‘Failed to act’: Walz, Ellison knew about Minnesota fraud ‘for years,’ House report claims

Minnesota Gov. Tim Walz was aware of the widespread welfare fraud in his state “for years” and “repeatedly failed to act,” alleges a congressional report released on Wednesday.

Walz and the state’s Attorney General Keith Ellison are set to testify Wednesday about the $9 billion scandal before the House Oversight and Government Reform Committee.

The report, which also alleges that Ellison knew of the welfare fraud in Minnesota, draws from interviews with state employees and whistleblowers.

“Senior officials in the governor’s office and Attorney General Ellison’s office were aware of credible fraud concerns in Minnesota’s social services programs as early as 2019 within the Department of Human Services (DHS) and by April 2020 within the Department of Education (MDE), despite later public statements by Governor Walz suggesting otherwise,” the report says.

The committee and staff conducted transcribed interviews with nine key current and former Minnesota state officials. The investigation focuses on alleged money laundering and fraud in Minnesota’s social services programs, uncovered by the U.S. Attorney’s Office for the District of Minnesota.

The report, titled “The Cost of Doing Nothing,” further alleges retaliation against whistleblowers, including surveillance, and quotes some officials as not acting against suspected fraud out of fear of being labeled a racist.

“As a result, potentially billions of American taxpayer dollars were allowed to flow to fraudulent actors, while vulnerable populations were harmed and whistleblowers were ignored, sidelined, and retaliated against,” the House report says.

This led to about $300 million in federal child nutrition funds and potentially $9 billion in Medicaid-related funds lost or placed at significant risk, according to the report.

“Testimony obtained by the committee reveals that Governor Tim Walz and Attorney General Keith Ellison were aware of widespread fraud in social service programs, lied about their knowledge of the fraud, and retaliated against employees who dared to raise concerns,” House Oversight Chairman James Comer, R-Ky., said in a statement.

The report also alleges whistleblower retaliation against state employees who raised red flags at the Minnesota Department of Human Services.

“Whistleblowers within the DHS have alleged that Governor Walz not only knew about this fraud, but that he retaliated against whistleblowers, ‘spen[ding] millions on surveilling staff and hiring private investigator (sic) or law firms to silence staff,’” the report says.

The agency’s then-temporary commissioner confirmed to investigators that the agency “used outside entities” to investigate its own staff, according to the report.

“Instead of protecting vulnerable Americans, they handed over billions in taxpayer dollars to fraudsters and threw their own state employees under the bus,” Comer added.

“Governor Walz and Attorney General Ellison are appearing before the committee because the American people deserve clear answers about how this rampant fraud was allowed to flourish under their watch.”

Walz and Ellison have previously denied knowledge of fraud or retaliation against whistleblowers. They have said they are trying to address fraud in the state.

The report said “state agencies had clear authority to suspend or stop payments” to providers suspected of fraud without direction from courts or law enforcement agencies.

“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,” the House report says.

The bulk of federal fraud convictions in the state took place among Somali residents. However, the state legislative committee told the congressional panel that Somalis were also among the best whistleblowers.

The report later adds that: “Dozens of whistleblowers also reported that they were told not to say anything about the fraud because they would be called ‘racist’ or ‘Islamophobic’ or that it would hurt the state.”

The report said that the FBI never instructed Minnesota officials to continue payments to Feeding Our Future, one of the key charities accused of fraud. Walz said otherwise.

[Editor’s note: This story originally was published by The Daily Signal.]