A congressional investigation into Minnesota’s exploding fraud scandals delivered a stunning — yet to many, unsurprising — conclusion: senior state officials were aware of widespread fraud for years but only appeared to become seriously concerned once they feared the scandal would become a public relations disaster.
“Concern among senior officials within DHS only arose after they recognized it would receive negative media attention,” the House Committee on Oversight and Government Reform wrote in its executive summary released Monday.
That finding was part of the committee’s 205-page report that describes years of state inaction under Gov. Tim Walz and Attorney General Keith Ellison while billions in taxpayer-funded fraud allegedly flourished across Minnesota social service programs.
“The Committee’s investigation found that senior officials in Minnesota state government, including Governor Walz and Attorney General Ellison, were aware of widespread fraud in federally funded social services programs for years, possessed the legal and procedural authority to stop payments and ban fraudulent providers from participating in these programs, but repeatedly failed to act,” the report states.
The report, titled “The Cost of Doing Nothing: How Tim Walz and Keith Ellison Fueled Minnesota’s Fraud Explosion,” alleges that state leaders became more alarmed about political fallout and media scrutiny than the fraud itself.
“The Walz Administration was more concerned about getting ahead of media reports about fraud than rooting out actual fraud to protect taxpayer dollars,” the report says.
The committee wrote that billions in taxpayer dollars were potentially lost while “vulnerable populations were harmed and whistleblowers were ignored, sidelined, and retaliated against.”
Investigators also concluded that “litigation threats and fear of accusations of discrimination” were repeatedly cited by officials as reasons for continuing payments to providers suspected of fraud.
Officials allegedly knew for years
According to the executive summary, officials in Walz’s office and Ellison’s office “were aware of credible, systemic fraud concerns” involving Department of Human Services programs as early as 2019 and within the Department of Education by 2020.
The report says Minnesota agencies had the authority to suspend payments and remove providers suspected of fraud without needing permission from courts or federal law enforcement agencies.
Despite that, investigators found the state repeatedly failed to use its authority and “payments continued long after credible signs of fraud emerged.”
In the Feeding Our Future scandal, the committee said the Minnesota Department of Education continued making payments despite identifying serious warning signs.
“Continuing payments were a voluntary state action,” investigators wrote.
The report states those payments continued for another eight months until the FBI executed search warrants on Feeding Our Future offices.
Whistleblowers allegedly retaliated against
The congressional investigation also paints a troubling picture of how employees who raised concerns were treated inside state government.
“Instead of trying to stop widespread fraud, Governor Walz’s Administration retaliated against employees who tried to raise concerns,” the report states.
According to investigators, employees faced intimidation tactics, including frequent monitoring by senior agency officials and threats of surveillance.
The report repeatedly suggests the state’s priority became avoiding political embarrassment rather than immediately shutting down suspicious providers.
The committee estimates approximately $300 million in federal child nutrition money was lost through the Feeding Our Future fraud scheme alone.
Investigators further warned that an additional $9 billion tied to Medicaid-related programs may have been lost or placed at serious risk through fraud vulnerabilities in Minnesota’s social service system.
The executive summary also states that some fraudulently obtained money “likely funded international terrorist networks among other bad actors” in Somalia and the Middle East.
Late last year, Alpha News senior reporter Liz Collin spoke with former Transportation Security Administration agent Liz Jaksa, who described repeatedly encountering Somali men carrying suitcases packed with large amounts of cash through Minneapolis-St. Paul International Airport.
“Knowing what I know now, absolutely. There’s no question in my mind that that money went to al-Shabaab. It’s been uncomfortable because at the time, it just seemed like more should be done. It wasn’t a one-time thing. It was a constant thing,” Jaksa said.
Emmer blasts Walz, Ellison over report
House Majority Whip Tom Emmer criticized Walz and Ellison following the release of the findings, accusing both men of helping create conditions that allowed massive fraud schemes to flourish.
“Fraudsters may be holding the smoking gun, but Tim Walz and Keith Ellison handed it to them, locked and loaded,” Emmer said in a statement Monday.
“The great work of the Oversight Committee confirmed what we all know to be true: Walz and Ellison created the perfect conditions for fraud and then knowingly looked the other way while hardworking taxpayers, disabled Americans, and hungry children were robbed blind,” Emmer continued. “Untold billions have been stolen, and make no mistake, my state’s so-called ‘leaders’ are on the hook.”
The findings also parallel themes explored in Alpha News’ latest documentary “Minnesota Mao.” For more information, visit Alpha News’ “Fraud in Minnesota” page.
Jenna Gloeb
Jenna Gloeb is an Edward R. Murrow Award-winning journalist, media producer, public speaker, and screenwriter. Most recently, she worked as a reporter and on-air host for CCX Media. Jenna is a Minnesota native and resides in the Twin Cities with her husband, son, daughter, and two dogs.
