Rep. Kevin Kiley to Newsmax: California Fraud Scale Is Unknown

Rep. Kevin Kiley, R-Calif., warned on Wednesday that California's public-funds fraud problem may be far larger than investigators have documented.

He told Newsmax that lawmakers still "just don't know how vast the scale of the problem is" even as major cases and waste claims continue to pile up.

Kiley said that California shows repeated warning signs of fraud and misuse of public money, but that the full scope remains unclear, as House lawmakers questioned independent content creator Nick Shirley during a House Judiciary Committee hearing.

Kiley, a member of the committee, discussed the hearing on Newsmax's "The Record With Greta Van Susteren," pointing to what he described as a pattern: large sums spent, limited measurable results, and allegations that investigators and the public are still seeing only part of the picture.

In the interview, Kiley praised Shirley's testimony and said the witness offered on-the-ground examples from Minnesota that helped lawmakers and the public grasp how alleged fraud can play out beyond abstract figures.

Kiley said that Shirley provided vivid details about day care operations that claimed millions of dollars despite not existing or failing basic standards.

Van Susteren asked whether similar conditions exist in California.

Kiley responded that California's record already includes major cases and what he described as unexplained spending.

He cited "$32 billion" in unemployment fraud during the COVID-19 years and said the total dwarfed other states.

He also pointed to "1.2 million" fraudulent community college applications, which he said represented about a third of applications and involved financial aid fraud.

Kiley also listed large spending totals that he said have produced little or no tangible outcome, describing them as examples of public funds that remain "totally unaccounted for."

He cited "$18 billion" spent on California's high-speed rail project and said that there's been no track laid; "$24 billion spent to fight homelessness," with homelessness worsened, and "$650 million spent on a 911 system," and said the project was scrapped.

Kiley said he raised questions about those spending examples with Shirley at the hearing and framed the issue as a basic accountability problem.

"This isn't brain surgery," Kiley said Shirley argued.

Kiley said the point was that the public should be able to connect spending to results, and that repeated failures to do so can signal waste or fraud.

Kiley said lawmakers have taken steps that he described as accountability measures.

"Well, the good news is we actually have brought some accountability to the massive fraud in California."

"So we've cut off the high-speed rail funding. In fact, a bill we're going to pass this week is going to claw back some of that funding," he said.

He said the Education Department instituted new identity verification for community college applications, and that federal indictments have followed in connection with homelessness-related fraud.

Still, Kiley said the underlying problem is that "we just don't know how vast the scale of the problem is" in California, adding that he expects more developments in investigations tied to homelessness funds.

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