House Republicans grill Walz and Ellison over Minnesota’s welfare fraud scandal

By Danya Gainor, CNN

Washington (CNN) — Months after intensifying into a national political flashpoint, Minnesota’s welfare fraud scandal returned to Capitol Hill on Wednesday, where sentiment veered from accountability and allegations of a cover-up to immigration enforcement and retaliation.

The House Oversight Committee grilled Minnesota Gov. Tim Walz – who dropped his gubernatorial reelection bid amid the scandal – alongside state Attorney General Keith Ellison and the Rev. Mariah Tollgaard as part of the long-anticipated sequel to a tense January hearing over purported fraud rampaging the North Star State.

Wednesday’s hearing proved markedly somber as the witnesses and Democratic committee members echoed Renee Good and Alex Pretti’s names to underscore Minnesota’s loss amid the federal probe into alleged fraud. Democrats also hit on anxieties gripping Minneapolis’ deeply rooted Somali community in the wake of the allegations.

Several Republican members seized on their time to pepper Walz and Ellison with questions on when exactly they became aware of fraud in their state and what moves they made to deter it.

The hearing grew fiery as GOP Rep. Clay Higgins banged on the table during his questioning of Walz for not halting the flow of fraudulent funds and called on Ellison to resign. Republican Rep. Nancy Mace swapped verbal jabs with Walz after the governor couldn’t answer questions over specific funding and population numbers.

“Are you the governor of Minnesota or not?” she asked him repeatedly.

Hours before the hearing began, the GOP-run committee released a report alleging Walz and Ellison knew about credible fraud concerns years ago and didn’t act on them, despite their assertions otherwise, purportedly costing taxpayers billions.

“The people of Minnesota have been singled out and targeted for political retribution at an unparalleled scale, including blocking Medicaid reimbursement to our state just last week,” Walz said in his opening statement. “Under the guise of combating fraud, the federal government has flooded Minnesota with mass untrained and unaccountable agents who are wreaking havoc in our communities.”

Allegations of fraudulent safety net programs go back nearly a decade

Fraud allegations in Minnesota shifted back into the national spotlight a day after Christmas, when a 23-year-old conservative content creator claimed – with little evidence – on YouTube that Somali-run childcare centers in Minnesota were fraudulently taking funding meant to provide childcare for low-income families. The video, which has racked up almost four million views, was boosted by Vice President JD Vance, FBI Director Kash Patel and tech billionaire Elon Musk.

As a result, the Department of Homeland Security and the FBI ramped up their presence across the Twin Cities, and federal funding for childcare in the entire state was temporarily frozen pending a federal investigation of the allegations.

The purported schemes go back nearly a decade and include allegations of fraud in the Somali community focused on Feeding Our Future, a nonprofit prosecutors said falsely claimed to provide meals to needy children during the Covid-19 pandemic.

Federal charges were brought against dozens of people — most of them Somali — beginning in 2022.

The latest allegations of scandal prompted a fresh gush of fury and vitriol from the Trump administration and state GOP leaders, who have demanded a crackdown on the spending of taxpayer dollars for social services they said were never provided.

Witnesses insisted support from both sides of the aisle will be necessary to ultimately curb the fraud, with Ellison concluding after the hearing that “the solution is fundamentally bipartisan. We do need to come together to protect the public dollar, to make sure people can benefit from the programs that they’re designed to benefit from.”

The Trump administration announced last week it is withholding more than $250 million in Medicaid funds from Minnesota, claiming widespread fraud as it escalates a pressure campaign on the state’s Democratic leadership. The state has sued the administration for the move, calling the block on funds “unlawful.”

“Prosecuting Medicaid fraud is very important work that we do and do it every single day. We’ve secured millions of dollars for people. We’ve gotten millions in restitution. We’ve convicted people and held them accountable,” Ellison said during the hearing.

Prosecuting fraud in Minnesota “has been devastated by the actions of this administration,” he said, adding the Trump administration has redirected FBI agents to immigration-related operations and Minnesota prosecutors have resigned “as a matter of conscience” when they were instructed to investigate Good’s widow after her death.

Committee releases report with new testimony saying leaders failed to intervene

After the committee first launched its investigation into the scandal in December, Chairman Comer wrote to Walz and Ellison asking for “documents and communications” showing what they knew about the fraud, and whether they did anything to limit the investigation into it.

Comer later expanded the investigation, requesting resources and reports from the US Treasury and Department of Justice.

Walz and Ellison have defiantly denied any wrongdoing during their time as Minnesota officials.

The committee released a lengthy report in the hours before the two were set to testify Wednesday, asserting that they failed to act in the face of fraud, despite their authority to intervene.

“As a result, potentially billions of American taxpayer dollars were allowed to flow to fraudulent actors, while vulnerable populations were harmed and whistleblowers were ignored, sidelined, and retaliated against,” the report said. The committee said its investigation remains ongoing.

The 54-page report includes portions of transcribed interviews with several former and current Minnesota state officials who committee members questioned for roughly 40 hours over the course of its investigation. Officials answered questions about alleged integrity issues, pressures to keep quiet and oversight processes in Walz’s administration.

During Wednesday’s hearing, Texas Republican Rep. Brandon Gill pointed to testimony in the report where officials described Walz’s office as retaliatory, denying vacations and promotions to employees who have tried to speak out against fraud.

“As you have said, the buck stops with you, and your administration has treated whistleblowers like absolute dirt, and that’s a big reason why we’ve seen so much of our hard earned tax dollars defrauded,” Gill said.

Responding to a question about whether whistleblowers should be retaliated against, Walz said. “Absolutely not. They have strong protections in Minnesota.”

First hearing over fraud drew shouting and partisan fury

The committee’s first fraud hearing in January featured ardent testimony from three Republican members of the Minnesota House of Representatives who, the chairman of the Oversight Committee says, “sounded the alarm” on the fraud years ago: Kristin Robbins, Walter Hudson and Marion Rarick.

They said tax dollars intended for childcare aid in their state are being absconded by criminals to purchase luxury homes and cars, property in Turkey and apartment buildings in Kenya – and that local Democrats have known about it.

“The Tim Walz administration has utterly failed to protect Minnesota taxpayers and vulnerable citizens, ignoring years of credible reports,” Robbins said in her opening statement.

As the contentious hearing unfolded in Washington, an ICE agent shot and killed 37-year-old Good hundreds of miles away on the streets of Minneapolis, setting off what would become weeks of unrelenting protests and lawsuits against the administration.

The January hearing grew heated at moments, with lawmakers accusing one another of going “off the rails” and calling for decorum, as flaring tensions delivered more political sparring than clarity.

Much of January’s discussion was framed around how the Feeding Our Future scandal informed the new fraud allegations. Some Republicans on the committee moved beyond claims that Walz’s administration overlooked the fraud, but that it actually had political incentive to perpetuate it after taking office in 2019.

Further contention erupted during the hearing following claims by witnesses and some Republican congressmembers that individuals have weaponized false accusations of racism to deter the investigation into alleged fraud.

Robbins denied what she called “fake allegations of racism and Islamophobia” regarding investigations of fraud in Minnesota. “It is true that the majority of the fraud in Minnesota has taken place in the Somali community, and it is also true that some of our best whistleblowers are from the Somali community.”

Democratic Rep. Rashida Tlaib of Michigan, one of the first Muslim women to join the US Congress, asked the Minnesota lawmakers to keep investigating fraud, but to be cautious of their work being applied as a “racist trope.”

“Do your job, but don’t allow your job and what you’re doing to be utilized as a racist trope, that all Somali Americans are criminals, that Muslims are demons,” the congresswoman said. “It’s incredibly dangerous.”

CNN’s Whitney Wild and Isa Mudannayake contributed to this report.

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