Minnesota 'Culture Of Fraud' Enabled More Than $9 Billion In Misused Taxpayer Funds, Panel Says

Authored by Janice Hisle via The Epoch Times (emphasis ours),

A “culture of fraud” infected Minnesota state agencies, resulting in more than $9 billion in taxpayers’ money squandered, a new legislative report says.

“We finally pulled the curtain back—and the public is grateful,” state Rep. Kristin Robbins, chair of the Minnesota House Fraud Prevention and State Agency Oversight Committee, said May 13 during a session that summarized 16 months of investigative work.

Many fraudsters “came to believe that fraud was tolerated and paid in a big way,” according to a report that Robbins released at the meeting. The report summarizes the committee’s attempts to dissect how state agencies became so mired in fraud.

Testimony from dozens of witnesses, including state employees and whistleblowers, demonstrated that Gov. Tim Walz’s administration neglected “basic due diligence” to protect taxpayers’ money, and instead “prioritized getting as much money out the door as possible” via government-benefits programs, the report says.

The administration also allegedly punished whistleblowers and “ignored and consciously downplayed shocking levels of fraud” in more than a dozen Medicaid-funded programs, such as autism services, medical transportation, and adult day care, according to the document.

“All of these failures have created opportunities for serial fraudsters to steal billions from Minnesota taxpayers across multiple programs for years,” the report says, estimating $300 million in federal meals fraud and $9 billion in Medicaid fraud. Those numbers exclude “potential hundreds of millions more in fraud in child care” and the Supplemental Nutrition Assistance Program, the report notes.

The governor’s office did not respond to The Epoch Times’ request for comment by publication time.

Walz has repeatedly defended his track record on tackling fraud, including in a May 6 news release, stating: “We’ve made significant progress to strengthen programs and root out fraud. Today, we’re building on our success by putting an even stronger structure in place; adding leadership, improving oversight, and ensuring these programs are managed with the discipline and accountability Minnesotans expect.”

Robbins said accountability is lacking because no one in state government has been fired for failures, nor even for falsifying records—a finding that the Office of Legislative Auditor, a state watchdog, released early this year.

The new report from Robbins’s committee was released May 13, the same day that Vice President JD Vance, who heads a new anti-fraud task force, announced that the federal government was withholding $1.4 billion from home health and hospice operations suspected of fraud across the nation. So far this year, fraud concerns prompted federal officials to withhold $350 million from Minnesota’s Medicaid program.

Five Republicans including Robbins prepared the report. The committee’s trio of Democrats were invited to prepare their own version, mirroring a practice used in Congress.

Two Democratic committee members at the meeting, Reps. Dave Pinto and Emma Greenman, did not say whether they would take that step. Both disputed what they called “partisan” characterizations in the report; Pinto and Greenman abstained from voting on the GOP-authored report. All four Republicans who were present voted to accept it.

Republican Rep. Isaac Schultz noted that despite allegations of partisanship, he sees signs of cooperation between the two parties. Just two weeks ago, the legislature approved “four great fraud-prevention bills on a bipartisan basis that were supported by members of this committee,” Schultz said, adding that one such bill called for “stopping grants going to convicted fraudsters.”

Remedies Proposed

The 84-page report contains numerous recommended changes in agency procedures and culture, and highlights broken internal processes.

For example, a law requires the Department of Human Services to annually review whether Medicaid beneficiaries are indeed eligible. The agency regularly skipped those verifications, and had conducted none since 2020, the report says, possibly costing “tens of millions of dollars.”

Under pressure from the committee and the public, the department conducted a review on March 20. It found “31,529 ineligible Minnesotans were receiving benefits,” who were then removed from the rolls, the report says.

Agency bureaucrats, who “viewed their role as supportive consultants rather than providing actual oversight” as they doled out taxpayers’ money, must instead use their authority to withhold payments and take other action, the report says.

The report also calls for agencies to log whistleblower complaints and hotline reports, then report those, along with actions taken, to lawmakers.

Fraud concerns and suspicious billing trends need to be tracked and reported too, the report says.

Another major recommended change: “Require electronic attendance records for child care, adult day care, sober homes, autism centers ... and other billable services ... before payments can be made.”

Committee’s Value Debated

The committee—the first of its kind in state history—began working in January 2025, nearly a year before Minnesota’s massive fraud scandals gained widespread national attention and sparked multiple federal probes.

As Robbins opened what could be the committee’s final meeting, she encouraged state lawmakers to re-establish the committee when the legislature reconvenes next year.

“The work we’ve done has hopefully carved a path for the next legislature in the next biennium to continue this important work,” she said, calling it “historic.”

The Republican lawmaker withdrew her bid for the governorship May 1, saying she would fight for improvements “from the outside” after her current term as a state representative expires in January 2027.

“It’s going to take many years, unfortunately, to undo the damage that has been done to taxpayers and vulnerable residents,” Robbins said. “But we must continue to expose the fraud, to strengthen internal controls and to make sure that fraudsters and agency officials are held accountable.”

Democrats Pinto and Greenman said the committee should have proposed legislation that could spark meaningful changes.

“Fighting fraud is urgent. Solutions were needed now,” Pinto said.

Robbins and other Republicans responded that the committee’s role was investigative, not legislative, and that the committee’s findings did inspire proposed laws.

Greenman said the document contains “misleading” information, and “no Democratic leader [is] left undisparaged” in the report. She defended the work of Minnesota Attorney General Keith Ellison in prosecuting fraud cases, and said the report fails to give him due credit.