Public Service on Probation

By Chuck Gallagher — business ethics keynote speaker and AI speaker and author

A Story of Broken Trust

Imagine a person in public service, paid by the community, entrusted with helping the vulnerable and managing complex systems. Now imagine that same person turns around and collects unemployment benefits from the very state they’re paid by—claiming they’re out of work, when in fact they’re still clocking a county paycheck. That betrayal of trust lies at the heart of the recent case involving 13 employees of a major county organization.

From 2020 to 2023, while still on the payroll of Los Angeles County, these workers submitted fraudulent claims to the state’s unemployment system. Their combined alleged theft? More than $437,000. Even worse: they did this at a time when tens of thousands of Californians were legitimately struggling to make ends meet during the pandemic. ABC7 Los Angeles+2LAist+2

How It Happened

The prosecutors allege each employee submitted claim forms stating their weekly earnings were under the legal threshold—despite being full-time (or part-time) county employees receiving paychecks. Los Angeles County+1
The alleged misconduct spanned multiple county agencies—including the Departments of Children and Family Services, Public Social Services, the Sheriff’s Department, and the County Auditor-Controller. Los Angeles County+1
The amounts taken by individuals ranged from roughly $9,300 up to nearly $58,000 each. Los Angeles County+1
Only some of the instances could be prosecuted because of the statute of limitations; investigators identified upward of 172 incidents, but many fell outside the four-year legal window. NBC Los Angeles+1
The district attorney’s office made clear: “When a civil servant steals from the government, that trust is broken.” LAist+1

Why This Matters for Ethics and Leadership

Public servants carry heightened responsibility.

The higher your role in government, the greater the expectation of integrity. These cases aren’t simply theft—they’re betrayal of public trust. When someone in service to the community defrauds that community, the ethical damage is deep.

When incentive structures remain unchecked, misconduct breeds.

These employees apparently treated their county payment and unemployment claim as separate lines—even though by law they were not eligible. This shows how systems and incentives can misalign behavior if not audited and governed.

Culture and tone matter most in public service.

In organizations where employees feel accountability is lax and oversight weak, the temptation to shortcut ethics grows. Leaders must ask: What do we reward? What do we punish? What messages are implicitly sent when rules aren’t enforced?

Transparency and consequence build trust—failure erodes it.

Prosecuting these cases is essential, but more important is creating a prevention mindset. Trust is harder to rebuild than rules are to write. Organizations must cultivate it proactively.

What Leaders Should Do Now

Audit internal claim-and-pay systems. Especially in large employee bases or during crisis response environments, check for parallel tracks: payroll vs benefits eligibility.
Strengthen cross-system data links. For public and private organizations alike: when someone still receiving compensation claims unemployment or benefits, automatic flags should exist.
Establish a visible whistleblower and oversight channel. Several of these cases emerged from tips. Make speaking up safe, trusted and rewarded.
Lead with public ethics messaging. If your team serves the public, remind them daily: Integrity isn’t optional—it defines how we serve.
Set measurable metrics for ethical performance. Beyond incident count, measure things like claims verification time, percentage of flagged cases, employee training uptake, culture survey results regarding fairness.

Final Thought

The case of these 13 county employees is more than a criminal episode—it’s a leadership warning. In the public sector especially, ethical failures don’t just cost money—they cost faith. For any executive, board member, compliance officer or public-service leader, the question should not be Could this happen? but Are our systems and culture so strong that it can’t?

If you lead an organization, ask yourself: when someone in your team steps outside the rules—in the quiet, untested moment—would you find out quickly? And if you did—would the consequences be clear, consistent, fair? If the answer is uncertain, you have work to do.

Call to Action

This week: convene your leadership team and ask: What controls do we have to prevent someone from receiving payments for two mutually exclusive statuses (employed/on payroll vs unemployed/benefit recipient)? Then pick one enhancement to implement within 60 days.

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