Final Walz fraud report rips ‘culture of tolerance’ as Minnesota taxpayers face billions in alleged losses

A comprehensive final report released Tuesday by the Minnesota House Fraud Prevention and State Agency Oversight Committee concluding its work for the current session takes aim at a "culture of tolerance" under Gov. Tim Walz that it says allowed serial fraudsters to fleece taxpayers for billions of dollars. 

The 84-page final report, which follows two dozen hearings and hundreds of whistleblower tips, paints a grim picture of state government malfeasance, incompetence and the active suppression of internal warnings. 

The committee concluded that the scale of fraud in Minnesota is "massive and unprecedented," costing taxpayers an estimated $300 million in federal meal program fraud and up to $9 billion in Medicaid fraud. The report asserts that the total amount stolen across multiple programs, including childcare and SNAP, is significantly higher than previously believed. 

The report cited several examples of what it characterizes as Walz failing to act on fraud, including a situation, reported by Fox News Digital, where he "tried to blame a court order" for failing to stop payments to the Feeding Our Future fraudsters. However, the presiding judge later issued a public statement clarifying that he never ordered the state to resume payments, asserting that the Walz administration did so voluntarily.

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Investigators identified a recurring "business model" used by criminals to fleece taxpayers, which involved low barriers to entry, the use of shell companies and the payment of kickbacks to enroll recipients. The report specifically links the Feeding Our Future scandal to earlier unaddressed fraud in the Child Care Assistance Program (CCAP), suggesting that the failure to stop one led directly to the explosion of the other. 

The report alleges that Governor Walz created a culture that enabled fraud by failing to hold officials accountable despite years of credible whistleblower reports and audits. It claims the administration "ignored and consciously downplayed" shocking levels of fraud across more than a dozen Medicaid waiver programs and prioritized "compassion over compliance." 

While the committee uncovered numerous findings highlighting the severity of the fraud, they found themselves consistently facing opposition from Democrats, including earlier this month when Democrats on the committee blocked an effort to subpoena Democratic Rep. Ilhan Omar for information on her alleged ties to the convicted fraudsters in the Somali community.

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The report offered a strong critique of Omar, asserting that her MEALS Act "took the guardrails off" federal nutrition programs by allowing for-profit restaurants to participate and permitting "grab-and-go" flexibilities that made it nearly impossible to verify if children were actually being fed by the Feeding Our Future program.

Ultimately, the report concludes that the unprecedented level of fraud was facilitated by poor program design and the active suppression of whistleblower reports, which created a "permission structure" for future wrongdoers.

"The problem all along has been people were afraid to call out the fraud because they were afraid of being called racist, because they were afraid of being called Islamophobic, and now because they’re afraid of going against their political patrons or benefactors," House Fraud Prevention and State Agency Oversight Committee, told Fox News Digital about the reasons why the fraud was allowed to linger for so long.

Robbins says that she reflects back on the committee's work with pride but acknowledges there is more work to be done.

"I’m proud of the work that the committee has done," Robbins said.

"We’ve fulfilled our mission of exposing fraud and strengthening internal controls and trying to hold the executive branch officials, the Governor and his agencies, accountable. I think the accountability piece — there’s still a lot to do — but I hope the report contributes to that."

While the committee’s work for this session is complete, Robbins says she hopes that the committee will be renewed for the next legislative session.

"I hope that the next legislature, which gets elected in November, reconstitutes the fraud committee," Robbins said. "I don't want this to be a historic anomaly. We never had a fraud and oversight committee prior to this session, and I hope there will be one in all future sessions. I think no matter who’s in power, it’s an important institutional check."

Despite the Democratic opposition, Robbins says the "work is still there" and she hopes that federal partners, including Vice President JD Vance’s fraud task force, step in.

 "We have a lot of active investigations based on whistleblower reports that we will continue in this intervening period and I'll continue to turn things over to our federal partners at the U.S. Attorney's office and the FBI," Robbins said. "And I'll continue to work with our federal partners at the Department of Treasury, CMS, the new J.D. Vance group, we’re still doing the work, it just, won’t be recorded in a committee meeting anymore."

Fox News Digital reached out to Walz’s office for comment.