CA Candidate Drops Bombshell On Estimated $250 Billion Under Gavin Newsom [WATCH]

Herb Morgan, a chief investment officer running for California State Controller, said fraud across state programs has reached staggering levels, estimating losses at roughly $250 billion and describing the problem as widespread across multiple agencies and benefit systems.

Morgan made the remarks during an exchange with One America News reporter Riley Lewis, who questioned him about the scope of fraud in California and the role of the state controller in protecting taxpayer dollars.

“An expert in this. You’re running for State Controller, which is our last line of defense between fraud and the taxpayer dollars,” Lewis said.

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“So let’s look at California, how widespread is this problem?”

Morgan responded by contrasting California with other states, saying the scale of the problem reflects the state’s size and economic footprint.

“If you think of Minnesota as the freshman team, we’re division one college,” Morgan said.

“Okay, so we have obviously a much larger economy, much larger population, much wealthier state.”

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He said the dollar figures involved go far beyond isolated incidents and span several major government programs.

“I estimate that the number is around 250 billion, and that’s excluding some categories, like I haven’t even touched the pension spiking issue and some of the issues around that,” Morgan said.

“It’s massive.”

Morgan pointed to fraud uncovered during the COVID-19 pandemic as one of the clearest examples, citing the state’s unemployment system.

“We know 55 billion from employment development from, you know, during the pandemic, we sent out unemployment checks to prisoners and gang members,” he said.

“We literally sent them to the prisons for people.”

He also cited medical and health care programs as major sources of improper payments.

“Medical our you know, Medicaid, medical, our system there,” Morgan said.

“That number over the last five years is approaching, in my estimate, close to 100 billion.”

Morgan said homelessness-related spending has also been affected by fraud, along with multiple state assistance programs.

“We know about 26 billion in the homeless,” he said.

“We’ve got problems with Cal Fresh. We’ve got problems with Cal Works, I HHS, which is our home health care system.”

He described the situation as systemic rather than limited to one department or agency.

“It is absolutely rampant,” Morgan said.

WATCH:

Morgan is seeking the position of California State Controller, an office responsible for auditing state finances, overseeing disbursements, and acting as a check on waste, fraud, and abuse of public funds.

His comments come as concerns about government spending and accountability remain a central issue in California politics, particularly following large-scale emergency programs launched during the pandemic.

Lewis noted that the controller’s office serves as a critical safeguard for taxpayers, as Morgan argued that the volume of fraud reflects failures in oversight that must be addressed.

Morgan said his estimates do not include certain categories of financial abuse, including pension-related issues, which he indicated could further increase the overall total if fully examined.