OPINION:
Another shoe has dropped in the ongoing fraud scandal in Minnesota.
On Monday, a report released by the House Oversight and Government Reform Committee concluded that the governor and attorney general of Minnesota overlooked years of warnings about as much as $9 billion in Medicaid-related fraud and an additional $300 million in federal child nutrition fraud.
In addition, the report raised concerns that these two elected officials and their staff retaliated against whistleblowers and misled the public about their knowledge of the fraud.
The report is revealing.
Senior officials in Gov. Tim Walz’s office and Attorney General Keith Ellison’s office “were aware of credible, systemic fraud concerns in social services programs as early as 2019 within the Minnesota Department of Human Services (DHS) and by April 2020 within the state Department of Education, despite later public statements by Governor Walz suggesting otherwise,” the report said.
“Minnesota state agencies had clear authority to suspend or stop payments to providers suspected of fraud without requiring independent direction from courts, law enforcement agencies, or the federal government, but failed to act.
“In the case of fraud by non-profit Feeding our Future (FOF), the Minnesota Department of Education (MDE) continued payments even after identifying serious program deficiencies. Continuing payments were a voluntary state action and not responsive to any court order to resume payments. The state’s decision to continue payments allowed hundreds of millions of taxpayer dollars to continue going to fraudsters for another eight months until the Federal Bureau of Investigation (FBI) executed a search warrant at FOF’s offices.
“Litigation threats and fear of accusations of discrimination, not legal or regulatory barriers, were repeatedly cited by state officials as the reason for continued funding of entities suspected of fraud.
“Despite Governor Walz’s claims, law enforcement agencies, including the FBI, never directed Minnesota state officials to continue payments to Feeding our Future or other suspected fraudulent providers.”
This is particularly damning, as it suggests a cover-up of the fraud.
Mr. Walz’s administration retaliated against employees who tried to raise concerns, going to great lengths to keep them quiet, including intimidation through regular check-ins with high-level agency officials and threats of surveillance.
“Concern among senior officials within DHS only arose after they recognized it would receive negative media attention.
“In 2023, the Department of Homeland Security (DHS) and the attorney general’s office removed some providers enrolled in Medicaid services and worked with FOF before any fraud convictions. Otherwise, Minnesota officials were hesitant to stop payments and disenroll providers from services without a final legal determination of fraud.”
Overall, an estimated $300 million in federal child nutrition funds and potentially $9 billion in Medicaid-related funds were lost or are at serious risk after the alleged fraud and mismanagement.
Tony Lourey, a former Minnesota Department of Human Services commissioner, testified that he briefed Mr. Walz’s chief of staff, Chris Schmitter, in early 2019 about fraud in the Child Care Assistance Program and the Non-Emergency Medical Transportation Program.
Mr. Lourey said the fraud was so serious that the issue threatened to delay passage of the state budget.
Furthermore, Mr. Lourey testified to investigators for the House committee: “There was a broad awareness, in order to get a budget through the legislature, these issues needed to have broad bipartisan agreement that we have the tools and authority needed to run programs properly and avoid fraud.”
It was also clear that the Walz administration was trying to prevent people from investigating the allegations of fraud. The report states: “Whistleblowers experienced retaliation for reporting waste, fraud, and abuse. A MDE whistleblower who raised concerns to the FBI told federal investigators that she was ’hand slapped’ by management for looking into fraud. Whistleblowers were concerned that when they reported fraud concerns to the DHS Office of Internal Audit or the DHS OIG, it would automatically go to the DHS Commissioner or Human Resources who would then retaliate against these employees.”
More incriminating information emerged from other federal investigations, as the report concluded.
“While Governor Walz and Shireen Gandhi claim that whistleblowers are important to DHS and the State protects whistleblowers, the U.S. Attorney’s Office in Minnesota under then-U.S. Attorney Andrew M. Luger told the Walz Administration that their frontline employees did not feel comfortable coming forward with fraud concerns. Chris Schmitter testified that this conversation — where the Governor was present as well — occurred in early 2025, years after DHS employees started bringing up concerns about fraud and retaliation to agency leadership and the Governor’s Office through email.”
Thankfully, Vice President J.D. Vance announced that he is referring Messrs. Walz and Ellison to the Justice Department for a criminal fraud investigation involving federal dollars sent to social service programs. That is a start.
Many of us are concerned that Mr. Walz and his allies tried to divert attention from the fraud investigations by instigating chaos against federal agents in Minnesota earlier this year. The new report clearly shows that there is far more to the scandal.
Everyone involved must be held legally accountable for their actions.
• Scott Walker is a columnist for The Washington Times. He was the 45th governor of Wisconsin and launched a bid for the 2016 Republican presidential nomination. He lives in Milwaukee and is the proud owner of a 2003 Harley-Davidson Road King. He can be reached at swalker@washingtontimes.com.
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