Newsom Urges Investigation into Fraud in California
California’s Democratic Governor Gavin Newsom has called on President Donald Trump and his administration to investigate issues of fraud and wasteful spending in the state.
Concerns about taxpayer mismanagement have intensified since late December. This followed a video by independent journalist Nick Shirley on YouTube, which explored allegations of childcare fraud in Minnesota. In an exclusive chat with MS Now’s Jacob Soboroff, Newsom discussed his administration’s move to freeze federal childcare funding, mentioning that press secretary Caroline Leavitt hinted at a potential fraud investigation in California.
“Sure, let’s get to it. Parenting scams? It’s hard to believe anyone would support fraud. So if he has any valuable insights or information, we’re open to collaborating,” Newsom remarked.
“Fraud is unacceptable. Waste and abuse are not something we can endure,” he added. “We can’t overlook the misuse of funds related to our National Guard and the millions in taxpayer subsidies squandered due to this president’s illegal activities. I fully agree with you on that, and Caroline Leavitt too.”
The U.S. Department of Health and Human Services (HHS) announced a funding freeze on December 30 for all federal childcare payments to Minnesota. This decision could also extend to other states led by Democrats, like California, New York, Illinois, and Colorado. The funding suspension is anticipated to impact around $7 billion in the Temporary Assistance for Needy Families program, $2.4 billion in the Child Care Development Fund, and about $870 million in social welfare subsidies.
On Tuesday, Trump indicated on Truth Social that a fraud investigation into California, run by Democrats, “has begun.”
“California is more corrupt than Minnesota under Gov. Gavin Newcomb, if that’s even possible??? The California corruption investigation has started. Appreciate you bringing this to our attention!” Trump stated.
In response, Newsom’s office released a statement to the Daily Caller News Foundation.
“Hahahaha. Donald Trump is a compulsive liar whose grip on reality vanished years ago,” the statement said. “This is straightforward. He spends his days sharing nonsense from his deflated little mind, while Fox News treats it like gospel.”
“Meanwhile, in the real world where responsible leadership exists, Gavin Newsom is taking action. Since he took office, he has prevented over $125 billion in fraud, arrested those exploiting taxpayers, and protected the public from the very fraudsters Trump seems to excuse and honor.” Newsom’s office concluded, “Gavin Newsom is managing the state. Donald Trump is just making noise.”
The statement also pointed to past accusations related to the state. Issues regarding California’s spending have lingered for years amid ongoing problems like homelessness, crime, and incomplete projects.
California has faced ongoing allegations of waste and fraud, including over $32.6 billion in Pandemic Unemployment Assistance benefits, around $24 billion spent on homelessness efforts since 2019, and approximately $16 billion on unfinished high-speed rail projects.
Compounding these issues, California has been grappling with a budget deficit for years. The state’s nonpartisan Legislative Analysis Service noted in November that the projected deficit for 2026-27 had decreased by about $5 billion.
Last year’s fiscal assessment indicated the state would encounter a challenge of around $13 billion in the 2026-2027 cycle. However, the new figures show a significant drop. Over the previous three budget periods, California has faced substantial deficits: reaching $27 billion in 2023-2024, $55 billion in 2024-2025, and $15 billion in 2025-2026.
Despite Trump’s announcement of an investigation, details about how his administration plans to proceed remain uncertain.
