Walz administration ignored fraud warnings as billions vanished, House oversight report alleges

A Republican-led congressional oversight report alleges that senior Minnesota officials, including Gov. Tim Walz, D-Minn., failed for years to act on warnings about fraud in the state’s social services programs, allowing hundreds of millions of dollars in confirmed or alleged losses and placing billions more at risk.

The Walz administration had the power to stop fraudulent payments to high-risk entities receiving federal nutrition and Medicaid funds, but the state "repeatedly failed to act" after officials raised concerns, according to a 205-page final staff report released by the House Oversight Committee on Monday.  

Congressional investigators found that concerns about potential racial discrimination claims — rather than legal constraints — contributed to the Walz administration's decision to continue paying providers suspected of fraud. The committee also spoke to nearly 30 whistleblowers, some of whom accused the Walz administration of retaliation against state employees for sounding the alarm about potential fraud.

"Fraud warnings were elevated to the most senior levels of the Minnesota state government, meaningful corrective action was delayed or avoided, and payments continued long after credible signs of fraud emerged," the report reads in part.

OWNER OF DAYCARE IN VIRAL NICK SHIRLEY VIDEO CHARGED IN $4.6M DAYCARE FRAUD SCHEME, PROSECUTORS SAY

The committee found Minnesota is estimated to have lost $300 million in stolen federal nutrition funds intended to feed hungry children during the COVID-19 pandemic and that as much as $9 billion in Medicaid billing may have been fraudulent, an estimate attributed to a federal prosecutor and disputed by Walz administration officials.

Walz was allegedly aware of fraud associated with the now-defunct Feeding Our Future nonprofit that operated a constellation of fake meal sites as early as 2020, but payments continued flowing to the group for roughly two more years. The oversight panel also found Walz gave conflicting answers about when he first learned of the sweeping meal fraud. 

Federal prosecutors have charged more than 110 individuals in connection with various fraud schemes in the state. Many defendants in the Feeding Our Future case have been identified as members of Minnesota's Somali immigrant community, in connection with various fraud schemes in the state. Some of the convicted fraudsters used the stolen money for luxury purchases and state officials have investigated whether a portion of it was funneled overseas to aid terrorist groups in Somalia and the Middle East.

"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 in a statement. "It is now clear the Walz Administration chose to protect the system rather than protect the taxpayer."

The report caps a months long investigation into the Walz administration's handling of widespread fraud, which began in late 2025 and included hearing testimony from Walz and Attorney General Keith Ellison as well as members of the Minnesota state legislature's fraud committee. Nine current and former state officials also participated in transcribed interviews with congressional investigators.

The panel is also probing alleged health care fraud in California and Ohio as part of Republicans' ongoing "war on fraud."

MINNESOTA TAXPAYER DOLLARS FUNNELED TO AL-SHABAAB TERROR GROUP, REPORT ALLEGES

The committee sent a letter to Vice President JD Vance urging a full review of Minnesota’s social services programs for potential fraud vulnerabilities, following the report’s findings.

Vance's anti-fraud task force has led to the arrest of at least eight people who allegedly participated in health care fraud schemes and the freezing of $1.3 billion in payments to home health and hospice providers suspected of defrauding the government. 

Earlier this year, the Trump administration suspended nearly $260 million in federal Medicaid funding to Minnesota over the Walz administration’s alleged failure to crack down on fraud.

The Trump administration has also required states to show they are aggressively probing potential Medicaid fraud or risk losing federal funding.

The report also comes as the House is expected to consider a slate of fraud-prevention bills this week. Republicans have argued that new legislative tools are necessary to prevent fraud at the state level amid alleged inaction.

The federal government loses an estimated $233 billion to $521 billion annually to fraud, according to a 2024 Government Accountability Office report.