House Oversight report: Walz and Ellison knew about massive welfare fraud for years, punished whistleblowers instead

Senior Minnesota government officials, including Gov. Tim Walz and Attorney General Keith Ellison, were aware of widespread fraud in the state's federally funded welfare programs for years and failed to act, according to a report released Wednesday by the House Oversight Committee. Worse, the report concluded, they retaliated against the employees who tried to sound the alarm.

Walz and Ellison are scheduled to testify before the committee Wednesday at 10:00 AM. The committee gathered testimony from nine current and former Minnesota state officials as part of an investigation launched in December.

Oversight Committee Chairman James Comer did not mince words:

"Testimony obtained by the Committee reveals that Gov. Tim Walz and Attorney General Keith Ellison were aware of widespread fraud in social service programs, lied about their knowledge of the fraud, and retaliated against employees who dared to raise concerns."

Comer followed that with a line that captures the full scope of the failure:

"Instead of protecting vulnerable Americans, they handed over billions in taxpayer dollars to fraudsters and threw their own state employees under the bus."

A fraud scheme that grew while officials watched

The centerpiece of the scandal is Feeding Our Future, a nonprofit whose founder and executive director, Aimee Bock, was eventually charged and convicted in connection with what the Department of Justice called the largest pandemic-era fraud scheme ever identified. The DOJ first charged 47 people in 2021 as part of a $250 million scheme, as Just The News reports.

But the fraud didn't begin with the pandemic. It festered for years in plain sight.

Minnesota's legislative auditor issued warnings dating back to 2018 about persistent signs of fraud in the state's childcare benefits program. The legislature and state officials were made aware of pervasive fraud in the Child Care Assistance Program. An MDE official confirmed that complaints about Feeding Our Future existed as early as 2018.

According to testimony from MDE Assistant Commissioner Daron Korte, complaints poured in between 2018 and 2021. Korte told investigators that Gov. Walz's office would have been informed of Feeding Our Future concerns by April 2020, and that Attorney General Ellison's office "would have received a notice also."

Former DHS Commissioner Tony Lourey told congressional investigators he was in communication with Walz's then Chief of Staff Chris Schmitter about fraud concerns in the Child Care Assistance Program as early as 2019.

That puts the governor's office on notice years before anyone faced consequences.

The agency that tried to act, then folded

The Minnesota Department of Education did, at one point, attempt to do the right thing. In March 2021, MDE found Feeding Our Future was in "serious deficiency" and moved to cut off all funding to the organization.

It resumed payments by April 30, 2021.

What happened in those weeks tells you everything about how bureaucratic cowardice enables fraud. Aimee Bock threatened MDE with a lawsuit in April 2021, claiming racial discrimination if funding was terminated. Feeding Our Future formally filed the lawsuit in November, alleging violations of state law.

Korte's testimony revealed an agency that knew the right answer but couldn't get anyone above them to put it in writing:

"I think they were supportive generally of what we were saying we wanted to do, but they weren't willing to provide anything in writing. And we felt like, without having that backup from USDA that we just didn't have firm enough ground to stand on to continue to deny those sites in the face of the threatened lawsuit."

The U.S. Department of Agriculture wouldn't back MDE up on paper. So MDE caved and approved an additional four sites, even after identifying fraud concerns. Korte acknowledged the agency could have acted unilaterally but said they feared it would "end up in court and had the potential to be overturned."

A nonprofit under investigation for fraud played the race card, and state officials folded rather than fight. The fraudsters got paid. The taxpayers got the bill.

What Walz says he knew, and when

Walz originally said he was informed about suspicious activity related to Feeding Our Future in November 2020, but could not recall the precise date. He has previously acknowledged there is fraud in his state but said his administration has made it a priority to root out for years.

The committee's findings tell a different story. Korte's testimony places the governor's office in the loop by April 2020. Tony Lourey's account pushes it back further, to early 2019. Warnings from the legislative auditor reach all the way to 2018.

So we have a governor who says he made rooting out fraud a priority, but whose administration:

• Received warnings starting in 2018
• Had direct communication about fraud concerns as early as 2019
• Was formally notified about Feeding Our Future by April 2020
• Watched MDE briefly cut off funding in March 2021, then resume payments weeks later
• Allowed billions in taxpayer dollars to flow to fraudsters

That's not a priority. That's a pattern.

A scandal that keeps widening

Feeding Our Future was the headline-grabbing scheme, but it was not the only one. The committee investigation uncovered fresh evidence of daycare fraud as well. One investigator cited in the report claimed fraud rates could exceed 50% of all government funding for the Child Care Assistance Program. A review identified signs of overbilling in 72 of the top 100 recipients.

These fraud schemes were first reported by Just the News in the summer of 2024, when Walz was the Democratic nominee for vice president. Dozens of defendants have been implicated across the various cases. The full taxpayer cost reaches into the billions, though no precise figure has been established.

Attorney General Merrick Garland, who served during the Biden administration, called Feeding Our Future the largest pandemic-era fraud scheme ever identified. That distinction belongs to a state whose top officials had years of warnings and chose not to act on them.

The real cost of looking the other way

Every dollar that went to a fraudster was a dollar that didn't feed a child. That's the part that gets lost when fraud becomes a political story. These programs exist because Americans agreed to fund them for people in genuine need. When state officials allow those programs to be looted, they don't just waste money. They betray the people the programs were designed to serve.

The Oversight Committee's report paints a picture of an administration that received warning after warning, had the authority to act, and chose not to. When employees raised concerns, the response wasn't gratitude. It was retaliation.

Walz and Ellison will sit before the committee Wednesday. The testimony from nine of their own officials is already on the record. The question isn't whether they knew. The committee says it has the answer to that. The question is whether anyone will be held accountable for choosing to look the other way while billions vanished.

Minnesota's taxpayers already know the answer they expect.