President Donald J. Trump kicked off the new year by ordering a precision U.S. military operation that seized Public Enemy #1 Nicolás Maduro from his own capital in Caracas – an elite strike that handed the deposed dictator over to federal prosecutors in New York. Before the confetti even settled on that headline-grabbing capture, the same highly specialized focus had already shifted to his next priority to Public Enemy No. 2. Gavin Newsom and exposing the rot in California.
In what can only be described as a long-overdue reality check for Sacramento, Trump announced this week that a federal fraud investigation into the State of California is officially underway, and he didn’t mince words, calling California “more corrupt than Minnesota, if that’s possible,” signaling that federal investigators are already digging, something they should have been looking into years ago.
The timing of the federal fraud investigation could not be more damning, arriving just as California approaches the first anniversary of the Palisades Fire on January 7 – an inferno that should never have been allowed to become a catastrophe in the first place. From the moment flames ripped through Pacific Palisades, killing twelve residents and obliterating thousands of homes, Los Angeles officials and state fire agencies launched a coordinated PR spin that collapsed under scrutiny once independent reporting began peeling back the cover-up.
What local and state spokespeople called an unavoidable “holdover fire” was actually the predictable result of abandoned protocols, state interference, and policy decisions that tied firefighters’ hands, contradicted basic cold-trailing fire suppression practices, and prioritized bureaucratic image management over public safety. Internal manuals and records revealed that crews were restricted from aggressive mop-up, hydrants sputtered air while reservoirs sat drained, and state park directives trumped frontline fire prevention, all while officials repeated a script that blamed nature and downplayed human error. That narrative unravelling reached a wider audience only after reality-show personality Spencer Pratt used the FireAid scandal, originally uncovered by Circling the News, to shed light on internal documents and contradictions the state tried to bury, forcing uncomfortable questions about negligence being dressed up as inevitability. The Palisades Fire cover-up followed the same institutional playbook as homelessness dollars and rail money – deny, delay, and deflect until independent journalists and outside pressure made it impossible to sustain, and now the timing of this federal probe dissects the rot cell by cell, under a high-powered federal microscope.
The most expensive failure in the state, homelessness. Since Newsom took office in 2019, California has burned through roughly $24 billion in homelessness funding. Billion. With a “B.” That is not a typo, and it is not hyperbole. That is enough money to permanently house every unsheltered person in the state multiple times over. Instead, a state audit found that officials often couldn’t even track where the money went, let alone whether it produced results. Funds disappeared into a bureaucratic black hole of nonprofits, consultants, and politically connected intermediaries, all feeding at the trough while encampments metastasized across sidewalks, beaches, freeway underpasses, and public parks.
When Newsom took office, California’s homeless population hovered around 151,000. By 2025, it had ballooned past 187,000. In Los Angeles County, the situation is even more grotesque, with entire neighborhoods effectively surrendered while officials congratulate themselves for shaving a percentage point here or there. The spin is impressive. The results are not. More money has produced more misery, not less, and that is not an accident. It is a system designed to sustain itself, not solve the problem. Federal scrutiny is already creeping in, with U.S. Attorneys, including US attorney Bill Essayli, forming task forces to trace where those billions actually landed.
In October 2025, the first wave of federal charges were announced by the U.S. Attorney’s Office, Central District of California against executives at Shangri-La Industries. The indictment pulled back the curtain on a classic pay-to-play scheme in which millions earmarked for supportive housing and VA rehab projects were steered toward developers with deep pockets and deeper connections, while strategic campaign donations flowed to county power brokers who controlled approvals and oversight. At the center of it all is Building 208 at the West LA VA Campus – a $20.5 million rehabilitation that ballooned under the Board of Supervisor’s influence, and an indictment alleging millions meant for homeless housing were diverted into luxury spending while key local officials smiled through it all.
The Shangri-La scandal is just one example of why Trump’s new fraud probe is critical, because California’s homelessness funding didn’t just fail the unhoused, it became a monetized pipeline where taxpayer dollars meant for crisis housing were quietly rerouted into political favors, developer kickbacks, and insider enrichment now squarely in the federal crosshairs.
But homelessness is just the most visible symptom of a much deeper disease.
California’s high-speed rail project is undoubtedly the state’s longest-running and most expensive practical joke. What voters approved in 2008 as a $33 billion transportation project has metastasized into a $130+ billion sinkhole with no completion date, no functioning rail line, and barely 119 miles of track under construction after more than 16 years. Roughly $15–16 billion has already been spent, largely on consultants, planning, land acquisition, and contracts that seem to exist for the sake of existing. Trump previously pulled over $4 billion in federal funding, calling the project “disastrous” and “fraudulent.” Newsom sued, then quietly dropped the lawsuit in December 2025, blaming “politics.”
Oh you can believe it’s getting political now – only the kind of politics that comes with subpoenas.
And then there’s Attorney General Rob Bonta, who didn’t just look the other way, he actively suppressed the Los Angeles County Sheriff’s Department criminal investigation into Sheila Kuehl and her central role in pay-to-play contracting at LA Metro, where public funds were routed through nonprofits and consultants tied directly to political allies. At the very same time that investigation was underway, Bonta accepted campaign support from a PAC singularly focused on unseating then-Sheriff Alex Villanueva, the very official whose department was overseeing the probe. That suppression, however, didn’t kill the evidence. The criminal investigation initiated under Villanueva, paired with sustained reporting by The Current Report, migrated east, delivering thousands of pages of documents to U.S. senators and federal watchdog organizations in Washington. The fallout was unmistakable: the corruption trail became impossible to ignore and ultimately forced the withdrawal of Phillip Washington’s nomination to lead the Federal Aviation Administration under the Joe Biden administration, a quiet but devastating confirmation that California’s attempt to bury the scandal collapsed the moment federal sunlight hit the file.
Then there’s the COVID-era unemployment fraud at California’s Employment Development Department. Under Newsom’s watch, at least $32 billion, possibly closer to $40 billion, was stolen through fraudulent claims. Prison inmates received benefits. International crime rings cashed checks. Legitimate Californians waited months for help while the state waved the fraud through like a VIP guest. This wasn’t a technical hiccup. It was systemic negligence on a staggering scale.
And just in case anyone still believes this is all theoretical, you would have to be living under a rock to avoid Sacramento being rocked by one corruption scandal after another. Former Newsom insiders, and numerous city and state officials have been indicted in bribery and influence-peddling schemes that expose how policy is quietly auctioned behind the scenes. A recent “Califraudia” report pegs California’s losses from fraud, waste, and abuse at an estimated $250 billion.
That’s not a rounding error. That’s a business model, and California’s political leaders have been running it consistently for years.
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