What to know about the House's latest report on Minnesota social services fraud

An updated federal report alleges top Minnesota leaders knew about widespread fraud in social services programs but repeatedly failed to stop it - the latest partisan fallout from the ongoing fraud crisis.

The 200-page document, titled "The Cost of Doing Nothing: How Tim Walz and Keith Ellison Fueled Minnesota's Fraud Explosion," is a revised, more detailed report from the Republican-led U.S. House Committee on Oversight and Government Reform that skewers the Democratic governor and attorney general's response to alleged wrongdoing in programs intended to help vulnerable Minnesotans.

The committee also released a report in March when Walz and Ellison testified in front of the committee.

The Trump administration has pointed to problems in Minnesota social services as a reason to launch sprawling investigations, send thousands of federal immigration agents to the state this winter and pause millions of dollars in federal funding to the state.

A Walz spokesperson noted the governor recently signed legislation to strengthen fraud-fighting efforts while calling the House committee "a joke."

The committee continues "to rehash COVID-era fraud to distract from endless wars, gas prices, ICE, and the President's insider trading," the spokesperson said in a statement. "Governor Walz is glad to see fraudsters are going to prison. If the committee is concerned about corruption, they should investigate why President Trump continues to let fraudsters out of prison."

A spokesperson for Ellison said the attorney general's office "disagrees with much of the contents of the report and believes it mischaracterizes much of what actually happened. Further, the report seems to significantly misunderstand the authority of the Minnesota Attorney General's Office."

Here's what to know about the report, which officials released Monday.

The report says senior officials in Walz's and Ellison's offices were aware of fraud concerns within the state departments of human services and education as early as 2019 but didn't stop payments to providers suspected of bad behavior.

In one prominent example, the Education Department overlooked "serious program deficiencies" when it continued to approve funding for Feeding Our Future, the disgraced nonprofit at the center of a massive, pandemic-era meals fraud scheme. State officials cited legal threats and fears of discrimination accusations as reasons to continue funding suspect providers, the report states.

Other findings: The Walz administration "retaliated" against employees who raised concerns, and Human Services officials only sounded alarms after realizing the situation might generate negative coverage.

According to the report, these missteps caused an estimated $300 million in federal child nutrition funds and potentially $9 billion in Medicaid-related funds "to be lost or placed at serious risk."

Trump administration officials have repeatedly said bogus providers stole billions from social programs. Prosecutions, to date, have uncovered hundreds of millions of dollars in fraud. That number is expected to grow as state and federal investigators root out fraud in several high-risk Medicaid programs.

State officials dismissed the idea of $9 billion in fraud as speculation.

Republicans have largely echoed the crux of Monday's report - that top DFLers were soft on fraud - in state legislative hearings in the months since Walz ended his bid for a third term, partially over criticism of his handling of social services scandals.

In January, the Minnesota Star Tribune published a report featuring several state employees who said the Department of Human Services ignored their concerns about fraud or in some cases retaliated against them.

The Department of Human Services didn't immediately respond to a request for comment. Ellison's spokesperson noted the attorney general doesn't have authority over the human services and education departments and can't stop payments to providers.

"Somehow, during their investigation, the House Oversight Committee failed to develop an understanding that different state agencies and offices have different and unique powers and roles," he said.

No. In March, the House oversight committee released an interim version of the June report that made similar claims based on testimony and documents. That prompted House Democrats on the Oversight Committee to publish a competing report accusing Republicans of singling out Minnesota for political purposes.

"Republicans' targeting of Minnesota also comes despite ample evidence of fraud in Republican-run states," the report read.

The interim report came three months after the congressional committee opened an investigation into Minnesota social services fraud.

Social service providers have folded, fraudsters have received prison sentences, and Minnesota has remained in the national spotlight in the six months since Trump first started calling out the state for rampant fraud.

Most recently, federal officials announced criminal charges against 15 people in connection with Medicaid fraud schemes in Minnesota that targeted more than $90 million in taxpayer dollars. That adds to the list of people indicted for bilking programs meant to provide housing support, autism treatment and in-home care.

Meanwhile, the Department of Human Services has faced leadership shakeups while seeking to project a hardline approach to fighting fraud to prevent federal funding freezes. Lawful providers have criticized the department for imposing new regulations they say make it harder to serve Minnesotans in need.

Earlier this month, the state temporarily cut ties with nearly two-thirds of the Medicaid service providers it was reviewing in its quest to root out fraud.

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