Minnesota fraud probe heads back to House Oversight Committee as Walz and Ellison testify

By Danya Gainor, CNN

Washington (CNN) — Minnesota’s welfare fraud scandal is returning to Capitol Hill months after it intensified into a national political flashpoint and federal agents swarmed the Twin Cities in an unprecedented immigration crackdown.

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

Hours before the hearing was set to begin, 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.

Wednesday’s hearing, which marks Walz’s and Ellison’s first official appearances in the federal probe into the fraud scandal, is expected to focus on similar threads. Republican Chairman Rep. James Comer declared the hearing part of the Congress’ duty “to conduct rigorous oversight of this heist and enact stronger safeguards.”

“We look forward to questioning Governor Walz and Attorney General Ellison under oath to ensure transparency and accountability for the American people and to consider meaningful reforms that prevent waste, fraud, and abuse of taxpayer funds,” Comer said.

Allegations of fraudulent safety net programs go back nearly a decade

Purported fraud 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 4 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.

Committee releases report with new testimony hours before hearing set to begin

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.

Ellison “will discuss his strong record of prosecuting and convicting people who steal from Medicaid, as well as his work going after private sector fraudsters,” during Wednesday’s hearing, a spokesperson for his office told CNN. The attorney general also plans to “encourage members of the committee to set partisan politics aside and work across party lines to fight fraud and protect Medicaid.”

CNN has reached out to Walz for comment.

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.

“Governor Walz and Attorney General Ellison are appearing before the Committee because the American people deserve clear answers about how this rampant fraud was allowed to flourish under their watch,” Comer said in a statement.

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 Renee 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 contributed to this report.

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