Plenty of governors saw their states get bilked by fraudsters during the pandemic, but Minnesota Gov. Tim Walz oversaw the most egregious one yet.
Roughly $250 million that was intended to pay for meals for hungry kids instead went into the pockets of fraudsters, according to federal prosecutors who have charged 70 people with operating the massive fraud.
A state audit said the Minnesota Department of Education missed repeated warning signs that could have stopped it. The audit doesn’t specifically fault the governor, but Rep. Lisa Demuth, the top Republican in the state House of Representatives, said it all comes back to him.
“One hundred percent of the fraud lands on the shoulders of Governor Walz,” she said. “We have systemic fraud in the state of Minnesota and it has not been taken seriously.”
The programs at issue fund free meals at child-care and aftercare programs and, during the summer, provide meals for students who during the school year would be getting free lunches at school.
During the pandemic, that second program was called upon to deliver meals to kids no longer in school because of shutdown orders. Providers, seeing dollar signs, rushed to join the program, and fraud bloomed.
Feeding Our Future is a nonprofit that prosecutors say helped siphon money to fraudsters.
One woman was paid $7 million to serve more than 2 million meals. She has pleaded guilty, saying she did serve some meals but admitting it was nowhere near what she had claimed in her reimbursements. She’s been ordered to pay back more than $5 million.
At the height of its operations, Feeding Our Future claimed to have doled out 11.8 million meals in April 2021 alone, for $32 million. After that, the state began to be more stingy in approving Feeding our Future’s claims, and it would finally oust the organization altogether in January 2022, after the FBI executed search warrants.
Minnesota’s Office of Legislative Audit said the state’s Education Department, which ran the program, was out to lunch.
Complaints had been rolling in since 2018, but the state failed to follow up on many of them. Sometimes it allowed Feeding Our Future investigate itself. In at least two cases, the department declared Feeding Our Future to be “seriously deficient,” which should have triggered either a major course correction or else the termination from the program. But the state “deferred” those consequences.
It’s now an issue for Mr. Walz, the Democratic governor whom Vice President Kamala Harris this week tapped as her running mate as she seeks the presidency.
“The buck’s got to stop somewhere,” said Bill Glahn, a policy fellow at the Center of the American Experiment, a Minnesota think tank. “The Department of Education is a Cabinet-level agency. He appoints the commissioner and then several layers of bureaucrats below that. It falls to him.”
Mr. Walz’s office didn’t respond to a request for comment. But after the June audit, it sought to distance the governor from the scandal.
“Feeding Our Future was an appalling abuse of a program intended to feed kids. But those involved have not escaped accountability — dozens of have been charged, and several are now behind bars,” his office told Minnesota media outlets. “The state has taken strong steps to find and eliminate vulnerabilities in government programs and we are constantly evaluating ways to improve.”
Nobody has been fired for the scandal, and Mr. Glahns said when state legislators questioned Willie Jett, who now heads the department but wasn’t there at the time, he said he wouldn’t be parceling out blame.
The Minnesota Department of Education didn’t respond to an inquiry seeking data on how much of the stolen money has been recovered, but a report by WCCO-TV put the figure at about $50 million as of June.
The trouble for Mr. Walz is that Feeding Our Future isn’t a one-off.
Within days of issuing its damning report on the meals program, the state auditor reported on another pandemic program that Mr. Walz signed into law to hand out $500 million worth of checks to people who served as frontline workers.
As much as $200 million of that was misspent, the auditor said. That includes 290 people who were dead before the payments were made. With the program capped at $500 million, the more than 1 million beneficiaries each got a $487 check. Ms. Demuth said if Mr. Walz’s administration had weeded out the fraud, those checks could have been more than $800 apiece.
The auditor faulted the state administration for playing loose with taxpayer money, saying they “don’t necessarily approach their work with an oversight and a regulatory mindset.”
Ms. Demuth has tallied 13 different reports by the Office of Legislative Auditor since 2022 finding fraud, or at least the risk of fraud, in government programs.
Mr. Glahn, who maintains the Minnesota Scandal Tracker, said Mr. Walz’s team was more worried about the people getting the money than those paying the bills.
“Throughout state government, there’s this lax attitude toward fraud,” he said.
Other states also saw massive pandemic fraud.
California’s unemployment system was a target for scammers across the country, and indeed across the globe, because it failed to check identities. Nevada recently admitted it paid $2 billion in bogus unemployment claims.
Minnesota actually was deemed better than average in unemployment fraud.
But the brazenness of Feeding Our Future overshadowed that performance.
Things grew even more dramatic this year as the first group of defendants went to trial. A juror revealed someone left a bag with $120,000 in cash at her home — with a promise of even more cash to come — if she voted to acquit.
Five people have now been charged with the bribery attempt and one of them has already agreed to plead guilty.
Ironically, one of the men now charged in the bribery case was actually acquitted in the meals scandal. But thanks to the bribery case, he remains behind bars.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.