A 205-page House Oversight Committee majority staff report released Monday accuses Minnesota Gov. Tim Walz and Attorney General Keith Ellison of failing for years to stop widespread fraud in taxpayer-funded social programs, even after senior state officials allegedly received repeated warnings.
The report, titled “The Cost of Doing Nothing: How Tim Walz And Keith Ellison Fueled Minnesota’s Fraud Explosion,” says senior Minnesota officials knew about fraud concerns as early as 2019 in programs overseen by the Minnesota Department of Human Services and by April 2020 in child nutrition programs overseen by the Minnesota Department of Education.
The report also says state agencies had authority to stop payments to suspected fraudulent providers but repeatedly failed to do so, allowing an estimated $300 million in federal child nutrition funds and potentially $9 billion in Medicaid-related funds to be lost or placed at serious risk.
House Committee on Oversight and Government Reform Chairman James Comer (R-KY) urged President Donald Trump’s Anti-Fraud Task Force, chaired by Vice President JD Vance, to conduct a full review of Minnesota’s social services programs.
“Minnesota Governor Tim Walz and Attorney General Keith Ellison are responsible for one of the most stunning oversight failures this Committee has ever examined,” Comer said.
The final report follows a March congressional hearing in which Walz and Ellison faced questions about alleged fraud in Minnesota social programs, as previously reported by The Dallas Express.
The biggest claims in the report center on five areas: when senior officials knew about fraud warnings, why payments continued to Feeding Our Future, how whistleblowers were allegedly treated, how much Medicaid money may have been exposed, and what federal officials want reviewed next.
Warnings Reached Senior Officials, Report Says
The committee report claims that fraud warnings reached senior officials in Walz’s and Ellison’s offices years before the state took stronger action.
The report says former DHS Commissioner Tony Lourey testified that he communicated with Chris Schmitter, Walz’s former chief of staff, in 2019 about fraud and program integrity concerns involving the Child Care Assistance Program, non-emergency medical transportation, and other state programs.
Former DHS Commissioner Jodi Harpstead also testified that she reported fraud concerns to the governor’s office and the attorney general’s office throughout her tenure, according to the report.
Walz told lawmakers in March that fraud happened on his watch but said some of the problems may have predated his administration.
“I certainly understand it happened on my watch,” Walz said during the hearing, according to the report. “Whether it predated me or not, I am here.”
Ellison has urged lawmakers to focus on fixing the underlying problems rather than assigning blame, as previously reported by The Dallas Express.
Feeding Our Future Payments Remain Central
Much of the report focuses on Feeding Our Future, the Minnesota nonprofit at the center of a federal child nutrition fraud case.
The report says MDE officials became suspicious of Feeding Our Future in 2020 but continued approving payments even after the agency identified serious deficiencies. The report also says no court or law enforcement agency ordered Minnesota officials to resume or continue payments to Feeding Our Future.
That question became one of the sharpest moments of the March hearing, when U.S. Rep. Jim Jordan (R-OH) pressed Walz over whether a court had ordered the state to restart payments after MDE paused them, as previously reported by The Dallas Express.
Jordan cited a 2022 statement from then-Ramsey County District Court Judge John Guthmann, who said he “never issued an order” requiring MDE to resume food reimbursement payments to Feeding Our Future.
“So either you’re lying, or the court’s lying,” Jordan told Walz during the hearing.
Walz responded that state agency attorneys believed at the time that the court required the payments.
“The agency believed that the court had required them to make those payments,” Walz said.
The committee report disputes that explanation. It says MDE voluntarily resumed payments in April 2021 and continued sending federal taxpayer dollars to Feeding Our Future until January 2022, when federal authorities executed search warrants.
Whistleblower Claims Resurface
The report also alleges Minnesota state employees faced retaliation after raising fraud concerns.
The committee says it spoke with nearly 30 whistleblowers, most of them current employees in the Walz administration. The report alleges that employees who raised concerns about fraud were ignored, sidelined, subjected to regular check-ins with senior officials, or threatened with surveillance.
Those findings echo allegations previously covered by The Dallas Express, when a group claiming to represent more than 480 Minnesota DHS employees accused Walz of ignoring fraud warnings and retaliating against staff who raised concerns.
The group alleged that Walz was “100% responsible for massive fraud in Minnesota” and said whistleblowers were met with “monitoring, threats, repression,” and efforts to discredit internal reports, as previously reported by The Dallas Express.
Walz has said fraud undermines trust in government and harms programs designed to help people.
“If you’re committing fraud, no matter where you come from, what you look like, what you believe, you are going to go to jail,” Walz said in November.
Medicaid Programs Face New Scrutiny
The report also focuses heavily on Medicaid-funded programs, including Housing Stabilization Services, Early Intensive Developmental and Behavioral Intervention, Integrated Community Supports, and non-emergency medical transportation.
The report says Minnesota designated 14 Medicaid programs as “high-risk” because of significant fraud concerns. According to the report, those programs cost taxpayers more than $18 billion since 2018, including $3.5 billion in 2024 alone.
Federal officials recently announced charges against 15 defendants accused of participating in alleged schemes involving more than $90 million in fraud across Minnesota taxpayer-funded programs, as previously reported by The Dallas Express.
DOJ said the charges are allegations and that defendants are presumed innocent unless proven guilty.
Those cases involved programs tied to housing stabilization services, autism services, child care, and Medicaid-related care. Assistant Attorney General Colin McDonald said during the May announcement that the work in Minnesota was not over.
“This is not the end of our work in Minnesota,” McDonald said. “This is the beginning of our work in Minnesota. The fraud here in Minnesota is shocking.”
In a separate DX report, federal authorities said the Minnesota cases included what prosecutors described as the largest Medicaid autism fraud case ever charged by the Justice Department.
Authorities alleged that defendants in one autism-related case paid kickbacks to parents, diagnosed children with autism “regardless of medical necessity,” and billed Medicaid for services that were never provided.
Federal Review Urged
The committee report recommends stronger federal safeguards for state-administered programs that receive federal taxpayer dollars.
The recommendations include limiting reliance on self-attestation, improving data sharing between federal agencies, notifying agencies when a provider’s nonprofit status lapses, and strengthening whistleblower reporting channels.
Comer also sent a letter to Vance urging the White House Task Force to Eliminate Fraud to review Minnesota’s social services programs, reimbursements, enrollment processes, and fraud controls from 2019 to the present.
The report concludes that Minnesota’s failures allowed criminal schemes to grow while diverting money away from the vulnerable populations the programs were intended to serve.
“Governor Walz and Attorney General Ellison clearly did not protect taxpayer dollars,” the report says.
