Oversight Committee chairman suggests criminal referrals are possible in Minnesota fraud probe

Chairman James Comer, who leads the House Oversight Committee, told Just the News that further criminal referrals are possible with the evidence his committee has uncovered of the rampant welfare fraud in Minnesota. 

A new report from Comer’s committee, released on Wednesday, concluded that senior Minnesota government officials, including Gov. Tim Walz and Attorney General Keith Ellison, were for years aware of claims of widespread fraud in the state’s federally funded welfare programs, but failed to act, other than to retaliate against whistleblowers, Just the News reported. 

Comer told Just the News that he has already shared those findings with the Justice Department. 

“We've given [the Justice Department] the report today that shows Walz and them knew. I don't know that it's a crime. Incompetence isn't a crime, unfortunately…but at the end of the day, if some of these fraudsters implicate a coordination with Attorney General Ellison or Governor Walz, then I think that you could see some referrals from the committee,” Comer said on the Just the News, No Noise TV show on Wednesday.  

Walz claimed rooting out fraud was a "priority"

Governor Walz, who was also the Democratic nominee for vice president in 2024, previously acknowledged there is fraud in his state, but said his administration has made it a priority to root it out for years. 

He appeared at an Oversight Committee hearing on Wednesday alongside Ellison where he again defended his handling of the fraud allegations, touting the federal prosecution of more than 75 defendants, but struggled to answer why his own government did not take action against the suspected fraudsters after his office was informed of suspicious activity.

“I have watched with dismay as members of this Committee have made unfounded allegations that I am somehow complicit in defrauding Minnesota programs,” Walz said in his opening statement before the committee.

“As a former member of Congress, I know that this institution can be better than these evidence-free accusations levied for nakedly partisan reasons,” he said, before reiterating a commitment to work with Congress and federal prosecutors to root out fraud. 

However, the Oversight Committee believes the evidence shows the opposite, that Walz and his senior officials knew about the fraud concerns from the very beginning of his tenure and ultimately failed to act to address it before facing public backlash and pressure from the federal government in recent months. 

Nine current and former Minnesota state officials testify

That evidence comes from testimony gathered by the committee from nine current and former Minnesota state officials who oversaw the benefits programs within the Minnesota Department of Education (MDE) and the Department of Human Services (DHS), the two government bodies that oversaw the programs at the center of the fraud allegations. 

You can read the Oversight Committee’s report below: 

The Oversight committee launched an investigation in December into allegations of fraud in Minnesota’s public benefits programs after fresh evidence of daycare fraud in the state’s federally funded childcare benefits program surfaced that month.

The new video evidence allegedly showing empty daycare facilities registered to serve hundreds of children aligned with warnings from the state’s legislative auditor dating back to 2018 that there were persistent signs of fraud in the program, Just the News reported. 

The investigation also centered on a Minneapolis fraud ring connected to the state’s Somali immigrant community that exploited the state’s federally funded food program. The Department of Justice first charged 47 people in 2021 as part of a $250 million scheme involving the nonprofit Feeding Our Future that prosecutors alleged diverted federal COVID-19 relief funds for personal gain. Attorney General Merrick Garland, who served during the Biden administration, called it the largest pandemic-era fraud scheme ever identified. 

What did he know, and when did he know it?

At the hearing, Oversight Republicans pressed Walz on several aspects of their investigation, including trying to pin down when the Minnesota governor was originally briefed on allegations of fraud connected to the Feeding Our Future scandal. 

Though Walz originally said that he was informed about suspicious activity related to Feeding Our Future in November 2020, one Minnesota Department of Education official testified to the committee that the Minnesota government had received complaints about the program as early as 2018, the year before Walz took office. 

He testified that Gov. Walz’s office would have been informed of the concerns by April 2020 and that Attorney General Keith Ellison’s office would have received a notice also. However, this differed from the original November date that Walz initially shared publicly. 

Additionally, Republicans pressed Walz on the fact that state agencies continued to disburse money to Feeding Our Future after suspicions of fraud were first raised and funding was temporarily cut off. 

Despite officials acknowledging the agency’s authority to unilaterally cut funds, it resumed payments by April 30, 2021, over fears that the nonprofit would sue, one Minnesota Department of Education official told congressional investigators, Just the News reported on Wednesday. 

Feeding Our Future’s founder and executive director, Aimee Bock – who was eventually charged and convicted as part of the million-dollar fraud scheme – threatened MDE with a lawsuit in April 2021 claiming racial discrimination if funding was terminated. The nonprofit formally filed the lawsuit in November of that year alleging violations of state law.  

In September 2022, Walz told the media that a state judge ordered the state to restore funding in April 2021. However, that same judge later issued a statement disputing Walz’s characterization of the order.  

"As the public court record and Judge Guthmann’s orders make plain, Judge Guthmann never issued an order requiring the MN Department of Education to resume food reimbursement payments to FOF,” a court-authorized news release reads. 

"So either you’re lying or the court’s lying. And I’m just asking you which one is it?” Rep. Jim Jordan pressed Walz at the hearing. 

Walz said the Minnesota Department of Education interpreted the order differently. “The agency believed that the court had required them to make those payments," Walz told the lawmaker. 

Comer says multiple whistleblowers from the state have approached his committee and said they believed that Walz and Ellison failed to address the fraud in the Minneapolis Somali community for political reasons. 

“[T]hey came forward because they were appalled that Walz and Ellison would not do anything about the fraud, and they knew it was because of political reasons, 100% political. They didn't want to offend the Somali population, which was a massive voting block for the Democrat Party,” said Comer.