California’s troubled unemployment benefits department will soon have its third director in the past two years.
Employment Development Department Director Rita Saenz stepped down on Friday after just over one year on the job. She’ll be replaced by Nancy Farias, who has been a deputy director at the department since 2020. She’ll earn a salary of $204,613.
Saenz, who led the California Department of Social Services in the early 2000s and is a former executive with Xerox Corp., came out of retirement to lead the department in 2021 as it was plagued by fraud and a backlog of payments. The department was overwhelmed with unemployment benefits at the start of the pandemic after Gov. Gavin Newsom issued the nation’s first statewide stay-at-home order that forced businesses to close.
$20 Billion Paid Out for Fake Claims
Since then, the agency has received 26.4 million claims and paid $180 billion in benefits. But about $20 billion of those payments went to scammers who posed as prison inmates and, in one instance, U.S. Sen. Dianne Feinstein to fool state officials into sending them checks.
As director, Saenz sought to implement 21 recommendations from the California state auditor. The department has implemented five of those recommendations so far, while the rest are in various stages of implementation. In a memo announcing her resignation, Saenz said she had only planned to stay with the department for a short time.
“I am proud of the many reforms and new programs EDD put in place during the last year,” Saenz said in a news release issued by the department. “Nancy Farias has the energy and direct experience to keep this positive momentum going.”
Newsom praised Saenz for her “steadfast leaderships,” crediting her with leading “important reforms at the Department to better serve working Californians, prevent fraud and hold bad actors to account.”
Payments to Some Legitimate Claimants Impacted
The department recently uncovered another fraud scheme as scammers were posing as doctors to trick state officials into issuing them disability checks. The department froze about 345,000 claims associated with 27,000 doctors. Earlier this week, the department announced about 98% of those claims were fraudulent.
But the department did freeze benefits of some legitimate claimants who have had trouble getting their benefits restarted.
“The EDD has tried so hard to downplay their most recent failure at preventing fraud within their disability programs,” said Assemblyman Jim Patterson, R-Fresno, who has been a vocal critic of the department. “The Governor needs to put someone in charge of the EDD with the guts to make the necessary changes.”