James Comer is Chairman of the House Oversight Committee. | https://oversight.house.gov/chairman-james-comer/
The House Committee on Oversight and Government Reform held a hearing on the misuse of federal funds in Minnesota, focusing on alleged fraud in state-run social service programs. Lawmakers stated that Governor Tim Walz and Attorney General Keith Ellison were aware of ongoing fraud for years but did not act effectively to prevent it. The committee also heard claims that whistleblowers who raised concerns about the fraud faced retaliation.
Chairman James Comer (R-Ky.) said, “For years, Governor Tim Walz and Attorney General Keith Ellison presided over one of the most extensive breakdowns of oversight this Committee has ever examined. Federal prosecutors estimate that as much as $9 billion may have been stolen from just fourteen Medicaid programs administered by the State of Minnesota. As our investigation has shown, it happened because state leadership failed, repeatedly, to intervene. We have spoken with over thirty whistleblowers, many of them current employees and Democrats, who say they were ignored, retaliated against, and even surveilled for raising concerns. Instead of protecting the whistleblowers, the Walz administration protected the system that enabled fraud. Governor Walz and Attorney General Ellison were warned repeatedly. Auditors raised red flags. Employees sounded alarms. Invoices didn’t make sense. And still, the money kept flowing.”
Comer submitted an interim staff report titled “The Cost of Doing Nothing: How Tim Walz and Keith Ellison Fueled Minnesota’s Fraud Explosion,” which is based on interviews with nine current and former state employees and documents obtained by the committee.
Lawmakers questioned why payments continued to providers suspected of fraud even after credible warnings surfaced as early as 2019 at the Minnesota Department of Human Services and by April 2020 at the Minnesota Department of Education. According to testimony presented at the hearing, agencies had legal authority to suspend or terminate these payments but did not do so.
During questioning about Feeding Our Future—a program accused of large-scale fraud—Comer stated: “In the Feeding our Future case, Governor Walz and Attorney General Ellison publicly suggested that courts forced the state to continue payments. The judge in that case took the extraordinary step of publicly correcting them. The truth is the state made a choice once again to keep sending money out the door.” Comer further noted nearly $300 million was lost from programs meant to feed children during the pandemic.
Governor Walz responded: “We have been partners.”
Comer pressed further: “This decision occurred after large-scale fraud was going on for years. But the agencies did raise concerns of fraud for years, correct?”
Governor Walz answered: “Yes…”
Rep. Jim Jordan (R-Ohio) criticized Governor Walz for not being transparent about his administration’s decisions regarding resuming payments under investigation for fraud related to Feeding Our Future.
Rep. Jordan asked: “Governor, why didn’t you tell the truth? Why didn’t you just tell the truth about the Feeding Our Future program?... March 30th, 2021, the payments are stopped and a little over a month later, they are restarted... What was the reason for restarting?”
Governor Walz replied: “The agency believed that court had required them to make those payments.”
Jordan countered: “And that was false, wasn’t it?”
Walz said: “I can’t tell you Congressman.”
Majority Whip Tom Emmer (R-Minn.) referenced public statements by Governor Walz acknowledging organized crime activity related to these schemes in Minnesota.
Emmer said: "Can we agree that this fraud is a serious thing?"
Governor Walz responded: "Yes."
Emmer continued: "Is there an organized crime ring in Minnesota?" After silence from Governor Walz he added: "I will answer it for you... This is a serious thing... My concern is that you actively obstructed this investigation… If these concerns are proven to be true, you should be disbarred and you should go to jail."
Rep. Andy Biggs (R-Ariz.) raised questions about campaign contributions received by Attorney General Ellison from individuals under investigation for fraud within Somali business groups tied to Feeding Our Future.
Biggs asked: "Do you remember [the meeting]?"
Attorney General Ellison answered: "Yes I do…"
Biggs continued pressing about campaign donations from these individuals; Ellison denied accepting such funds.
Rep. Virginia Foxx (R-N.C.) highlighted subpoenas issued due to lack of cooperation from Governor Walz’s administration regarding what she described as "the largest pandemic fraud in the nation." She noted more than $300 million went to Feeding Our Future after officials knew about potential fraud.
Foxx asked Gov. Walz if he was aware how his administration handled this case; he confirmed awareness.
Foxx then questioned why additional anti-fraud measures were not implemented given subsequent discoveries involving billions more lost or at risk through other assistance programs in Minnesota.
Rep. Tim Burchett (R-Tenn.) focused on whistleblower retaliation allegations against Gov. Walz’s administration:
Burchett asked if taxpayer funds had ever been used against whistleblowers; Gov. Walz denied such actions but acknowledged supervising thousands of employees without speaking specifically on individual cases.
Burchett pointed out nearly 30 whistleblowers reported retaliation after raising concerns within various departments.
Other lawmakers echoed worries over retaliation against those reporting wrongdoing within state agencies overseeing social service funding.
According to information shared during testimony at today’s hearing:
- The U.S Department of Justice has charged 98 people in connection with these cases; 85 are reportedly Somali Americans.
- Sixty-four convictions have already occurred.
- Federal authorities have issued over 1,750 subpoenas and executed more than 130 search warrants.
- Additional investigations involve freezing funding streams and reviewing eligibility requirements across multiple federally funded programs.
