House Oversight Committee grills Walz, Ellison over Minnesota fraud

(The Center Square) - Lawmakers grilled Minnesota Gov. Tim Walz and Minnesota Attorney General Keith Ellison on Wednesday over their knowledge of allegations of fraudulent payments of taxpayer dollars across the state.

Elected officials on the U.S. House Oversight Committee questioned Walz and Ellison over whether they knew about reported billions of dollars in federal funds being used in fraudulent schemes.

Before the hearing, lawmakers released a report that alleged Walz and Ellison knew about credible fraud concerns in Minnesota and did not act on them. The report estimated about $300 million in federal child nutrition funds were fraudulently disbursed and as much as $9 billion in Medicaid-related funds were obtained.

"The Committee has found that Minnesota lacked adequate oversight efforts to verify that taxpayer dollars were being used appropriately and could have stopped the flow of money to fraudsters at any time but chose not to for fear of political retribution from the politically active Somali community," the report said.

Lawmakers confronted Walz and Ellison over what they knew regarding federal fraud schemes in Minnesota. U.S. Rep. Jim Jordan, R-Ohio, pointed to a Minnesota Judicial Branch release that accused Walz of lying about a court order that resumed payments to Feeding Our Future – a charity that used federal aid dollars to purchase luxury vehicles for its owners.

“The court did something that I don’t know if I’ve ever seen it,” Jordan said. “They issued a statement saying you were wrong.”

Walz said Minnesota Judge John Guthmann ordered him to reinstate payments to the Feeding our Future charity in April 2021.

“Guthmann never issued an order requiring the MN Department of Education to resume food reimbursement payments to FOF. The Department of Education voluntarily resumed payments and informed the court that FOF resolved the ‘serious deficiencies that prompted it to suspend payments temporarily,” the court order read.

Walz denied Jordan’s claims and said attorneys at the Minnesota Department of Education “misinterpreted” the court order in relation to Feeding our Future. Currently, federal prosecutors have indicted 79 people since 2022 in connection with fraud related to Feeding our Future.

Other Republican lawmakers also repeatedly questioned whether Walz was notified of fraudulent spending. The House oversight committee report cited increases in spending on federal services for children with autism. From 2019 to 2024, autism service providers receiving federal funds increased 700%, according to the report. Spending on autism services went from $20.4 million in 2019 to $342 million in 2024.

“You both allowed billions in these taxpayer dollars to be pillaged and plundered by Somali pirates,” Rep. Nancy Mace, R-S.C. said. “You knew this was happening, you chose to do nothing about it and in some cases you enabled it.”

Rep. Byron Donalds, R-Fla., confronted Walz on whether he knew about fraud schemes going on in Minnesota. Walz said he was not specifically notified of fraud allegations going on in the state.

However, Donalds mentioned that Walz’s former chief of staff testified before the oversight committee that he was aware of fraud. Donalds questioned whether Walz was aware of several significant increases in payments to fraud-linked services. Walz said he was unaware of these increases.

“Governor Walz, you have to submit a budget to your legislature every single year like every governor has to do,” Donalds said. “If you're not aware of these increases, what was your office doing?”

While Republicans on the oversight committee grilled Walz on improper payments and fraud-linked schemes, Democrats decried ICE activity in Minnesota and called for increased social service funds to help citizens affected by immigration enforcement in the state.

Rep. Ayanna Pressley, D-Mass., said ICE activity in Minnesota could be linked to learning loss and generational trauma.

“No child should have those concerns or carry that heavy burden, but this is the reality for our nation's children under Donald Trump's America,” Pressley said.

Walz said he plans to put money into social services to address mental health challenges caused by immigration enforcement while increasing fraud protections.

“We are going to put money into social service programs to address it while we tighten up fraud protections,” Walz said. “The idea is you have all these generous programs, yes and our people are more healthier, our people are more educated, our economy is stronger.”

During the hearing, Walz suggested using artificial intelligence to detect fraud before it happens. He first included this proposal in an anti-fraud package introduced last week.

“I don't want to hear that we're arresting people after they did it. We need to stop it before it happens,” Walz said.

The plan also includes an increase of site visits to child care providers, more thorough criminal background checks and identifying areas at high risk of fraud.

Walz announced he will not run for reelection in 2026 amidst allegations of fraud across the state.

“Every minute I spend defending my own political interests would be a minute I can’t spend defending the people of Minnesota against the criminals who prey on our generosity and the cynics who prey on our differences,” Walz wrote.