Head of troubled California employment agency leaves as fraud problems persist

Ritz Saenz, the veteran state official Gov. Gavin Newsom chose to make the troubled Employment Development Department more efficient and responsible, is leaving the job.

Newsom announced late Friday that Saenz will be replaced Tuesday by Nancy Farias, the agency’s chief deputy director of external affairs, legislation and policy. The position has an annual salary of $204,613.

Saenz will return to her previous job as a member of the California Commission on Aging.

Newsom named Saenz on December 30, 2020, hailing her as “well-prepared to lead EDD at what is sure to be one of the most difficult moments in the department’s history,” She had served in several top state jobs.

She took over months after a Newsom-named strike team recommended steps to make the agency run smoothly, and by several metrics was making progress.

But though Democratic legislative lawmakers have been somewhat sympathetic, Saenz continued to confront enormous challenges, and the agency remains riddled with controversy. Republicans remained sharply critical.

“The fact the Governor replaced her is not surprising,” said Assemblyman Jim Patterson, R-Fresno, who follows EDD closely. “The EDD has tried so hard to downplay their most recent failure at preventing fraud within their disability programs. Their ‘nothing to see here’ excuse-making is actually hurting people.”

Among the problems still dogging the agency:

▪ Consumers complained – and some continue to complain – that EDD personnel were slow to return phone calls and routinely offered confusing explanations about why it would delay or reject claims. EDD has hired more representatives to handle calls.

▪ An estimated $20 billion paid in fake claims to people receiving federally-funded unemployment benefits is unlikely to be recovered. In July, EDD brought in former U.S. attorney McGregor Scott to coordinate investigations into fraud schemes targeting pandemic relief.

▪ The agency continues to search for more than 1 million people who got payments from the federal Pandemic Unemployment Assistance program so they can prove they were eligible for the money.

▪ Its disability benefits program has also been riddled with fraud. Thursday, EDD said about 98% of the 27,000 disability insurance medical provider accounts it initially flagged as suspicious were likely fraudulent.

Newsom and EDD

Newsom praised Saenz’s service Friday. “Director Saenz took the helm at EDD at a critical juncture of the pandemic, bringing her decades of experience in the public and private sectors to tackle the unprecedented challenges facing our state and nation,” he said.

Farias will start her new job Tuesday. Newsom praised her for playing “an invaluable role in the Department’s ongoing efforts to strengthen the state’s unemployment system and implement improvements…”

Farias, 49, of Sacramento, has been in her current job since 2020. She was director of government relations at SEIU Local 1000 from 2017 to 2020.

She served as deputy chief of staff in the office of Sen. Henry Stern from 2016 to 2017 and district director at the office of Assemblyman Mike Gatto from 2015 to 2016.

Farias also was deputy secretary of legislation at the Government Operations Agency from 2013 to 2016, deputy director of legislative affairs at the California Department of Human Resources from 2012 to 2013 and legislative director at SEIU Local 1000 from 2009 to 2012.

She has a master’s degree in political science from Suffolk University and a law degree from Suffolk University Law School.