Los Angeles Politics

Biden taps key figure in unemployment fraud scandal for Labor chief

President Biden on Tuesday nominated Julie Su to be his next Labor secretary, setting up the Californian to become the first Asian American he has appointed to run a Cabinet-level department.

Su, who has served as deputy Labor secretary since 2021, would replace Labor Secretary Marty Walsh, who plans to leave the administration in March to lead the National Hockey League Players’ Assn.

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

Before joining Biden’s Labor Department, Su served as secretary of California’s Labor and Workforce Development Agency. In that role, she oversaw the California Employment Development Department, which is responsible for doling out unemployment benefits but struggled to manage a backlog of claims and to combat widespread fraud during the COVID-19 pandemic.

The state agency was overwhelmed with unemployment benefit applications at the start of the pandemic. The office received at least 26.4 million claims and paid out $180 billion in benefits, but about $20 billion of those payments went to scammers, according to state officials. The state has recovered at least $1.1 billion in the insurance funds, most of which will be turned over to the federal government.

Su’s supporters say she inherited a broken, understaffed unemployment system that was not prepared to handle the onslaught of COVID-related claims.

Her critics say she mismanaged the agency.

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

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

The longtime labor official, who has been considered the front-runner for the post since Walsh announced his exit, was confirmed by the Senate to her current role in a 50-47 vote. Media reports mentioned her as a possible pick to lead the department before Walsh was named. Unions including the Service Employees International Union and the National Education Assn. have endorsed her nomination.

The former California labor commissioner and civil rights attorney earned a MacArthur Foundation “genius” grant for her legal work seeking better working conditions for immigrants in 2001.

The Congressional Asian Pacific American Caucus and other Asian American and Pacific Islander advocates had pressured Biden to name Su to the role. Biden at present is the first president in more than 20 years to not have an Asian American in a Cabinet secretary-level position. Vice President Kamala Harris and U.S. trade representative Katherine Tai are of AAPI descent but do not lead a Cabinet executive department.

Sen. Bernie Sanders (I-Vt.), who chairs the Health, Education, Labor and Pensions Committee, praised Su’s nomination despite penning a letter to Biden earlier this month to propose two other choices: former Clinton administration Labor Secretary Robert Reich and Sara Nelson, head of the nation’s largest flight attendants union.

“I’m confident Julie Su will be an excellent secretary of Labor,” 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.”

Sen. Bill Cassidy (R-La.), the ranking Republican of the same committee, said in a statement that Su has a “troubling record” and called for a “full and thorough hearing process” on her nomination.

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

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