Gov. Tim Walz announced Friday the creation of a new statewide fraud prevention program and the appointment of Minnesota’s first fraud czar as the national media coverage intensifies over repeated fraud schemes tied to state public programs, many of which have involved members of the Somali community.
Walz named Tim O’Malley — the interim chief judge of the Minnesota Court of Administrative Hearings and a former Minnesota Bureau of Criminal Apprehension superintendent and FBI agent — to oversee the new effort.
The move comes years after the unraveling of the $250 million Feeding Our Future scheme — the largest pandemic-related fraud case in the nation — and as investigations continue into fraud involving Housing Stabilization Services and Medicaid billing tied to autism centers.
Autism-related claims alone billed to Minnesota Medicaid exploded from $3 million in 2018 to $399 million in 2023, according to reports.
In August, the Minnesota Department of Human Services shut down Housing Stabilization Services — a Medicaid-funded housing assistance program — after state leaders said widespread fraud had overtaken the program
Creation of new oversight role
O’Malley, who previously served as BCA superintendent under former Gov. Tim Pawlenty and later worked with the Archdiocese of St. Paul and Minneapolis in addressing the clergy abuse scandal, said the assignment is not political and emphasized his independence from the governor.
“I do want to offer two thoughts … one is an observation and one is a point of clarity,” O’Malley said. “The observation is the obvious one — no one has any tolerance for fraud … it erodes trust and must be addressed … Minnesotans deserve to know that their tax dollars are being put to good use … we have work cut out for us to rebuild that trust.”
He added, “The point of clarification … know that I’m not here to serve [Walz], I’m not here to serve any individual, and I’m not here to serve a political party. I’m here to serve Minnesotans.”
O’Malley said Walz assured him “that all of us have the freedom and autonomy to act to do whatever is necessary to solve this.”
Walz acknowledges issues with ‘communication’ failures, state’s ‘generosity’
Walz framed Friday’s announcement as part of a longer effort to address fraud while conceding shortcomings in how his administration has handled public messaging.
“I will acknowledge … I don’t think we’ve done a good enough job of communicating the hard work that’s been done and that undermines state employees,” said Walz.
Walz defended his record, saying, “I have seven years of proving this — I just fix these things,” and then referenced the troubled Minnesota Licensing and Registration System (MNLARS), adding, “we shouldn’t have gone through 10 years of trying to get a licensing system, but once we got there … we fixed it.”
🚨WATCH: Gov. Tim Walz is again asked if he takes responsibility for fraud in Minnesota: "I also note to folks the one airport that has remained on time is Minneapolis-St. Paul. I take responsibility for that." pic.twitter.com/o3IwwwoWRc
— Anthony Gockowski (@AntGockowski) December 12, 2025
The governor framed the state’s openness as a virtue that was exploited — a familiar ‘Minnesota nice’ argument that critics say has too often been used to explain, rather than prevent, large-scale abuse of public programs.
Walz said Minnesota’s “generosity has been taken advantage of by an organized group of fraudsters and criminals,” arguing that the state’s “long standing high standards of integrity of public funds go hand in hand with a culture of generosity.”
“You can’t have one without the other,” he said.
Walz addresses Somali community, shifts blame to ‘white men’ for most crime
Walz also addressed questions about fraud tied to Minnesota’s Somali community, saying the group should “maybe educate their population” on why it’s wrong to commit crimes so they don’t become “victims.”
“I think we continue to educate folks about why they shouldn’t commit crimes — you would hope that it’s being taught both at home and at schools and in our society — but no, I think this idea that the Somali community is to blame for this because they didn’t do more, I think that’s how we got into this,” Walz said.
He added, “I think for the [Somali] community to maybe educate their population because I think what you’re seeing here is there are secondary victims in this … that there’s providers inside the community that are then victimizing the community by signing them up … some of these people, they’re like ‘I had no idea I was in this program.’”
Walz shifted focus to “white men,” saying fraud is not unique to any one group.
“There’s a lot of white men who should be holding a lot of white men accountable for the crimes that they have committed,” said Walz. “The majority [of crime] being committed [is] by white men.”
House GOP, gubernatorial candidates respond
Republican leaders at the Capitol criticized Walz’s announcement, arguing the new fraud prevention office adds bureaucracy without addressing accountability for past failures.
“After burying his head in the sand about fraud for nearly two full terms, the governor has suddenly decided someone should do something about it,” said House Speaker and gubernatorial candidate Lisa Demuth, R-Cold Spring. “This move is too little, too late. He failed to root out fraud in his agencies, he failed to hold anyone accountable, he failed to take responsibility for what he allowed to happen, and now he wants to sweep all his failures under the rug. The time for program integrity was years ago — now it’s time for accountability.”
House Republican Floor Leader Harry Niska, R-Ramsey, tied the announcement to political pressure facing the governor.
“For nearly a decade, Tim Walz lost billions of taxpayer dollars to fraud and has done nothing to stop it,” Niska said. “Now, with an election fast approaching and fraud his most serious political vulnerability, the governor is scrambling to paper over his epic failures. Minnesotans understand the timing and see this for what it is: a political calculation meant to save face.”
Republican gubernatorial candidate Rep. Kristin Robbins, R-Maple Grove, also responded to the announcement in a brief statement: “The Walz fraud prevention program should be his resignation.”
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.
