Segment #722
California's ongoing challenges with fraud and political controversies do pose risks to Governor Gavin Newsom's potential 2028 presidential bid, but their impact appears mixed and not necessarily decisive as of late 2025. Newsom remains a leading contender in many Democratic primary polls, often described as the frontrunner or near the top alongside figures like Pete Buttigieg.Major Fraud and Political Issues Tied to Newsom's AdministrationKey criticisms include:
Unemployment Insurance (EDD) Fraud: During the pandemic, California experienced massive fraud estimated at $20–55 billion in improper or fraudulent payments. Critics blamed lax verification under Newsom's oversight, though much involved federal programs. This fueled his 2021 recall effort and remains a point of attack, but it's several years old and tied to a national crisis.
Homelessness Spending Inefficiencies: California spent about $24 billion on homelessness since 2019, yet the population rose to over 181,000. Audits criticized poor tracking of outcomes and cost-effectiveness. Newsom's Project Homekey faced fraud allegations in some projects, and he vetoed bills requiring annual evaluations. Amid budget deficits, he proposed cutting major homelessness funding, sparking clashes with local leaders.
Recent Corruption Case: In November 2025, Newsom's former chief of staff was indicted on federal fraud charges involving campaign funds (not directly tied to state operations). Newsom wasn't implicated, but it created negative headlines in his orbit.
Other Controversies: Older issues like the 2020 French Laundry dinner (hypocrisy during COVID restrictions), a resurfacing 2007 affair scandal, high gas prices/crime perceptions, and budget deficits (projected multibillion-dollar shortfalls) feed narratives of mismanagement. Republicans and some moderates portray California under Newsom as emblematic of liberal excess.
Impact on Presidential ChancesThese issues could hurt Newsom nationally, where California's problems (homelessness, high costs, crime perceptions) are often weaponized against Democrats. Critics argue they highlight ineffective governance, potentially alienating moderates or independents in a general election. In primaries, progressive rivals could use them to question his effectiveness, while Republicans would amplify them if he becomes the nominee.However, several factors mitigate the damage:
Strong Positioning Against Trump → Newsom's aggressive trolling and opposition to Trump (e.g., on immigration, redistricting) boosted his profile and betting odds in 2025. Polls show surges after high-visibility clashes, endearing him to the anti-Trump Democratic base.
Recent Polls (as of late 2025) → Newsom leads or ties for the lead in many 2028 Democratic primary surveys (e.g., 25–36% in national polls, ahead in California). Head-to-head hypotheticals against Republicans like JD Vance are close or favorable. Even in-home polls show mixed support for a run, but he's favored among California Democrats.
Political Resilience → Scandals haven't derailed his state-level success (reelection, recall survival). The 2028 field is open post-Harris/Trump era, and Newsom's fundraising, charisma, and national media savvy position him well. Many analysts note he's built "scar tissue" from battles.
In summary, while fraud scandals and issues like homelessness/budget woes provide ammunition for opponents and could erode broader appeal, they haven't significantly dented his frontrunner status among Democrats so far. Much depends on how he navigates 2026 midterms, economic recovery, and whether new scandals emerge. The race is years away, and perceptions can shift rapidly.