The Truth with Lisa Boothe: California Fraud, DEI Spending & $100B Government Waste EXPOSED

Summary

Podcast Summary: The Truth with Lisa Boothe

Episode: California Fraud, DEI Spending & $100B Government Waste EXPOSED
Date: March 24, 2026
Host: Lisa Boothe
Guest: Chris Rufo, Senior Fellow at the Manhattan Institute

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Episode Overview

This episode plunges into the heart of California’s massive government spending issues, focusing on “woke waste,” government fraud, and the broader implications for taxpayers—particularly as Governor Gavin Newsom eyes a 2028 presidential run. Lisa Boothe is joined by Chris Rufo, who unpacks his investigative reporting on California’s out-of-control public project costs, DEI (Diversity, Equity, Inclusion) funding diversions, and the inefficacy of progressive governance in the state’s largest cities.

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Key Discussion Points & Insights

1. Why Government Fraud in California Flies Under the Radar

[04:05–05:29]

• Complexity & Detection: Fraud is often overlooked because it’s difficult to detect amid billions of documents and sophisticated criminal networks exploiting the system.
• Political Incentives: California’s political class benefits from fraud, allowing unions and politically-connected groups to profit.
  • Quote: “Everyone is getting their cut and federal taxpayers are footing the bill. And so it really feeds into this cycle of corruption that doesn’t incentivize actually enforcing the law…” —Chris Rufo [04:20]

2. Case Study: $114 Million Wildlife Overpass

[06:15–10:05]

• Project Overview: A wildlife bridge connecting two areas of LA, intended for cougars, critters, and monarch butterflies. Partnered with the Annenberg Foundation, but majority-funded by taxpayers.
• Comparative Waste: Similar bridges elsewhere cost $5–10 million, but California’s project is $114 million and a year overdue.
• Ideological Spending:
  • Funds diverted to non-essential items: sacred Native American rituals, offerings of human hair, tobacco, and other “ideological nonsense” instead of focusing on timely, efficient completion.
  • Quote: “…just loading this project with this kind of ideological nonsense. And that’s why it’s a year behind, it’s tens of millions of dollars over budget, and really there’s no end in sight.” —Chris Rufo [07:31]
• Taxpayer Awareness: Most residents have no idea how much is being spent or on what. Local media’s lack of scrutiny allows waste to go unnoticed.
  • Quote: “I drive under this bridge every day to and from work… I didn’t know what they were doing. I didn’t know how much it cost… That nobody was looking.” —Chris Rufo [08:31]

3. Funding and Political Connections

[10:05–12:18]

• Financing Structure: Public-private partnership; $77M from California, rest from private donors. Still, public funds vastly exceed industry norms.
• Political Favoritism:
  • State contracts routinely loop back to benefit Newsom’s political backers through a “circular pattern.”
  • Quote: “…Gavin Newsom will award a contract… and then those entities will funnel money back into the state Democratic Party…” —Chris Rufo [11:10]

4. Implications for Newsom’s Presidential Ambitions

[15:12–17:07]

• 2028 Run: Discussion on whether California’s waste and fraud will matter nationally.
  • “California voters, it appears that they do not care if things are being efficiently run… Do national voters care more than California voters?” —Chris Rufo [15:35]
• States with more “cost-conscious” voters (Iowa, NH, FL, TX) may be more attuned to this kind of government waste.

5. Why Blue State Voters Don’t Demand Fiscal Accountability

[17:07–20:21]

• Ideological Loyalty:
  • Many progressives see party identification akin to religious identity—reluctant to criticize their own “in-group.”
  • Politicians exploit these loyalties, deflecting scrutiny using “Trump derangement” or unrelated attacks.
  • Quote: “If you look into this fraud too closely, if you lose your faith in Democrats, that means you love Donald Trump…” —Chris Rufo [19:29]

6. DEI Spending: San Francisco’s $120M Police Fund Diversion

[20:21–23:15]

• Dreamkeeper Initiative:
  • Launched after George Floyd’s death; redirected $120M from law enforcement to black nonprofit groups.
  • Immediate fallout: “Fraud, misuse… director now under criminal indictment…”
• Program Details:
  • Grants to groups offering “mystical” healing, such as “mayat healing” (ancient Egyptian rituals), and exclusive services for black residents, including massage therapy for black female criminals.
  • Funding for DEI storytelling, including documentaries on black transgender pregnancies.
• Legal Issues: Such explicit racial exclusivity violates the Civil Rights Act.

7. Continued Misallocation Despite Criticism

[24:33–26:29]

• No Political Will to Reverse Course:
  • Even “moderate” new mayor Daniel Lurie, who criticized wasteful DEI programs, quietly revived them under pressure from activist groups.
  • Quote: “If he really shut down this program forever, he would be immediately barraged by local black elected officials, by the local NAACP…” —Chris Rufo [25:23]
  • Waste is simply “part of doing business” in contemporary San Francisco politics.

8. The Scale of the Problem

[26:35–27:36]

• $100 Billion in Fraud:
  • Rufo estimates “the minimum floor is likely $100 billion” in fraud under Newsom, aggregating across Medicaid, unemployment insurance, and welfare programs.
  • Implication: The scale of waste is equivalent to the GDP of many countries.
  • Quote: “Greater than the GDP of most of the countries around the world is just stolen from California taxpayers.” —Chris Rufo [26:57]

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Notable Quotes & Memorable Moments

• On “Woke Waste”:
  • “They were just loading this project with this kind of ideological nonsense. And that’s why it’s a year behind, it’s tens of millions of dollars over budget, and really there’s no end in sight.” —Chris Rufo [07:31]
• On Blue State Voter Attitudes:
  • “If they were to actually question the ruling party of their state, it would be like, you know, leaving your religion.” —Chris Rufo [18:19]
• On Political Tactics:
  • “All they did was say, Donald Trump is an evil person… It’s a complete non sequitur, complete, you know, internally inconsistent and incoherent argument… But that’s actually persuasive…” —Chris Rufo [19:05]
• On Fiscal Scale:
  • “The total fraud under the Newsom administration, the minimum floor is likely $100 billion.” —Chris Rufo [26:43]
• Sarcasm on DEI Justice:
  • “Maybe if the criminals get massages, they’ll be more relaxed and not want to commit crimes.” —Lisa Boothe [24:33]

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Timestamps for Important Segments

• Fraud in California & Political Incentives: [04:05–05:29]
• $114M Wildlife Overpass Breakdown: [06:15–10:05]
• Political Connections & Funding Loops: [10:57–12:18]
• Newsom’s Political Immunity & 2028 Outlook: [15:12–17:07]
• Blue State Voter Psychology: [17:07–20:21]
• San Francisco DEI Spending Scandal: [20:21–23:15]
• Political Inertia and DEI Programs’ Comeback: [24:33–26:29]
• $100 Billion Waste Estimate: [26:35–27:36]

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Conclusion

Lisa Boothe and Chris Rufo deliver an incisive critique of California’s government spending, uncovering how entrenched ideological agendas, political patronage, and public indifference foster a culture of waste and fraud at epic scale. Rufo’s reporting, featured in City Journal, exposes not just isolated instances of mismanagement, but a systemic, quasi-corrupt pattern under Governor Newsom’s watch—raising urgent questions for both California voters and the nation as 2028 approaches.

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Transcript

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[Lisa Booth]

Welcome to the Truth with Lisa Booth where we get to the heart of the issues that matter to you. Today I'm joined by Chris Rufo, senior fellow at the Manhattan Institute. He's done some really interesting reporting in the City Journal and we're going to dig into it. He is exposing some major woke waste in California, including a 114 million dollar wildlife overpass for mountain lions and butterflies that's overdue and over budget as expected in a state like California, particularly under Gavin Newsom. Plus, we'll talk about San Francisco's revival of a 120 million dollar program that diverted police funds, police funds and a questionable DEI initiatives now potentially facing legal risks as well. We're going to break down the facts, follow the money and explore the patterns under Gavin Newsom, his patterns of failure and also what does it mean for 2028 and his presidential ambitions. Stay tuned for a conversation about Wilk Waste with Chris Ruffo. Well, Chris Ruffo, it's great to have you back on the show. You do such great reporting, so appreciate you making the time.

[Chris Rufo]

It's great to be with you.

[Lisa Booth]

We've heard a lot about fraud, particularly in Minnesota, now California as well. You've done some original reporting that we're going to get into in just a moment. But why do you think all of this fraud gets overlooked so frequently?

[Chris Rufo]

Well, there are two reasons why the fraud gets overlooked. The first reason is pretty simple. Oftentimes fraud is difficult to detect. You have sophisticated criminal networks that are exploiting the government, billions of documents and kind of an infinite number of paper trails. And so the enforcement is not always as successful. It's hard to find. The second reason is more interesting though. The second reason is that California's political class benefits from the fraud. And so I'll give you an example for Medi Cal, which is the state Medicaid program. It spends something like $200 billion a year and a lot of that money goes towards the salaries and then the union dues for healthcare. The healthcare union in California is one of the most powerful unions in the state, huge backer of Democrats. And so everyone is getting their cut and federal taxpayers are footing the bill. And so it really feeds into this cycle of corruption that doesn't incentivize actually enforcing the law, but in fact it creates an incentive to just let the fraud happen.

[Lisa Booth]

Yeah, and we saw that even in Minnesota with the Attorney General Keith Ellison meeting with some of the fraudsters. You know, there was a meeting that the contents of the meeting leaked and they were basically like, you know, we need friends. And then shortly thereafter, they donated to him. So it's like, you know, unfortunately, it seems that, you know, so much of this fraud, to your point, is about enriching donors or giving kickbacks to, you know, politically aligned groups and friends and allies. So let's dig into some of the work that you've done recently in California with some of this woke rate, woke waste that we've seen. So there's this $114 million wildlife project. Walk us through. You know, what is it? What should people know?

[Chris Rufo]

Yeah, it's, it's kind of an amazing project where California environmentalists have, in partnership with the Annenberg Foundation, Annenberg family, very wealthy family in the state, and the state taxpayers kicked in the majority of the funding. They want to build a bridge connecting two areas of Los Angeles across a 10 lane freeway so that cougars, other critters, even monarch butterflies, can successfully cross the road. And look, actually, wildlife bridges are not a bad idea. They do help kind of environmental concerns. They help reduce actually roadway accidents because you have the animals that learn how to cross the bridge rather than go into traffic. But what's scandalous about this project in particular is that other states and other countries have completed these bridges for between 5 and $10 million. But in California, it costs $114 million to build this bridge for cougars and butterflies and other small animals. And we really dug into the question of why is this happening? Why does this bridge cost an order of magnitude more than other bridges that are comparable? And the answer was twofold. One is that a lot of the firms, these big California contractors, have no incentive to complete projects on time and under budget. But they also showered millions of dollars in public and private funds towards ideological projects. So for example, in this case, they were spending money, the private side was spending money to have Native Americans perform sacred rituals and to create offerings of human hair, native tobacco to collect seeds to bless the bridge. I mean, stuff that if you were running a major infrastructure project, you probably wouldn't put a priority on. They were just loading this project with this kind of ideological nonsense. And that's why it takes, it's a year behind, it's tens of millions of dollars over budget, and really there's no end in sight.

[Lisa Booth]

Like, are taxpayers even aware that this is where some of their money is going to?

[Chris Rufo]

They're not. Actually, one of the most interesting bits of feedback we got on this piece, which was kind of driving the headlines, certainly in California for a couple days last week, many people contacted me. They said, you know what? I drive under this bridge every day to and from work. So I'm seeing this bridge 10 times a week for the last three years. And I didn't know what they were doing. I didn't know how much it cost. I didn't know, you know, how ridiculous this waste of money turns out to be. And this is what's so interesting, is that in California, it's a left wing dominated state. The local press has been left wing dominated for many years. And even though this is a publicly accessible project, even though the documents are hidden in plain sight, nobody had actually taken the time to look into it, to figure out what was going on, to do the homework, to do the digging, to follow the paper trail. And so California residents have been shocked and scandalized by this news. But really what's shocking and scandalous is that nobody was looking. And what I think is certainly happening is that there are dozens, if not hundreds, if not thousands of these projects that are happening all over the state. And simply the graft, the fraud, the abuse, the waste is happening at a colossal scale because nobody is trying to hold the public officials and the political class in California accountable.

[Lisa Booth]

And is this state funded or is there money coming in from federal or where is the money coming from?

[Chris Rufo]

In this particular case, it was a public private partnership between California state, which put in $77 million, and a private donor who put in the remainder of the money. And so in one sense, that's good, right? It's good if you can get private donors to help with public projects or conservation work, et cetera. But what's not good is that even just the public portion, which was $77 million, is still about 10 times greater expenditure than comparable bridges in other states. And so as Californians, you have to be wondering, why is everything so expensive? Why are the tax rates so high? And the answer to both of those questions seems to be that a massive amount of California state budget is frittered away in fraud and abuse.

[Lisa Booth]

And do we know these groups that are involved, the firms? Are they connected to the Newsom administration? Is it, you know, like, is it political in nature? Is he sort of enriching his friends here? Or what do we know about that?

[Chris Rufo]

In many cases, yes. And so if you, if you just zoom out and you try to ask, you know, who are the largest state contractors, who are the largest beneficiaries of state funds? There appears to be in many industries in construction, in healthcare, government employment, in other, in other parts of the economy, this circular pattern where Gavin Newsom will award a contract to a firm or favorable terms to a kind of regulated utility or a sweetheart deal for the unions, and then those entities will funnel money back into the state Democratic Party, back into the governor's, you know, campaign funds, and then they will yield a benefit on the other side. And so we see that all over. And as I've looked into fraud in California in all of these industries, it really is the same pattern. And look, can you conclude therefore, that it's a quid pro quo, that it's direct corruption? No. But is it a form of legalized quasi corruption that's not in the best interest of taxpayers? The answer is a resounding yes.

[Lisa Booth]

Gotta take a quick commercial break. More with Chris on the other side. If you like what you're hearing, please share on social media or send it to your family and friends.

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[Lisa Booth]

As we look ahead to 2028, I mean, Stevie Wonder can see that, you know, Gavin Newsom is preparing for a presidential run. How much does this waste and this fraud, you know, there's obviously a lot of other instances in California besides just this one. How much of this do you think would haunt him heading into 2028? Like, do voters care if things are being done efficiently or not?

[Chris Rufo]

You know, California voters, it appears that they do not care if things are being efficiently run. It appears that they do not care if fraudsters steal tens of billions of dollars of their of their money. So the question is, do national voters care more than California voters care? I think the answer is at least at the margin. Certainly yes. Voters in cost conscious states like Iowa and New Hampshire and Florida and Texas certainly have prioritized fiscal issues more than California voters have in the past. But the real question, I think, is whether Gavin Newsom's kind of Bill Clinton like ability and Donald Trump like ability to skate through accusations and scandals and baggage that would sink any normal political candidate is that ability greater than the total fraud that has been committed under his watch? And as much as I would like to believe that voters would look at this rationally, they would see this fraud and they would say, this person is not a reliable steward of the public trust. You know, crazier things have happened, and I think we should not underestimate that. Gavin Newsom does have political talent. He does have a set of political skills, and he has that kind of Teflon quality that you find in politicians on both sides of the aisle that is a major asset in running a political campaign.

[Lisa Booth]

You know, what you'd mentioned, and then we'll get into San Francisco, I promise. But you had mentioned, you know, with some of these more like red states or fiscally conscious states like Iowa, that, you know, they'll care, I guess. Why do you think voters in blue states don't seem to care? I mean, they do keep electing these leftists who then just squander their money and then keep raising taxes and then drive rich people away, and then there's a depleted, you know, revenue base. So it's like, why do blue voters not seem to care as much about, you know, they seem to care about affordability, but they don't seem to care about their money being, you know, their money being, you know, politicians lighting their money on fire.

[Chris Rufo]

I think there's one kind of deep reason why that is the case, and California Democrats exploit it. And the reason is this. Voters are committed to all of the associated feelings, impressions, symbols and attitudes around being a good progressive or a good liberal or a good Democrat, and they're willing to turn a blind eye to an extremely large some of malfeasance because they really, truly want to believe that they are a good liberal. And if they were to actually question the ruling party of their state, they would, it would be like, you know, leaving your religion. Well, why do people, you know, stick with their religion if something, you know, X, Y and Z happens? Well, those bonds are actually really strong. And so they've clung to that identity and Democratic politicians exploit it. And so even in the case of this bridge story, Gavin Newsom comms team was feeling some heat for it. Other kind of state Democrats were feeling heat for it. And one thing I noticed was that they didn't address the substance of the critique at all. They didn't say, we're going to look into this, we're going to crack down on fraud, we're going to make sure that the next bridge is under budget and on time. All they did was say, Donald Trump is an evil person dragging us into war with Iran and he's covering up for, you know, Jeffrey Epstein and other, you know, elite pedophiles, like a complete non sequitur, complete, you know, internally inconsistent and incoherent argument. But what I notice is that that's actually persuasive for a lot of Democrats because they, the, the threat is quite simple. If you look into this fraud too closely, if you lose your faith in Democrats, that means you love Donald Trump. That means you love Jeffrey Epstein. That means you're, you know, an enabler for pedophiles, whatever stupid argument they're, they're proposing. And look, you can say this is a stupid argument rationally, but irrationally, California Democrats are so committed to that, that self identity that you can easily herd them back into the, into the gates, into the, into the corral just by, you know, dangling that talisman. Donald Trump. It's quite effective. And I think that's why you see Democrats that just kind of give up, they say, yeah, whatever, you know, it's a hundred billion dollars here, $100 billion there. You know, at least we, you know, at least we're not Donald Trump.

[Lisa Booth]

Truly bizarre. All right, so San Francisco. So you reported that 120 million was diverted from law enforcement into DEI initiatives. Walk us through that. Why did they do that? And then what were these DEI initiatives?

[Chris Rufo]

So this is an interesting story that's developed over time. It begins right after the death of George Floyd in 2020. And then mayor London Breed was under a lot of pressure to do something. And what she came up with was a program called the Dreamkeeper Initiative. And this would basically take $120 million out of the police budget and shower it onto black nonprofits. And this, you know, turned into an immediate debacle. There was fraud, there was misuse. The director of this program at the time is now under criminal indictment for potential misuse of funds, you know, alleged misuse of funds, rather. And in her last election campaign, which she lost under this media scrutiny, she paused the program. And her opponent at the time was the heir to the Levi Strauss fortune, a man named Daniel Lurie, who said, you know, London Breed opened up this spigot of wasteful funding. It's a complete scam. She's got to shut it down. And he won the election in part because he presented himself as the reasonable moderate. But now that Daniel Lurie is in office, he quietly restarted this program, which he formerly condemned, and now he's showering funds on these nonprofits. And so what we did was he looked into some of the funding, and he was funding one nonprofit with a massive grant that Specializes in what they call mayat healing, which is an ancient Egyptian healing ritual that they provide only and exclusively for black residents of San Francisco. There was another nonprofit that received some funding that specializes in providing healing services for intergenerational black female criminals and includes providing massage therapy for black female criminals. And then finally, a nonprofit that creates documentaries about black transgender people, including one documentary about two black transgender men going through their first pregnancies. And so these are the kind of things that. That are being taken away from the police budget and then redirected towards. Look, what I think, if you want to do this stuff on your. On your. Your own time and your own dime, fine. You do whatever you want. It's a free country. But I don't think it's a good use of public funds. And moreover, because many of these nonprofits restrict services explicitly and exclusively to black individuals, this program is actually illegal under the civil Rights act of 1964,

[Lisa Booth]

you know, well, so then, you know, do you think there'll be any ramifications for that?

[Chris Rufo]

You know, the story here that generated some coverage locally in San Francisco, but then disappeared into the ether. And I was asking myself this question, you know, what are we doing? We're taking money away from getting cops on the streets, enforcing the law, and we're redirecting it towards organizations that provide free massage therapy for black criminals. This doesn't seem to be rationally defensible, but I think what's happening is that it's. San Francisco voters have become so desensitized to this, it's become ingrained in their way of thinking that even a relatively moderate Democrat mayor like Daniel Lurie feels that voters really want this. They expect this. And he's going to get a lot of criticism, a lot of pressure, and maybe he'll be accused of being a racist if he doesn't go along with the program. And so he criticized it during the campaign. He's backing it to the hilt now. This is just the way things are. I think it's important for us to expose it nationally. But the idea that we're going to change it locally, I don't see it.

[Lisa Booth]

I mean, maybe if the criminals get massages, they'll be more relaxed and not want to commit crimes.

[Chris Rufo]

That's a theory. I think we should probably test it, see if that's actually true. In my experience, a massage feels great. You're relaxed for a couple hours afterwards. But fundamentally, you are who you are. And so I don't see it as a durable strategy for reducing criminality. But you know, crazier things have happened.

[Lisa Booth]

Fair enough. Now, has Laurie given any reasoning as to why he restarted this program?

[Chris Rufo]

He has. And so, you know, they have some statements to the press, some materials that is his administration has released. And it's the same boilerplate. San Francisco wants to make sure that we're taking care of the black community. San Francisco wants to take steps towards reparations. San Francisco wants to be a pioneer in transgender black causes. I mean, all of those. The mindless repetition of progressive sloganeering ends up in the official materials of the Lurie administration. And look, do I think that Daniel Lurie himself, if you talk to him privately, you said, hey, taking money from the police and then, you know, transgender black criminal massages, Is this a good idea? My suspicion is that he would actually say no, but politics is politics, and this is just what people expect. If he really shut down this program forever, he would be immediately barraged by local black elected officials, by the local naacp, by the local black nationalist organizations. And so I think what a lot of times this comes down to is a pragmatic calculation. You know what? I give up on this because I want to make progress on other issues. Release the funding to the ancient Egyptian healing rituals. It's not all going to get caught. Some waste is just part of doing business.

[Lisa Booth]

And people can go find all this in the City Journal. Chris, is there anything else you'd like to leave us with before we go?

[Chris Rufo]

Yeah, some upcoming stories. So, look, we're looking into this California fraud in all facets of governance. And what we're finding is that the total fraud under the Newsom administration, the minimum floor is likely $100 billion. And so some of these. Some of these things are 100 million here, 100 million there. But on some of the programs, like state Medicaid, state unemployment insurance, state welfare services, the numbers start aggregating and adding up into, you know, greater than the GDP of most of the countries around the world is just stolen from California taxpayers. And so this stuff is coming. We're reporting on it. It's important, and I hope that it changes the political calculus, not just in the state of California, but, as you said, the political calculus for 2028, so that the voters are totally informed of what's happening when they go back to the ballot box.

[Lisa Booth]

Well, we will see, and it will certainly be interesting as we get closer to 2028. Chris Ruffo, as always, amazing work. Always so interesting having you on. Really appreciate you making the time.

[Chris Rufo]

Thank you.

[Lisa Booth]

That was Chris Rufo. Appreciate him for making the time to come on the show. Appreciate you guys at home for listening every Tuesday and Thursday, but you can listen throughout the week. I also want to thank John Cascio, my producer, for putting the show together. Until next time.

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