The House Committee on Oversight and Government Reform released a report that says Minnesota state officials, under Gov. Tim Walz, were aware of taxpayer fraud and failed to address it.
The report, titled “The Cost of Doing Nothing: How Tim Walz and Keith Ellison Fueled Minnesota’s Fraud Explosion,” looked into federally funded social programs in Minnesota and claims that state lawmakers were both aware of the fraud and capable of stopping it.
“Minnesota Gov. Tim Walz and Attorney General Keith Ellison,” the report states, “are responsible for one of the most stunning oversight failures this committee has ever examined.”
“Today’s report is the culmination of months of investigative work and reveals hard evidence showing how the Walz administration failed to stop widespread fraud, allowing criminals to enrich themselves at the expense of American taxpayers.”
The investigation found that as much as $9 billion in Medicaid was lost and as much as $300 million in child nutrition funds were placed at risk.
In the investigation, the House Committee interviewed several former Minnesota state officials who gave testimony that fear of being accused of discrimination was cited as a reason for continuing the suspicious payments.
The Government Accountability Office estimates that fraud accounts for a loss of between $233 billion and $521 billion in the United States annually.
This report coincides with the Trump administration’s anti-fraud task force that aims to combat fraud in federally-funded social benefit programs.
Walz and Ellison have both denied claims of wrongdoing and say that the reports of the House Committee are unfounded.
The report claims Minnesota leaders were aware of fraud
The report, which was 205 pages long, detailed the findings of the investigation and says that senior officials in the Walz administration were aware of systemic fraud concerns in the state’s Department of Human Services and Department of Education.
Minnesota made national headlines in April when the FBI executed search warrants and found that more than 20 daycares and autism centers in Minneapolis had been abusing taxpayer-funded social services.
The committee’s report says that the officials “had clear authority to suspend or stop payments to provider suspected of fraud.”
Fear of litigation and accusations of discrimination were cited as reasons for continued funding of suspicious organizations.
Rather than addressing concerns of fraud, the report says that employees who raised concerns were met with threats of surveillance.
Oversight letter to Vance, Walz and Ellison respond
Along with the report, Rep. James Comer, R-Ky., chairman of the House Oversight Committee, sent a letter to Vice President JD Vance with a summary of the report.
The letter claims that Minnesota state officials not only knew about the fraud, but “actually sought to cover up or minimize reports and findings of fraud.”
The committee questioned the state’s ability to manage federal funds and act decisively to address concerns of fraudulent behavior.
The letter requested that “the White House Task Force to Eliminate Fraud thoroughly review all of Minnesota’s social services programs in light of vulnerabilities created by efforts of state officials.”
Vance responded by sending a letter to U.S. Assistant Attorney General Colin McDonald saying that “the National Fraud Enforcement Division must immediately investigate.”
Vance urged further action, saying, “If state officials in Minnesota or anywhere else in the country facilitated fraud or looked the other way while this theft was happening … they must be held accountable.”
When asked for comment, a spokesperson for Walz pointed to a KTTC statement that said, ““This committee has proven time and time again to be nothing more than a joke ... Governor Walz is glad to see fraudsters are going to prison. If the committee is concerned about corruption, they should investigate why President Trump continues to let fraudsters out of prison.”
Ellison responded directly saying, “The allegations in the House Republican report are unfounded, and Vice President Vance’s referral is a political stunt from an administration that uses the machinery of government to target its perceived opponents while extending leniency to those aligned with its interests.”
Trump administration continues fraud crack down
In March, President Donald Trump formed the Task Force to Eliminate Fraud and assigned Vance to chair the task force.
“Since President Trump announced the launch of the Fraud Task Force,” Vance said in his letter, “we have uncovered billions of dollars in fraud against tax payers.”
In the past several months, dozens of individuals have been charged in Minnesota for Medicaid and social service fraud cases according to CBS.
Last week, the Trump administration announced that it was canceling substantial federal aid to the State of Hawaii’s Medicaid program.
Andrew Ferguson, chairman of the Federal Trade Commission, said in a news conference on June 4 that Hawaii “is being decertified for its abject failure … to prohibit fraud in Hawaii.”
The White House website lists over 25 other actions taken to combat fraud since the formation of his task force.