Outlaw The Non-Profits. Katy Grimes Talk to A&G

Summary

Armstrong & Getty On Demand

Episode: "Outlaw Non-Profits. Katy Grimes Talks to A&G"

Release Date: July 10, 2026
Host: Armstrong (Jack)
Guest: Katy Grimes, Editor in Chief of the California Globe

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Episode Overview

This episode dives deep into issues of nonprofit abuse and large-scale welfare fraud, with a particular focus on California’s political elite and the state’s SNAP (food stamp) program. Investigative journalist Katy Grimes joins Armstrong to discuss recent scandals involving Governor Gavin Newsom and his wife, questionable nonprofit activities, and the epidemic of fraud in social welfare programs, including a recent federal raid.

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Main Discussion Points & Insights

1. The Nonprofit "Scam" in California Politics

• Nonprofits as Shadow Governments

  • Katy Grimes describes the rise of politically-connected nonprofits as a “shadow government,” allowing public funds to be spent with little transparency due to lax reporting and oversight ([03:36]).
  • FOIA and public records requests often stop at the nonprofit’s door, making investigations challenging.

• Newsom Scandal: Source of Wealth

  • Discussion centers on Governor Gavin Newsom and his wife’s involvement with nonprofits, questionable enrichment, and “where did their money come from?”
  • Grimes shares longstanding frustration: "Reporters like me, that's where it stops. Because public records requests stop at the door of the nonprofit.” ([03:59])

• Nonprofits as Profit Machines

  • Armstrong vents about the basic scam: call yourself a nonprofit, pay yourself a bloated salary, and enjoy the perks—“meals, trips, vacations, salaries, all kinds of crap. And you call it a nonprofit.” ([05:05])
  • Grimes estimates travel/conference expenses in IRS forms are "hundreds of thousands of dollars for some of the smallest nonprofits. It's just this lifestyle money that is being so abused." ([05:57])
  • Grimes suggests: "The whole thing should be scrapped. And if you're legitimate, reapply and start over." ([05:57])

• Political Imitation and Emboldenment

  • Not just Newsom: the Clintons, Bidens, and local politicians use nonprofits in similar ways.
  • Grimes: "The Clintons seem to have perfected it because we watched nonprofits just explode after the Clinton Global Initiative was done. And I think a lot of other politicians were emboldened by that..." ([07:22])

• Lifestyle Questions: Newsom's Homes & Perks

  • Newsoms’ homes—$9M and $3.8M—were “gifted”; funded through LLCs set up a day before closing ([08:18]).
  • Extravagant travel, e.g., $26,000/night villa in Cabo San Lucas “owned by some Russian oligarch that was clearly gifted to them” ([08:58]).

• Quid Pro Quo Patterns

  • Armstrong points to a recent exposé: “...somebody would give a bunch of money to Newsom, one of their nonprofits, and then two days later they'd get named the blah, blah, blah...”
  • Grimes: “Always. Yeah. There's a lot of quid pro quo going around...” ([09:29])

2. Frustration with Lack of Accountability

• Armstrong expresses cynicism: "I feel like this happens so often and nothing ever comes of it..." ([09:37])
• Grimes shares the same: "...I write a lot about it and I research a lot about it and we rarely see anything happen. I think though, that there's so much of this garbage going on in California..." ([09:53])

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Notable Quotes & Memorable Moments

“It’s just this lifestyle money that is being so abused. And, you know, unfortunately, they're making it bad for the legitimate nonprofits that have been around a long time...”
— Katy Grimes ([05:57])

"We watched nonprofits just explode after the Clinton Global Initiative was done. And I think a lot of other politicians were emboldened by that."
— Katy Grimes ([07:22])

“The number of politicians that live lifestyles of the super rich is amazing. And I'll include ... Trump was rich already, but he and his family are getting rich off all kinds of different things. But the whole Biden crime family thing ... the Clinton foundation, it's just something you do.”
— Armstrong ([07:03])

"The home they live in now in Marin is a $9 million home. The one they still have in Sacramento is $3.8 million. And they didn't buy either one of them. So there's a lot of weirdness around the Newsoms lifestyle..."
— Katy Grimes ([08:18])

“You don't do that for nothing in return.”
— Armstrong (on $26,000/night villa) ([09:03])

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Key Segment Timestamps

• [02:39] Show opens with Armstrong intro, issue preview, welcome to Katy Grimes
• [03:36] Grimes on the “nonprofit NGO scandal,” history and challenges investigating nonprofits
• [05:05] Armstrong explains the nonprofit “racket” for personal gain
• [05:57] Grimes on abuse, calls for scrapping and reapplying for nonprofit status
• [07:03] Broader national pattern: Clintons, Bidens, Trumps and enrichment via nonprofits
• [08:18] Newsoms’ homes, suspicious gifting, and extravagant travel perks
• [09:29] Reports of pay-to-play through nonprofit donations and political appointments
• [09:53] Frustration about lack of consequences for fraud

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3. SNAP & Welfare Fraud: How California Sets the Bar

• Recent Raid on SNAP Stores

  • July 3rd, multi-agency undercover raid: USDA, Homeland Security, and LAPD, targeting stores in LA Skid Row exchanging SNAP benefits for cash ([13:48]).
  • 6 stores charged with cash-exchange, 27 more with SNAP-for-restricted-items (alcohol, vapes, etc.).

• Shocking Numbers

  • CA’s SNAP program is $12.5B/year: Grimes says 11% fraud rate, “either duplicates or people from out of state or out of the country” ([13:48]; [15:02]).
  • Armstrong: "God, I'd say" about the enormity of the fraud ([15:00]).

• Federal Funding Dependence

  • One-third of the CA budget is federal money; 80% of current federal dollars support Health & Human Services ([15:02]).
  • Grimes on why Newsom and AG Bonta fight federal funding cuts so hard: massive reliance.

• Elon Musk “Doge” Reference

  • Armstrong/Grimes reference Elon Musk’s “Doge” government waste team: claimed half of federal budget is “fraud,” and if eliminated, “Americans wouldn't have to pay income taxes.” ([16:45])

• Fraud and Illegal Immigration

  • Grimes: “California receives 80% of all the federal funding for illegal immigrant families, which is also part of this welfare money... in the entire country” ([17:26]); Armstrong: “Wow.”

• National Relevance

  • Armstrong points out listeners in other states “have a reason to care” since CA’s misuse is with federal funds ([18:07]).
  • Grimes: “When you hear Gavin Newsom, you know, boasting that California sends more to the federal government than it takes... that's total bs. We're taking a lot more than we're creating.” ([18:31])

---

Additional Commentary

• Armstrong is exasperated by politicians blaming childhood hunger on billionaires: “If your kid is going to bed hungry, you are not good at figuring out where the food is...” ([13:03]; [18:51])
• Grimes notes that, contrary to the “hungry kids” narrative, “If you've walked by a California elementary school anytime recently... the majority of the kids are overweight.” ([19:19])

---

Final Thoughts / Tone

The episode is a bracing, sarcastic takedown of California’s political culture, nonprofit gaming, and welfare bureaucracy bloat. Armstrong’s skepticism and Grimes’ dogged reporting highlight both the massive scale and the regular normalization of fraud and corruption, while expressing deep frustration at how little accountability exists.

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For Further Study

• [03:36–10:20] Nonprofit abuse, Newsom/Clinton/Biden patterns, evidence and examples.
• [13:48–19:59] SNAP fraud, federal raid details, scope of fraud, national impact.
• [Notable Quotes above] For quick insight into tone and major points.

---

Summary prepared for listeners who want to cut through California politics’ most entrenched—and expensive—scams.

Transcript

[Armstrong and Getty]

This is an I Heart Podcast Guaranteed Human summer is here. At Orderly Meds, we know this time is a reminder that life is full of new beginnings. Whether you're celebrating the nice weather, starting a new chapter, planning a vacation, or simply looking ahead to what's next, this season can be the perfect time to invest in yourself and your health. If you've struggled with weight loss and are curious about GLP1 medications, orderly meds can help you learn about your options. Through a simple virtual process, you can connect with licensed medical professionals who can determine whether treatment may be appropriate for you. Getting started is fast, convenient, and happens online from the comfort of home. This summer, consider a new approach to feeling your best. Visit orderlymeds.com podcast to learn more. That's orderlymeds.com podcast orderlymeds.com podcast because every new season is an opportunity to take the next step forward. Compounded medications are not FDA approved, eligibility required and determined by a licensed provider. Individual results may vary. See website for details.

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[Glenn Washington]

I'm Glenn Washington, host of Snap Judgment from kqed. Every week Snap drops you inside someone's biggest decision. The kind of decision you can only make once. With everything on the line. What do you believe? What do you want and what would you risk to get it? Find out Snap Judgment new episodes every Thursday. Wherever you get your podcast.

[Armstrong]

I was considering playing this report about Doge. Remember Doge, that Elon Musk led and the goal was to cut waste in government and all that sort of stuff? Well, we're talking, we're about to talk about the unbelievable waste we've got. For instance, in California with taxpayer money. And I'm sure it's true in lots of other states. And it's federal dollars, so it matters. A lot of it is federal dollars, and it matters to all of you out there. We'll talk about that in a second. But right now I'd like to welcome to the show Katie Grimes, the editor in chief of the California Globe. Katie's a longtime investigative journalist covering California State Capitol. Katie, how are you today?

[Katie Grimes]

Hi, Jack. Doing well, thank you.

[Armstrong]

Before we get to this unbelievable welfare fraud story, how much trouble is Gavin and his wife in with this where did their money come from scandal? Is this a real story?

[Katie Grimes]

I do believe it is a real story. And it's because this kind of nonprofit NGO scandal has been building for a long time, frankly. Some Years ago, like 2006, 2010, I was reporting fraudulent nonprofits to the California attorney general. Back then was when Jerry Brown was still AG and nothing ever happened. And then we watched them just exponentially grow, and they become like this shadow government in California where tons of taxpayer money goes into them. Reporters like me, that's where it stops. Because public records requests stop at the door of the nonprofit. And it's just been this massive. Just this, is this black market spending almost. And unfortunately, we've been reporting and many other news outlets in the state have been reporting on the newsoms, on the first partners, skeezy nonprofits. Besides, just, you know, kind of the filth that she produces and then requires public schools to buy these weird videos. They've, you know, she's been taking a lot of money out of these nonprofits as well. And I, I think it could be almost like the textbook case for, as a warning shot across the bow to a lot of other politicians who are tied into nonprofits.

[Armstrong]

Yeah, they need to outlaw the term nonprofit. It's just ridiculous. And I can't believe people fell for it for so long. Hopefully, that is coming to an end. Just the brief version is you, you start a nonprofit you called a non. And no, you don't show any profits, but you bring in lots of money. And, you know, some of your expenditures are, well, you or you need a salary as the person who runs a nonprofit. And it turns out your salary is way more than you'd make in the private sector doing something. And of course, you need a car to drive, even though in the modern world very few people get cars anymore. You're gonna have a car and you travel a lot and you know, you have to stay. You shouldn't have to stay in a Motel 6. You should have to stay in a decent Hotel, blah, blah, blah, Meals, trips, vacations, salaries, all kinds of crap. And you call it a nonprofit.

[Katie Grimes]

Yeah, exactly. When I go digging into the IRS forms that nonprofits have to file every year, you cannot believe the expenditures for travel, conferences. I mean, hundreds of thousands of dollars for some of the smallest nonprofits. It's just this lifestyle money that is being so abused. And, you know, unfortunately, they're making it bad for the legitimate nonprofits that have been around a long time and providing, you know, actual cancer services or research or things like that. I think the whole thing should be scrapped. And if you're legitimate, reapply and start over.

[Armstrong]

Yeah, I would agree with that. It'd be something if Gavin Newsom and his wife actually, either their timing was wrong or they pushed it too far because so many politicians been doing this for so long.

[Katie Grimes]

Oh, yeah. I mean, we had city council members in Sacramento, where I live, who had their own nonprofits, and they were totally tapped into the city budget. And we'd write about it and people would kind of yawn and scratch and look away. You know, it just like it never caught on that this was fraud.

[Armstrong]

The number of politicians that live lifestyles of the super rich is amazing. And I'll include. Now, Trump was rich already, but he and his family are getting rich off all kinds of different things. But the whole Biden crime family thing that they had going the Clinton foundation, it's just something you do.

[Katie Grimes]

Yeah, the Clintons seem to have perfected it because we watched nonprofits just explode after the Clinton Global Initiative was done. And I think a lot of other politicians were emboldened by that and kind of modeled theirs after what the Clintons did.

[Armstrong]

So this scandal, because, you know, the Trump Justice Department goes after Gavin Newsom, it looks like. You know what it looks like. But you think there is plenty of there there that this could turn out to be a problem for Gavin wanting to run for president.

[Katie Grimes]

Oh, absolutely. I really do. It's just, you know, so in addition to their weird non. Her Mrs. Newsom's weird nonprofits, remember, the Newsoms have these two homes that they did not purchase but were eventually gifted to them.

[Armstrong]

Because we all live that way. Right. We all have homes given to us. Several homes. That's a normal lifestyle.

[Katie Grimes]

Yeah, exactly. And the LLC that was created, two separate LLCs, but they just were formed the day before the homes closed. The home they live in now in Marin is a $9 million home. The one they still have in Sacramento is $3.8 million. And they didn't buy either One of them. So there's a lot of weirdness around the Newsoms lifestyle, including, remember during COVID I reported that they were caught taking a trip to Cabo San Lucas. Okay, whatever. It sounds like no big deal, except that they stayed in a $26,000 a night Dhaka.

[Armstrong]

$26,000 a night.

[Katie Grimes]

Yes. Owned by some Russian oligarch that was clearly gifted to them.

[Armstrong]

Well, you don't. You don't do that for nothing in return.

[Katie Grimes]

Exactly.

[Armstrong]

God, that's a w. That's. Now that's luxurious. I can't even imagine what that looks like. And then I think it was a California post. Had the story last week of the timing of so many of these appointments where somebody would give a bunch of money to Newsom, one of their nonprofits, and then two days later they'd get named the blah, blah, blah, blah, blah, blah.

[Katie Grimes]

Always. Yeah. There's a lot of quid pro quo going around and I'm sure all of it's being looked at, not just this is Newsom's nonprofits.

[Armstrong]

I am. I don't know if cynical is the right word. Might be. I feel like this happens so often and nothing ever comes of it. I just, I. My expectations for the people get away with this sort of crap over and over again.

[Katie Grimes]

Yeah, I know the frustration because I write a lot about it and I research a lot about it and we rarely anything happen. I think though, that there's so much of this garbage going on in California. I mean, the Somali fraud up in. In Minnesota is one thing, but boy, when that was discovered, those of us in California who are aware of fraud. Oh yeah, hold my beer. Watch what California does.

[Armstrong]

That is a great tease, Katie Grimes, because this is what I want to do. I want to take a break and come back and get into your story about the undercover LA raid that exposed California's multi million dollar welfare fraud. Tons of money being stolen. God, the fact that Mayor Mandani the other day put out that video. He said children go hungry in America, while Elon Musk's hunger only grows for more power and money. When you see all this money that's being stolen in the SNAP food programs. Unbelievable. Katie Grimes will explain it all to us. Coming up. Stay tuned.

[Katie Grimes]

Armstrong and Getty.

[Armstrong and Getty]

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[Armstrong]

Again, Mayor Mondani, his response to Trump for Fourth of July was this video he put out we need to talk more about later. He he mentioned all the kids going to bed hungry in this country. How awful it is. We have a trillionaire when kids are going to bed hungry. If your kid is going to bed hungry, you are not good at figuring out where the food is. Because for instance, in California the SNAP food program, the largest in the country, $12.5 billion. $12.5 billion. The SNAP food program for one state. Anyway, there's a lot of fraud going on. There was a raid Thursday, July 3rd. So the day before the 4th of July got lost in the news flow. That's why we have Katie Grimes on Today to tell us about it. Katie, what happened?

[Katie Grimes]

So this was a kind of multi agency raid. It was the U.S. department of Agriculture was involved, Homeland Security was involved, LAPD was involved and Assistant U.S. attorney Bill Aseli from the Central District in LA was involved and what was going on. So they did this big raid at a SNAP food stamp benefits store in skid row in la. And as we know, this is, you know, the Trump administration said they were going to crack down on fraud in general, but, you know, especially federally funded programs that are experiencing, we'll say, a lot of fraud like this. And welfare fraud is one of the worst. As you said, we have $12.5 billion in our SNAP, which is food stamps program in California. 11% of the program's payments are fraudulent. They're issued in error, meaning there's either duplicates or they're people from out of state or out of the country. I mean, 11% fraud out of 12.5 billion is an awful lot of money.

[Armstrong]

God, I'd say.

[Katie Grimes]

Yeah. So, and this was just one of six raids on July 3rd. So what happened was, and the California Post exclusively reported this, they did an incredible job. Six stores were charged with selling SNAP food stamp benefits in exchange for cash, while they say another 27 stores were charged with exchanging SNAP benefits for all kinds of prohibitive items, meaning alcohol, beer vaping devices, et cetera. Part of the reason I thought that this was so interesting as well as progress is that our California budget, 1/3 of it, is made up of federal funding. And I say this is why Gavin Newsom is losing his mind over federal funding cuts and why he and our Attorney General Rob Bonta continue suing the Trump administration over these, a lot of these funding cuts. But what's even more interesting is almost four in five federal dollars that flow through our budget currently right now support Health and Human Services. So it's all this low income food stamp, welfare, you know, the multi layers of programs. And those are the ones that the Trump administration is looking at for fraud. And you mentioned Doge earlier. Remember when Elon Musk and his Doge team had been at it for a few months, he came out and said he thinks that half of his federal budget was fraud. And if we could just uncover and expose and get rid of all the fraud, that Americans wouldn't have to pay income taxes.

[Armstrong]

Right.

[Katie Grimes]

That tells you how bad it is.

[Armstrong]

Right? It's depressing. It is just depressing. Again, my belief that will make much headway in eliminating this fraud is not very high, which maybe I'm too cynical, but like you said, we saw what happened in Minnesota, in California was like, hold my food stamps and went even bigger. So the reason people want to exchange their SNAP stuff for cash is so that you can buy, because you're not supposed to be able to buy cigarettes and pop and Vape pens and everything else with SNAP benefits.

[Katie Grimes]

Exactly, exactly. We did a story in June on a federal report that was issued by the US Department, Department of Health and Human Services, and it revealed. This is stunning. California receives 80% of all of the federal funding for illegal immigrant families, which is also part of this welfare money.

[Armstrong]

Wow.

[Katie Grimes]

So in the entire country. Yeah, so in the entire country, California gets 80% of it. So naturally, the federal government is looking at California and number one, why we're getting so much. And it shouldn't be going to illegal immigrants, but it does. And you know how much of that is fraud in addition.

[Armstrong]

So those of you who are listening across the country don't live in California. You have a reason to care about this. Other states, other people who live in other states. Because, you know, we, we live in California and in theory vote for this crap. I don't vote for it, but enough people do. But the federal dollars, those who live in other responsible states, you should be very angry at California for wasting your money.

[Katie Grimes]

Yeah, I totally agree. And especially when you hear Gavin Newsom, you know, boasting that California sends more to the federal government than it takes. All of these numbers that I just shared with you prove that that's total bs. We're taking a lot more than we're creating.

[Armstrong]

I wish I had the time to do this because I was really angry about Mamdani's speech the other day where he had that line about kids go to bed hungry in this country, while Elon Musk only hungers for more money and power, like there are so many different programs at every level of your city, county, and state and federal money, then you're just not trying very hard to get food for your kids.

[Katie Grimes]

Yeah, I agree. And for the politicians that continually shriek about our children are going to bed hungry. If you've walked by a California elementary school anytime recently and you'll notice that the majority of the kids are overweight.

[Armstrong]

Yeah, yeah, yeah, yeah. That is, that is something. We'll keep on covering the fraud. I mean, at least we can scream about it. I don't. Like I said, I'm not optimistic that anything good will happen. But that is absolutely amazing. 11% of 12 plus billion dollars we know is wasted. And it could be more than that.

[Katie Grimes]

Yeah, it's. It's disheartening, definitely. But yes, I will definitely stay on this.

[Armstrong]

Thank you. Katie Grimes, the editor in chief of the California Globe Appreciat. Appreciate your time today. Um, those stories are just so dang maddening and explains how you can walk by somebody on the street who looks down and out, but they got an iPhone and they, they're, they're getting by, they're doing all right. We've got so many different programs with so much money sloshing around and then you can trade in your, your government card or whatever you have so you can buy booze and cigarettes and vape pens and whatever the heck you wanna buy. It's just so depressing. You get up and go to work every day to try to earn money. You have to give over way too much to the government and then it gets wasted on this crap. Children going to bed hungry at night while Elon Musk only hungers for more power and money. You freaking socialist in your line of crap. I got more on that coming up a little bit later. I will get to. Drives me nuts. We're at war with Iran again. I don't know if you're following the news in the last 24 hours. Trump said the MoU, the ceasefire, that whole thing is over. We'll play that for you. That all happened while you were asleep last night. And that's a pretty big deal if the war is back on. We talked to Mike Lyons about that earlier. I'll summarize a little bit that, a little bit of that when we come back. Next. Trump is meeting with NATO right now and there's been news made since we went on the air today. We'll have the very latest. If you miss it, get the podcast Armstrong and Getty on Demand.

[Armstrong and Getty]

Armstrong and Getty Summer is here at Orderly Meds. We know this time is a reminder that life is full of new beginnings. Whether you're celebrating the nice weather, starting a new chapter, planning a vacation, or simply looking ahead to what's next, this season can be the perfect time to invest in yourself and your health. If you've struggled with weight loss and are curious about GLP1 medications and orderly meds can help you learn about your options. Through a simple virtual process, you can connect with licensed medical professionals who can determine whether treatment may be appropriate for you. Getting started is fast, convenient and happens online from the comfort of home. This summer, consider a new approach to feeling your best. Visit orderlymeds.com podcast to learn more. That's orderlymeds.com podcast orderlymeds.com podcast because every new season is an opportunity to take the next step forward, compounded medication applications are not FDA approved, eligibility required and determined by a licensed provider. Individual results may vary. See website for details.

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[Armstrong and Getty]

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[Katie Grimes]

Your bill, ladies.

[Armstrong]

I got it.

[Katie Grimes]

No, I got it.

[Armstrong]

Seriously, I insist.

[Katie Grimes]

I insisted first. Oh, no.

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[Armstrong]

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[Glenn Washington]

Okay.

[Katie Grimes]

Rock, paper, scissors for it. Rock, paper, scissors.

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Shoot.

[Armstrong and Getty]

No.

[Armstrong]

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