgiveness for the state, sparking intense backlash and debates over accountability for the fraud while she served the Biden administration.