An exchange between Rep. Kevin Kiley and former Rep. Jason Chaffetz focused on allegations of widespread fraud, waste, and mismanagement in California under Gov. Gavin Newsom, following the release of a nonpartisan state auditor’s report.

Kiley said the findings from the auditor sharply contradict claims that California’s finances are under control.

“Yeah. So this came from the nonpartisan state auditor, which essentially christened California the fraud capital of the United States,” Kiley said.

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He explained that the report showed a significant increase in agencies flagged as high risk.

“With the number of agencies classified as high risk, meaning there’s rampant fraud, abuse, mismanagement. It has doubled during Gavin Newsom’s tenure from four agencies to eight agencies,” he said.

Kiley said the audit highlights problems across multiple government programs.

“So we’re talking about all kinds of fraud when it comes to Medicaid, when it comes to SNAP benefits, when it comes to uninsurance benefits,” he said.

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He added that those findings come on top of other well-documented failures in state spending.

“And all of this, by the way, comes on top of the incredible fraud and waste and mismanagement that we already knew about the high speed train,” Kiley said.

He pointed to delays and escalating costs tied to the project.

“Where there’s been no track laid in 17 years, spending $18 billion.”

Kiley also referenced pandemic-era spending and canceled technology projects.

“The $32 billion during covid At a minimum of uninsured employment insurance fraud,” he said, along with “the $650 million on a canceled 911, next generation system that was canceled because the technology wasn’t there.”

Based on those figures, Kiley argued that California’s problems are systemic.

“And so California is absolutely under this governor, the fraud capital of the United States,” he said.

He warned that the state’s approach could extend beyond its borders.

“And this is exactly the model that Governor Newsom wants to take to the rest of the country.”

Chaffetz noted that Kiley’s comments drew a direct response from the governor.

“Well, you got the governor’s attention because he responded to you saying, quote, Kylie is wrong,” Chaffetz said.

He summarized Newsom’s statement disputing the claims.

“The auditor’s high risk list does not allege wrongdoing or billions in currency lost it. Lost it is a management tool used to target complex programs for heightened oversight in corrective action.”

Chaffetz continued quoting the response, which rejected Kiley’s interpretation.

“Representative Kylie’s claims are flat out false, and rippers misrepresent both the State Auditor’s report and the facts,” Chaffetz said, before asking, “Quick, your reaction to this?”

Kiley stood by his position and encouraged the public to examine the reports directly. “I’d invite anyone to read the audit,” he said.

He added that additional reviews have raised similar concerns.

“And by the way, there have been other audits, like the one that found that $24 billion was spent on homelessness, and they lost track of the money.”

Chaffetz closed by pointing to California’s broader fiscal condition.

“Yeah, and you know, you can look at the bottom line there, in the state of California, they’re billions of dollars in debt,” he said.

WATCH:

Newsom denies California is the Fraud Capital of America, saying “Kiley is wrong.” But it was the nonpartisan State Auditor who found he lost track of $24 billion in homelessness funds, allowed $32 billion in unemployment fraud, and doubled the number of “high-risk” agencies. pic.twitter.com/0cskCOiEEY

— Kevin Kiley (@KevinKileyCA) December 27, 2025

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