A bombshell House Oversight report alleges Minnesota Gov. Tim Walz’s administration spent millions of dollars hiring private investigators to silence state employees who tried to blow the whistle on what became one of the largest welfare fraud scandals in American history.
The report claims Walz and state Attorney General Keith Ellison knew about fraud problems as early as 2019 but allowed hundreds of millions in federal funds to flow to programs later revealed as criminal operations. At least 65 people have been convicted in connection with Minnesota welfare fraud cases.
House Oversight and Government Reform Committee Chairman James Comer (R-KY) is now asking Vice President JD Vance’s White House Task Force to Eliminate Fraud to investigate the allegations. Comer sent a letter to Vance on Sunday requesting an executive branch review of the committee’s findings.
“Whistleblowers within DHS have alleged that Governor Walz not only knew about this fraud, but that he retaliated against whistleblowers, ‘spending millions on surveilling staff and hiring private investigator or law firms to silence staff,'” the report states.
The retaliation claims aren’t just allegations from anonymous sources. Former Temporary Department of Human Services Commissioner Shireen Gandhi confirmed in her testimony that DHS used outside entities to investigate DHS staff, according to the report.
The committee and staff interviewed nine current and former Minnesota state officials in building their case.
The financial damage is staggering. The report details how failures to prevent fraud resulted in an estimated $300 million in federal child nutrition funds being lost. Potentially $9 billion in Medicaid-related funds were lost or placed at serious risk.
Feeding Our Future, a nonprofit that was supposed to help feed hungry children, became the most notable recipient of child nutrition assistance and the centerpiece of the fraud scheme. State officials identified program deficiencies with the organization and other nonprofits receiving federal funds. Despite identifying these problems, state agencies continued allowing the money to flow.
Why? The report claims state officials were worried about accusations of discrimination.
“The state’s consistent failure to act decisively in the face of known fraud allowed brazen criminal schemes to flourish and diverted resources away from the vulnerable populations these programs were intended to serve,” Comer’s letter to Vance says.
The report asserts that Walz’s administration officials “prioritized managing political and media fallout over addressing known fraud vulnerabilities.”
Comer directly challenged one of Walz’s key defenses in his letter to Vance.
“Despite Governor Walz’s claims, our investigation concluded that law enforcement agencies, including the Federal Bureau of Investigation, never directed Minnesota state officials to continue payments to suspected fraudulent providers, even in instances where state officials knew a provider was committing fraud,” Comer wrote.
Walz and Ellison testified before the committee in March. Both defended the payments and claimed they didn’t know about the fraud scandals at the time the payments were made.
Comer is asking Vance’s task force to direct appropriate executive branch agencies to conduct a thorough review of all Minnesota’s social services program integrity measures, oversight processes, reimbursements, and enrollment from 2019 to the present.
