In Brief: DOGE Uncovers Nearly $400 Million in Fraudulent Unemployment Claims, Targets Deep‑Blue States

A newly created federal agency, the Department of Government Efficiency (DOGE), reports it has uncovered approximately $382 million in illicit unemployment benefit payments dating back to 2020. The agency claims that the majority of these funds—some $305 million—were funneled through states with dominant Democratic control, including California, New York, and Massachusetts.

According to DOGE, California alone accounts for nearly 68 percent of benefits disbursed to parolees flagged by federal agencies for criminal records or inclusion on terrorism watchlists—raising fresh questions about oversight and eligibility in federal aid programs.

All three of the identified states maintain what are known as a “Democratic trifecta,” meaning the governorship, state legislatures, and key executive offices such as attorney general and secretary of state are all controlled by Democrats.

“This is another startling blow to taxpayer trust — nearly $400 million in fraud uncovered,” said Labor Secretary Lori Chavez‑DeRemer. “Our Labor Department is fully committed to reclaiming misused funds. We will pursue every case and restore integrity to these systems.”

Musk’s Role and the Scope of DOGE’s Ambition

Elon Musk, serving in a temporary capacity at the helm of DOGE, is nearing the end of his permitted tenure. Under federal ethics rules, “special government employees” like Musk may serve no more than 130 days per year—placing his deadline at May 30. Even before then, Musk has scaled back his active role, but he recently gave a high-profile interview outlining some of the agency’s most egregious discoveries.

When President Trump signed the executive order launching DOGE on Inauguration Day, the agency was tasked with ambitiously trimming $2 trillion from the federal budget by rooting out waste, fraud, and abuse.

In his interview on Fox News with Jesse Watters, Musk revealed several of DOGE’s headline findings—ranging from humanitarian contracts to educational spending.

Shocking Revelations from DOGE’s Audits

Funding a Former Taliban Official

One of the more eye-catching discoveries involved the U.S. Institute of Peace (USIP), which DOGE says had approved $132,000 in payments to Mohammad Qasem Halimi—a former Taliban member who once served as Afghanistan’s Chief of Protocol. According to Musk’s account, the agency moved swiftly to cancel that contract once alerted.

Halimi had been detained by U.S. forces at Bagram Air Base in 2002 and later held various roles in Afghanistan’s government, including Minister of Hajj and Religious Affairs.

Extravagant School Spending

DOGE also turned its focus on millions in COVID‑relief funding allocated for educational use. The audits revealed that some districts purchased hotel rooms, paid for offsite trips, and even rented ice cream trucks—expenses that many say had no clear educational benefit.

One reported instance involved Utah’s Granite School District spending $86,000 on hotel rooms at Caesars Palace for a conference; meanwhile, Santa Ana Unified in California reportedly shelled out $393,000 to rent a Major League Baseball stadium. Other examples included $60,000 for public swimming‑pool access and ice cream trucks in California districts.

Sesame Street in Iraq

Another controversial finding involved overseas spending. DOGE flagged $20 million appropriated by USAID and given to Sesame Workshop for a program called Ahlan Simsim Iraq. The show aimed to advance inclusion, respect, and social cohesion among Iraq’s varied ethnic and religious communities. To some critics, it seemed an excessive or ill-timed cultural investment during a period of ongoing regional instability.

Broader Government Waste

DOGE’s efforts align with a March report by the Government Accountability Office (GAO) that identified $162 billion in improper federal payments across a wide range of agencies. The GAO noted that five programs—the U.S. Department of Health and Human Services, Medicare/Medicaid, the Treasury, the USDA, and SBA—accounted for 75 percent of the total waste.

DOGE has also moved to cut hundreds of millions of dollars from DEI (Diversity, Equity, and Inclusion) contracts in response to those findings.

Political Dimensions and Pushback

Critics argue that DOGE’s focus on states with Democratic leadership raises questions about political targeting, especially given that many large states—regardless of party—handle high volumes of benefit disbursements and face greater exposure to fraud. Still, the agency’s findings have already spurred calls for aggressive audits and tighter verification systems in federal benefit programs.

As Musk prepares to depart, the question remains whether DOGE will sustain its momentum—and whether its findings will translate into recoveries, prosecutions, or lasting reforms to prevent similar fraud in the future.