Minnesota Committee Report Blames Walz Culture for $9 Billion in Fraud Losses

A final report from the Minnesota House Fraud Prevention and State Agency Oversight Committee, released Tuesday as it wrapped up work for the session, targets a "culture of tolerance" under Gov. Tim Walz. The panel says that approach let serial fraudsters steal billions from taxpayers.

The 84-page document, drawn from two dozen hearings and hundreds of whistleblower tips, describes state government malfeasance, incompetence and suppression of internal warnings.

Investigators found fraud on a "massive and unprecedented" scale in Minnesota. Taxpayers lost an estimated $300 million to federal meal program scams and up to $9 billion to Medicaid fraud. The total across programs like childcare and SNAP exceeds earlier estimates, the report states.

It points to Walz's inaction on multiple fronts. In one case reported by Fox News Digital, the governor tried to blame a court order for resuming payments to fraudsters in the Feeding Our Future scheme. The judge later clarified in a public statement that no such order existed and that the Walz administration acted on its own.

Criminals followed a repeated "business model": low barriers to entry, shell companies and kickbacks to sign up recipients. The report ties the Feeding Our Future scandal to prior fraud in the Child Care Assistance Program that went unchecked, paving the way for the bigger operation.

Walz fostered a culture that enabled fraud by declining to punish officials despite years of whistleblower reports and audits, the document charges. His team "ignored and consciously downplayed" high fraud rates in more than a dozen Medicaid waiver programs and put "compassion over compliance."

Democrats on the committee opposed the probe, including a recent block on subpoenaing Rep. Ilhan Omar over her alleged links to convicted fraudsters in the Somali community.

The report criticizes Omar's MEALS Act for removing safeguards from federal nutrition programs. It allowed for-profit restaurants to join and introduced "grab-and-go" options that blocked verification of whether Feeding Our Future actually fed children.

Poor program design and stifled whistleblowers created a "permission structure" for crooks, the committee concludes.

"The problem all along has been people were afraid to call out the fraud because they were afraid of being called racist, because they were afraid of being called Islamophobic, and now because they’re afraid of going against their political patrons or benefactors," Rep. Marion Robbins, chair of the House Fraud Prevention and State Agency Oversight Committee, told Fox News Digital.

Robbins expressed pride in the committee's efforts but said more remains.

"I’m proud of the work that the committee has done," she said. "We’ve fulfilled our mission of exposing fraud and strengthening internal controls and trying to hold the executive branch officials, the Governor and his agencies, accountable. I think the accountability piece — there’s still a lot to do — but I hope the report contributes to that."

The panel's session is over, but Robbins wants it renewed next year.

"I hope that the next legislature, which gets elected in November, reconstitutes the fraud committee," she said. "I don't want this to be a historic anomaly. We never had a fraud and oversight committee prior to this session, and I hope there will be one in all future sessions. I think no matter who’s in power, it’s an important institutional check."

Robbins plans to push active investigations to federal partners despite Democratic resistance.

"We have a lot of active investigations based on whistleblower reports that we will continue in this intervening period and I'll continue to turn things over to our federal partners at the U.S. Attorney's office and the FBI," she said. "And I'll continue to work with our federal partners at the Department of Treasury, CMS, the new J.D. Vance group, we’re still doing the work, it just, won’t be recorded in a committee meeting anymore."

Fox News Digital sought comment from Walz’s office.