Steve Hilton and Herb Morgan Call for Immediate Statewide Audit of California Social Services Spending After Minnesota Fraud Scandal

SACRAMENTO, CA – After a multi-billion-dollar fraud scandal erupted in Minnesota’s social services system, gubernatorial candidate Steve Hilton and State Controller candidate Herb Morgan called for an immediate, independent audit of California’s social services spending. Both campaigns said California’s enormous budget and one-party bureaucracy have created an environment where corruption is not an exception but a predictable outcome.

Hilton said Minnesota’s collapse mirrors the deeper corruption that has taken root in California.

“What happened in Minnesota is exactly what Californians should expect when bureaucracies operate in the dark,” Hilton said. “It shows how corruption becomes endemic under one party rule. Gavin Newsom’s feckless lack of interest in cleaning up California’s corruption makes Tim Walz look serious. California spends more than any state on social programs, but we have almost no real oversight. After the EDD catastrophe, where the state admitted to more than 20 billion dollars in fraudulent payments, including funds sent to criminal networks and even death row inmates, Sacramento should have taken responsibility. Instead they pretended nothing was wrong. We need a top to bottom audit of Medi-Cal, CalFresh, CalWORKs, homelessness spending, and the nonprofits and intermediaries receiving billions with no transparency or performance checks. And that audit must be outside, nonpartisan, and totally public.”

Morgan said corruption, not lack of funding, explains California’s failures.

“California runs a 325 billion dollar state budget, the wealthiest state in the wealthiest country on earth. There is no program of compassion we cannot deliver better, faster, and more inclusively than any government on the planet. From housing to healthcare, from family services to food security, from education to incarceration, we have the resources to lead the world.

So when we fail, there is only one explanation: theft. Not just petty fraud, but the systematic diversion of public resources at the highest levels. Until we expose where every dollar goes, California will keep pouring money into broken systems instead of people.”

Hilton and Morgan said the EDD scandal, more than 20 billion dollars in confirmed fraud, shows that corruption has been allowed to flourish inside the state’s social services system. They outlined a joint reform effort that includes:

• Independent audits of Medi-Cal, CalFresh, CalWORKs, and all housing and homelessness programs
• Full public reporting and performance transparency for nonprofit contractors and intermediary groups
• A real time, searchable statewide spending dashboard
• AI driven fraud detection based on private sector standards
• A permanent fraud prevention and accountability unit within the Controller’s office
• Annual public hearings on social services spending and oversight
• An outside, nonpartisan, and totally public audit of all major social services programs

Hilton said California fails its most vulnerable when corruption is ignored, and that the system will not work until those responsible are exposed and removed.

“This is about restoring honest government,” Hilton said. “Herb and I are committed to exposing waste, stopping fraud, and making sure California’s safety net helps the people it is meant to serve, not criminals, scammers, or politically connected insiders.”

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For more information about Steve Hilton’s campaign and vision for California, visit www.stevehiltonforgovernor.com.

For more information about Herb Morgan, visit https://herbmorgan.com.