President Donald Trump escalated his campaign against Democratic-led states on Tuesday, announcing that a "Fraud Investigation of California" has officially begun. The announcement came just 24 hours after Minnesota Governor Tim Walz dropped his reelection bid amid a massive $9 billion fraud scandal, a move Trump claimed was the result of Walz being "caught red-handed."
Writing on Truth Social, the President claimed that California, under Governor Gavin Newsom, is "more corrupt than Minnesota, if that's possible." Trump argued that blue-state governors have grown comfortable with "waste, fraud, and political favoritism," insisting that "No one is above the law!"
The President’s focus on California comes as Governor Newsom faces a scathing new assessment from the state’s nonpartisan auditor. The report placed Newsom’s administration and eight major agencies on a "high-risk" list, citing deep-seated failures in financial accountability and public safety.
The state auditor's report highlighted a staggering 11% payment error rate in California's CalFresh program. Auditors warned that these persistent errors could expose the state to $2.5 billion in additional penalties and costs by 2028 if not corrected.
In addition to food assistance failures, the audit flagged roughly $1.5 billion in improper unemployment payments across 2023 and 2024. These losses occurred years after a pandemic-era fraud wave that saw international criminal syndicates reportedly siphon billions from the state's systems.
Whistleblower investigations within the audit also uncovered smaller, but egregious examples of waste. These included millions of dollars spent on unused state-issued mobile devices and a general lack of "transaction-level" controls across several major agencies.
President Trump has used these findings to argue that "one-party Democrat rule" leads to ballooning costs for working Americans with zero accountability. He vowed to restore "law-and-order standards" to federal agencies to ensure taxpayers are no longer treated as "an endless ATM" for mismanaged states.