A House panel is asking the vice president’s anti-fraud task force to investigate alleged retaliation against whistleblowers by Minnesota Gov. Tim Walz’s administration in the state’s massive welfare fraud scandal.
On Sunday, House Oversight and Government Reform Committee Chairman James Comer, R-Ky., sent a letter to Vice President JD Vance, chairman of the White House Task Force to Eliminate Fraud, asking for an executive branch review of the committee’s findings in the new report, “The Cost of Doing Nothing: How Tim Walz and Keith Ellison Fueled Minnesota’s Fraud Explosion.”
The report, released Monday, includes testimony and documents showing that state officials continued payments to what turned out to be fraudsters. Despite warning signs of fraud, the state made the payments because of concerns about accusations of discrimination and used private investigators to look into whistleblowers. The report says that Walz and state Attorney General Keith Ellison appear to have known about the fraud problems as early as 2019.
The committee and staff interviewed nine current and former Minnesota state officials.
“Whistleblowers within DHS [state Department of Human Services] 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, “Then Temporary [DHS] Commissioner Shireen Gandhi confirmed in her testimony that DHS used
outside entities to investigate DHS staff.”
At least 65 people have been convicted in Minnesota welfare fraud cases.
The 200-page House Oversight report details how failures to prevent fraud resulted in an estimated $300 million in federal child nutrition funds and potentially $9 billion in Medicaid-related funds being lost or placed at serious risk.
The report asserts that Gov. Walz’s administration officials “prioritized managing political and media fallout over addressing known fraud vulnerabilities.”
“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.
Walz and Ellison testified to the committee in March about the fraud and defended the payments, and said they did not know about the fraud scandals at the time of the payments.
“Therefore, the committee encourages the Task Force to Eliminate Fraud to direct the appropriate executive branch agencies to conduct a thorough review of all of Minnesota’s social services program integrity measures, oversight processes, reimbursements, and enrollment from 2019 to the present,” Comer’s letter continues.
State officials identified program deficiencies with Feeding Our Future, the most notable recipient of child nutrition assistance, and other nonprofit entities receiving pass-through federal funds. Despite identifying these problems, state agencies continued to allow hundreds of millions of dollars in federal funds to flow to programs involved in fraud, according to the report.
The report asserts that Minnesota state agencies had clear authority to suspend or stop payments to providers suspected of fraud without requiring independent direction from courts or law enforcement agencies. However, agencies still failed to act.
“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 said in a letter to Vance.
“Instead of trying to stop widespread fraud, Governor 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, diminishing job duties, and threats of surveillance,” Comer wrote.
