Congressional investigators say testimony from state officials indicates Minnesota’s top leadership knew about widespread fraud in federally funded programs for years before corrective actions were taken.
By yourNEWS Media Newsroom
A House Oversight Committee investigation concluded that Minnesota’s top state officials were aware of widespread fraud affecting federally funded welfare programs but failed to intervene despite repeated warnings from government employees and auditors.
The findings were detailed in an interim report released Wednesday and first reported by Just the News. The report summarizes testimony from nine current and former Minnesota officials who oversaw benefits programs within the state government.
According to the committee, senior officials including Gov. Tim Walz and Attorney General Keith Ellison were informed about irregularities in major public assistance programs for years before large-scale federal prosecutions exposed the schemes.
Both officials were scheduled to testify before the House Oversight Committee later Wednesday morning as lawmakers examine allegations that fraudulent activity in the programs cost taxpayers billions of dollars. Investigators say some of the schemes were first documented publicly in 2024.
Federal investigations have already resulted in dozens of criminal cases tied to alleged fraud networks, many involving individuals within Minnesota’s Somali immigrant community.
House Oversight Committee Chairman James Comer said the testimony gathered by investigators indicates state leaders had knowledge of the fraud and responded by targeting employees who attempted to raise alarms.
“Testimony obtained by the Committee reveals that Gov. Tim Walz and Attorney General Keith Ellison were aware of widespread fraud in social service programs, lied about their knowledge of the fraud, and retaliated against employees who dared to raise concerns,” Comer said in a statement.
“Instead of protecting vulnerable Americans, they handed over billions in taxpayer dollars to fraudsters and threw their own state employees under the bus,” he added.
The congressional investigation began in December after new allegations surfaced involving the state’s childcare benefits system. Evidence reported by Just the News included video footage that investigators say showed daycare centers registered to serve hundreds of children despite appearing empty.
The evidence corresponded with warnings issued years earlier by Minnesota’s legislative auditor, who in 2018 raised concerns that the Child Care Assistance Program showed consistent indicators of large-scale fraud.
Investigators also focused on the Feeding Our Future case, a fraud scheme involving a nonprofit organization that received federal pandemic relief funds intended to provide meals to children.
Federal prosecutors alleged the organization diverted large amounts of the funding for personal gain. In 2021, the Department of Justice announced charges against 47 individuals connected to the operation, which investigators described as a $250 million scheme. Details of the charges were outlined by the Justice Department when it announced federal indictments.
Then–Attorney General Merrick Garland described the Feeding Our Future case as the largest pandemic-era fraud operation uncovered in the United States.
While Walz previously acknowledged the presence of fraud in state programs and said his administration had prioritized addressing the problem, congressional investigators said the testimony they collected contradicts that claim.
According to the report, witnesses told lawmakers that concerns about Feeding Our Future and related programs were communicated to state officials early in Walz’s tenure.
Daron Korte, an assistant commissioner at the Minnesota Department of Education whose agency oversaw the distribution of funds to Feeding Our Future sites, told investigators that warnings about irregularities were received as early as 2018 and continued through 2021.
Korte said the governor’s office would have been notified about the concerns by April 2020, and that the attorney general’s office also received notice.
The Minnesota Department of Education determined in March 2021 that Feeding Our Future was in “serious deficiency” and moved to terminate funding. However, payments resumed weeks later after the nonprofit threatened legal action.
Korte told investigators that officials feared a lawsuit would overturn the decision.
“[We] could unilaterally make that decision, but we just knew, with Feeding our Future, it was going to end up in court and had the potential to be overturned,” he testified.
The nonprofit’s founder, Aimee Bock, later became one of the central figures charged in the fraud investigation. She had warned the state in April 2021 that cutting off funding would prompt a lawsuit alleging racial discrimination. Feeding Our Future filed that lawsuit in November of that year.
Despite ongoing concerns, investigators said state officials approved additional program sites associated with the organization.
Korte testified that the state moved forward with approvals partly because the U.S. Department of Agriculture did not provide written guidance authorizing Minnesota to halt payments.
“I think they were supportive generally of what we were saying we wanted to do, but they weren’t willing to provide anything in writing,” Korte told the committee.
Congressional investigators also reviewed testimony about fraud in Minnesota’s Child Care Assistance Program.
Former Department of Human Services Commissioner Tony Lourey told investigators he communicated concerns about irregularities in the program with the governor’s chief of staff in early 2019.
Separate reporting by Just the News indicated the Minnesota legislature had been alerted to problems in the program the year before Walz took office.
According to the legislative auditor’s findings, investigators discovered signs of extensive abuse in the program, including evidence that some childcare centers recruited eligible parents by offering kickbacks using government funds.
Auditors also reported possible overbilling among many of the largest recipients of childcare assistance payments. One investigator cited in the congressional report estimated that fraud could account for more than half of all government funding distributed through the program.
The House Oversight Committee published its findings in a report titled The Cost of Doing Nothing, which outlines testimony and evidence gathered during the investigation.
Lawmakers said the hearing with Walz and Ellison will focus on how the alleged fraud was allowed to continue for years and whether stronger safeguards are needed to prevent misuse of taxpayer funds in federally supported social programs.
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