Walz admin accused fraud auditors of ‘racism’: Minnesota oversight report
Minnesota’s House fraud prevention committee has released an 84-page final report after a two-year inquiry into the state’s fraud crisis,alleging that Gov. Tim Walz’s administration let fraud persist by shielding Somali fraudsters from tougher state regulatory action out of concern for cultural sensitivity. The report also claims that investigators faced retaliation and were discouraged from pursuing leads-sometimes being accused of racist or xenophobic conduct-creating a climate of fear.
The committee says whistleblowers who reported suspicious billing were ignored, demoted, or retaliated against, and that auditors documenting irregular childcare payments connected to Somali-owned daycare providers were labeled “racist” or “xenophobic.” It further claims that after fraud was identified in the Minnesota Department of Human Services (DHS), DHS leadership undermined the criminal investigations unit by implementing mandatory “Continuous Enhancement” and cultural sensitivity programming aimed at correcting alleged accusations against investigators. The oversight panel contends the initiatives damaged morale and diverted time from fraud enforcement through constant meetings and additional assignments.
In a separate thread noted in the article, the report describes how some groups tied to a broader Medicaid and school-nutrition fraud scheme defended themselves by portraying scrutiny as racism, xenophobia, or Islamophobia. It recounts that Feeding Our Future consultants allegedly told Minnesota’s attorney general that donations to sympathetic officials could help protect “communities of color,” and it also notes that the nonprofit sued a state agency for delays it argued were racially discriminatory. The article concludes that, while some whistleblowers of Somali descent were said to fear testifying, the committee maintains that most identified fraud was concentrated within Somali-linked networks and that calls to “get to the truth” were suppressed by stigma and career risk.
The Minnesota House fraud prevention and oversight committee released its final report following a two-year investigation into the state’s fraud crisis, concluding this week that Gov. Tim Walz’s (D-MN) administration allowed fraud to persist by protecting Somali fraudsters from state regulators out of concerns for cultural sensitivity, even accusing rank-and-file investigators of racially profiling suspected scammers.
According to the committee’s 84-page report on “Waste, Fraud, and Abuse in Minnesota,” adopted Wednesday, when government employees flagged suspicious billing patterns to their supervisors, officials in the Walz administration ignored, demoted, and retaliated against the whistleblowers, at times accusing them of being “xenophobic” toward the subjects of these investigations.
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The taxpayer theft was primarily committed by Somali immigrants who were caught operating fake home healthcare agencies, daycares, autism treatment centers, and food pantries that fraudulently billed Minnesota’s public assistance programs for services purportedly performed.
“This is an important fact because failure to admit [that] this was largely an issue in the Somali community was one of the reasons it was allowed to continue,” the GOP-majority Minnesota House Fraud Prevention and State Agency Oversight Policy Committee wrote. “Whistleblowers were afraid to speak up for fear of being called ‘racist’ or ‘Islamophobic.’”
The legislative body, for instance, found that auditors were labeled “racist or xenophobic” when they brought attention to irregular childcare payments submitted by Somali-owned daycare providers.
WALZ RECEIVED $10,000 FROM DONORS TIED TO SOMALI-RUN DAYCARE CENTERS
Minnesota state Rep. Kristin Robbins, the committee’s Republican chairwoman, said in an interview with the Washington Examiner following the report’s release that these racially charged workplace allegations created a culture of fear that hindered fraud investigations. Whistleblowers told the committee that they were reluctant to follow up on reports of fraud, fearing retaliation or being branded as a bigot.
“Either they then didn’t pursue the claim because they were told, ‘Oh, you’ll be racist and it’s going to hurt your personnel file,’ or they didn’t want the social pressure of being considered a racist,” Robbins recalled. “It would ruin their career if they tried to get a different job and were known as a racist.”
According to Wednesday’s committee report, after rampant fraud was found within the Minnesota Department of Human Services, department leadership worked to “undermine” DHS’s criminal investigations unit, including by implementing a so-called Continuous Improvement Program that required the fraud-fighting task force to complete cultural sensitivity training.
The oversight committee found that this diversity, equity, and inclusion initiative, which the fraud prevention panel concluded was a form of corrective action for “thinly veiled accusations of racism against the unit,” led to DHS staff “continuously demeaning” members of its investigative unit.
Furthermore, per the committee’s findings, the mandatory DEI training inundated the department’s criminal investigations wing with group meetings, assignments, and other onerous tasks that took time away from actual fraud investigations.
Robbins told the Washington Examiner that it was only when some officials were willing to hold fraudsters accountable, regardless of race, that Minnesota started seeing regulatory reform.
“Look, fraud is fraud. It doesn’t matter who’s committing it,” Robbins said. “It’s a crime. But yes, the majority of the fraud was happening in the Somali community.”
She mentioned, however, that some of her committee’s most compelling whistleblowers are of Somali descent but were afraid to testify due to reputational risk in their own community.
“So it’s not that every person in the Somali community is committing fraud,” Robbins said. “It’s that there’s a web of fraudsters in the Somali community, and people were afraid to call it out.
HOW MINNESOTA’S SOMALI FRAUD INDUSTRIAL COMPLEX HAS STOLEN MILLIONS FROM MEDICAID
“We need to get to the truth, and we can’t be afraid to say the truth,” Robbins said. “And the truth is that, yes, at this point in our investigation, most of the fraud has been found in the Somali community.”
The fraudsters themselves claimed to be victims of racism as a common line of attack to fend off inquiries from oversight officials and suppress fraud reports.
At a private meeting with Minnesota Attorney General Keith Ellison (D) in 2021, operatives of Feeding Our Future, a Minnesota nonprofit organization that ran a $250 million fraud ring involving dozens of Somali-owned catering companies, similarly blamed heightened scrutiny of its operations on “racist, xenophobic, and Islamophobic” attitudes in the state government.
Consultants with Feeding Our Future suggested to Ellison, the state’s chief civil regulator, that they would donate to officeholders who would shield “communities of color” in the business sector and create an economic atmosphere “that’s fair and equal, not one where we are targeted arbitrarily and preciously by different departments because of the origin of our nation and our religion.”
Ellison agreed that state agencies were discriminating against East African business owners on the basis of race and religion, noting that a warning from the attorney general’s office “is sometimes enough to make people knock it off.”
Feeding Our Future also sued the state’s Department of Education on racial discrimination grounds for not approving new food distribution site applications as quickly as its operators wanted.
The nonprofit group oversaw a network of food distributors, many of them fraudulent, that stole school nutrition funds by claiming reimbursement for meals supposedly served. Dozens of coconspirators, mostly Somali suspects behind the shell companies, were indicted in the criminal conspiracy.
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