California Hospice Fraud Puts Newsom’s Record Under Scrutiny

California Governor Gavin Newsom, 58, is widely regarded as a potential contender in the Democratic Party’s 2028 presidential primary. In October last year, he said he was seriously considering a run, although he added that he would make a decision only after the midterm elections in November.

During an Immigration and Customs Enforcement (ICE) operation in June 2025, Newsom sided with migrants and barred federal law enforcement officers from covering their faces while on duty. By then, several media outlets and analysts had already identified him as one of the Democrats’ possible leading figures for 2028, although the party had formally rallied behind Kamala Harris at national level.

California has also been marked by a long-running pattern of domestic outmigration. The trend, often called the California exodus, began well before Newsom took office but accelerated during his administration. Between 2020 and 2024, the country’s most populous state recorded a net loss of about 1.4 million residents, many of whom moved to Texas.

The figures since 2010 are also striking. About 10 million people have left California for other US states, while around seven million have moved in. The Golden State’s population has therefore come under sustained pressure, with housing costs, crime concerns, taxes and business conditions often cited among the factors behind departures.

Hospice Fraud Raises Oversight Questions

The state also faced fresh scrutiny in April after allegations of large-scale fraud involving federal funds for hospice and palliative care services. California authorities said 21 people had been charged in connection with an alleged $267m fraud scheme involving 14 hospice companies and stolen identities.

Sheila Clark, chief executive of the California Hospice and Palliative Care Association, addressed the issue at a House of Representatives hearing on 21 April and questioned how such applications could have passed through existing checks.

“How do you put a hospice in a burrito stand in California? How do you put a hospice in a tire store? That all had to be vetted through licensure, certification, and accreditation”, Clark said.

City Journal, a conservative public policy magazine published by the Manhattan Institute, estimated that California lost at least $180bn to fraud across several public programs. Critics have disputed the figure, but it has been taken up by conservative commentators and policy groups.

Lance Christensen, vice president of government affairs at the conservative California Policy Center, told The Daily Signal, a conservative news outlet linked to the Heritage Foundation, that City Journal’s estimate was “probably underestimated”.

“It’s probably higher than that. But it’s hard to nail down because nobody goes through to actually validate most applications”, Christensen said.

“When they do find fraud, they know that it’s going to cost more money to recuperate that money. Then you also have a lot of contractors who have learned how to game the system”, he added.

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Political Impact Remains Unclear

Recent fraud involving public funds has also drawn national attention beyond California. In Minnesota, federal prosecutors have pursued a broader investigation into federally funded programs, estimating that potentially more than $9bn of about $18bn allocated to 14 state-run programs since 2018 may have been stolen.

The best-known case is Feeding Our Future, in which about $300m meant to provide meals for children was taken. Many of those charged in the wider investigation were Somali Americans. The scandal has since become a frequent Republican reference point in criticism of oversight failures under Democratic Governor Tim Walz.

At the same time, Republicans face their own vulnerabilities ahead of November. The White House Counsel’s Office has reportedly briefed political appointees on how to handle congressional oversight if Democrats make gains in the midterm elections, including through 30-minute presentations on responding to inquiries.

Trump’s approval ratings have fallen to the lowest level of his second term, with voters especially critical of his handling of the cost of living as the war with Iran has pushed up gasoline prices. His proposed $1.5tn defense budget has added another point of contention, making it harder for Republicans to turn fraud involving public funds into a dominant national issue.

However, the California case gives Newsom’s critics a new line of attack at a time when his record is already under national scrutiny. Whether it will have lasting political impact is less clear. The Democratic field for 2028 has not yet taken shape, and public-sector fraud remains one issue among many in a crowded national debate.