Minnesota candidate ‘stress tests’ state’s new fraud law — what she found raised major red flags
A Minnesota state Senate candidate revealed she found several vulnerabilities in a fraud prevention law signed by Gov. Tim Walz after testing it against the state’s previous fraud scandals to see whether it could have caught them sooner.
The measure in question, the Office of the Inspector General law, creates an independent statewide watchdog that oversees inspectors general, investigates alleged fraud across state programs, establishes fraud prevention standards, and improves coordination and data sharing.
However, Heidi Heino, the Republican candidate for Minnesota’s 36th Senate District, told Fox News Digital her test against the Feeding Our Future scheme and other past fraud cases found the law lacks extra safeguards when potential risks emerge.
"When I stress tested against Feeding Our Future and some of the other fraud schemes that we had in Minnesota, it would have found the fraud eventually, but it's way after the money was already gone and we would still be stuck trying to claw it back," Heino said.
The law was passed as Minnesota faces the fallout from massive fraud schemes involving childcare, autism, housing and disability services. Republicans have blamed leadership and oversight failures, while the Trump administration launched a federal anti-fraud task force led by Vice President JD Vance.
Working as a corporate leader whose day job involves underwriting, Heino said she used similar review and auditing practices to test where Minnesota’s fraud safeguards fell short.
"Business does a lot with a little," she said. "Government does the opposite. They do a little with a lot of resources."
Heino said she used a 2,800% increase in payments to Feeding Our Future from 2020 to 2021 in her test, a jump that should have automatically raised alarm bells and led to further review. The scheme alone allegedly stole $250 million from a federally funded child nutrition program during the COVID-19 pandemic.
"You don't have to be a detective to see that there's some issue there and so to investigate that and check and see if those claims are legitimate, and if they were legitimate, have someone actually sign off on it," she said, adding that filling out extra paperwork may be frustrating but can help prevent fraud in the long run.
Heino also argued Feeding Our Future should not have been allowed to address complaints against itself.
"We had 30 complaints to the Minnesota Department of Education regarding the fraud and they are mostly overlooked or Feeding Our Future had to go correct itself and that was a huge gap there," she said.
She proposed immediately freezing payments, conducting a full review, and triggering an outside audit.
"The OIG has good bones, but it needs teeth," she said.
Without independent audits, Heino said Minnesota will not be able to uncover fraud-related gaps, saying the additional oversight would save more money than it costs.
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"We get a lot of pushback saying this is going to be expensive, but is it?" she said. "It will be less expensive to have an independent audit than it is going to be to have all the fraud and lose taxpayer dollars to fraudulent activities."
Those same issues apply to current state programs like Minnesota’s Paid Leave program, according to Heino.
"However, we need to rein it in and have more investigation before we start sending out the checks, especially with paid family leave," she said. "They pay out before they have the doctor's note certifying that this is actually true and they have verified it."
She acknowledged that the law is a "great first step" toward addressing the problem but said it does not go far enough to protect taxpayers and prevent future fraud.
As a mother, grandmother and taxpayer, Heino said she is fed up with how leaders in her home state have handled fraud, adding the problem has gotten so bad that Minnesota has become the "laughing stock of the nation" and people no longer want to say they are from the state anymore.
"We need to funnel those resources to the people that actually need them and keep people committing fraud from taking our money and running away with it, buying luxury condos or homes, and then funneling it out of the country," she said.
Fox News Digital reached out to Walz's office and the Minnesota Department of Education for comment.
"We have not slowed down, there is no sense in which the fraud has been stopped in Minnesota," Bill Glahn, a policy fellow at the Center of the American Experiment, told Fox News Digital in August, making the case that the fraud situation in the state has not been properly addressed.