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Julie Su, who oversaw California unemployment agency amid fraud wave, tapped as Labor head


President Biden on Tuesday nominated Julie Su as his next Labor secretary, setting up the former California labor chief to become the first Asian American to head a cabinet department during his presidency.

Su, who has been deputy US Labor secretary since 2021, was confirmed by the Senate for her current post after a party-line vote of 50 to 47, and could face another difficult confirmation battle. Republicans have expressed concern about her role as supervisor of the California unemployment insurance agency during the COVID-19 pandemic, as the state paid out billions in fraudulent claims.

The Stanford and Harvard-educated daughter of Chinese immigrants, Su also worked as a civil rights attorney for 17 years. She defended Thai garment workers trafficked into the US, according to a White House statement. She earned a 2001 grant from the MacArthur Foundation for her legal work seeking better working conditions for immigrants.

Prior to joining Biden’s Labor Department, Su served as Secretary of California’s Labor and Workforce Development Agency for seven years. In that role, she oversaw the state’s troubled employment development department, which is responsible for handing out unemployment benefits but struggled to manage a backlog of claims and fight widespread fraud during the pandemic.

The firm received at least 26.4 million claims and paid $180 billion in benefits from the start of the shutdown through last spring, and about $30 billion of those payments went to scammers, according to government officials. The state had recovered at least $1.1 billion of that by June, most of which would be turned over to the federal government.

Su’s supporters say she inherited a broken, understaffed unemployment system that was unwilling to handle the onslaught of COVID-related claims.

Her critics say she misled the agency.

Representative Kevin Kiley (R-Rocklin), a former member of the California Assembly who ran against Gavin Newsom for governor, called Su’s nomination a “clear example of failure.”

“It’s appalling that President Biden would even consider Julie Su, who oversaw this whole mess, as his next Labor secretary,” Kiley said. “I can’t think of anyone less qualified for that position given what happened to California on her watch.”

Olivia Dalton, deputy White House press secretary, responded to the criticism, telling reporters aboard Air Force One on Tuesday that Su had helped California process jobless claims despite “fragile, outdated technology.”

During the pandemic, federal and state officials quickly distributed trillions in relief funds to help Americans cope with the biggest economic crisis since the Great Depression. Due to the speed with which payments were made, some claims were never verified, leading to widespread fraud Report of the US Government Accountability Office released in February found.

The California EDD’s “improper payment” rate during the first six months of the pandemic was 36.6%, according to an audit report from the US Labor Department from Sept. It is unclear what part of that was fraud or payments with an incorrect amount. Some scammers posed as prisoners, or in one case as Senator Dianne Feinstein, to receive COVID relief money.

If confirmed, Su, 51, will replace Secretary of Labor Marty Walsh at the head of a department that has been central to Biden’s domestic agenda. Walsh, the former mayor of Boston, plans to leave administration in March to lead the National Hockey League Players’ Assn.

Su was a long-time labor officer and was considered the front-runner for the post since Walsh announced his departure. Unions including the Service Employees International Union and the National Education Assn. approved her nomination.

The Congressional Asian Pacific American Caucus and other Asian American and Pacific Islander advocates had pressured Biden to nominate Su for the role. Biden is the first president in more than 20 years without an Asian-American cabinet secretary. Vice President Kamala Harris, U.S. Trade Representative Katherine C. Tai, and Arati Prabhakar, director of the White House Office of Science and Technology Policy, serve in cabinet positions but are not cabinet secretaries.

Rep. Judy Chu (D-Monterey Park), president of the Congressional Asian Pacific American Caucus, said in a tweet that she was “delighted” by Su’s nomination.

“She is uniquely qualified to lead the department and will successfully deliver results for our employees on Day 1,” said Chu.

Senator Bernie Sanders (I-Vt.), chair of the Senate Health, Education, Labor and Pensions Committee, commended Su’s nomination, although he had written a letter to Biden earlier this month to propose two other choices: former Secretary of Labor under Clinton, Robert Reich, and Sara Nelson, head of the nation’s largest flight attendant union.

“I am confident that Julie Su will make an excellent labor minister,” Sanders said in a statement. “I look forward to working with her to protect workers’ rights and build the trade union movement in this country.”

Biden called Su a “tried and experienced leader” and “critical partner” who played a key role in recent negotiations between rail operators and unionized workers. He urged the Senate to quickly confirm her in the position.

Senator Bill Cassidy (R-La.), the top Republican on the Senate Labor Committee, said in a statement that Su had a “disturbing track record” and called for a “full and thorough hearing” on her nomination.

He also criticized Su’s support of a controversial California law that reclassified some gig workers as employees rather than independent contractors, which critics say limits companies’ flexibility in hiring freelancers.

“This does not inspire confidence in her ability to hold her current position, let alone get promoted,” Cassidy said.

Times staff writers Sarah D. Wire and Jennifer Haberkorn contributed to this report.

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