Ro Khanna calls for fraud probe after California wealth tax firestorm

California Democrat Rep. Ro Khanna says he has a solution for Silicon Valley elites angered by his embrace of a wealth tax: Tackling fraud.

Over the weekend, Khanna came under fire from some donors and allies in the tech industry after he endorsed a wealth tax. Labor groups in California are trying to add a proposal for a statewide tax on billionaires to the November ballot, prompting some wealthy Californians to warn they will leave the state if it passes and support a primary challenger to Khanna in next year’s elections.

In an interview with CNBC, Khanna, who represents Silicon Valley, said he’s launching a bipartisan effort from his post on the House Oversight and Government Reform Committee to root out state-level fraud to ensure the new tax windfall doesn’t go to waste. The effort, he said, will make sure that funds go toward health care and other essential services.

“If you want, as I do, to advocate for Medicare for all, to advocate for higher taxes, you have to have the public trust,” Khanna said. “People need to have a receipt for what their money is going towards. You can’t have corruption in the government and waste in the government and then expect people to support the progressive ideals that I have.”

Khanna said he will find someone on the other side of the aisle to work with on the issue, similar to his recent partnership with Rep. Thomas Massie, R-Ky., that compelled the release of files relating to notorious sex offender Jeffrey Epstein. Khanna said he hopes to commission a bipartisan Government Accountability Office report on state-level fraud and hold hearings on the issue.

Khanna’s pitch comes after the California State Auditor released new reports that identified potential fraud in the state. Meanwhile, alleged fraud cases in Minnesota, some leading to indictments first handed down in 2022, have also seen renewed national attention from Republican lawmakers and the Trump administration. 

Many who criticized Khanna’s endorsement of a wealth tax cited those instances of fraud as a reason that the tax won’t work.

“If, after audits and zero based budgets, there are revenue gaps, I’d support a wealth tax,” said Chamath Palihapitiya, a prominent tech investor and Trump supporter, in a post to X. “Until then, you and your ilk are just getting more incentives for fraud, voter manipulation and larceny.”

Khanna noted that his new oversight effort is in response to “feedback from constituents in my district and leaders,” over his embrace of a wealth tax.

He added that the investigation will cover more than just the fraud uncovered in California…