Comer Opens Hearing on Minnesota Fraud with Governor Walz and Attorney General Ellison

"Instead of protecting the whistleblowers, the Walz administration protected the system that enabled fraud."

WASHINGTON- House Committee on Oversight and Government Reform Chairman James Comer (R-Ky.) delivered opening remarks at today's hearing on "Oversight of Fraud and Misuse of Federal Funds in Minnesota: Part II." In his opening statement, Chairman Comer emphasized that Governor Tim Walz and Attorney General Keith Ellison presided over one of the most extensive breakdowns of oversight this Committee has ever examined. He noted how billions of taxpayer dollars were stolen from social services programs while warnings piled up, state employees were silenced, and the Walz administration chose delay and denial over action. He highlighted that the Committee has now spoken with over thirty whistleblowers who raised concerns to state leaders over extensive money laundering and fraud.

In addition, Chairman Comer submitted for the record an interim staff report titled "The Cost of Doing Nothing: How Tim Walz and Keith Ellison Fueled Minnesota's Fraud Explosion." The interim report, based on transcribed interviews with nine Minnesota state employees and documents obtained to date, includes new explosive testimony revealing that senior officials in Minnesota state government - including Governor Tim Walz and Attorney General Keith Ellison - were aware for years of widespread fraud, deliberately misled the American people about their knowledge of the fraud, possessed clear authority to safeguard taxpayer dollars, and repeatedly failed to take meaningful action.

Below are Chairman Comer's remarks as prepared for delivery.

Good morning.

Today's hearing is about a failure of leadership-plain and simple.

For years, Governor Tim Walz and Attorney General Keith Ellison presided over one of the most extensive breakdowns of oversight this Committee has ever examined.

Billions of taxpayer dollars were stolen from social services programs while warnings piled up, whistleblowers spoke out, and state officials chose delay and denial over action.

Federal prosecutors estimate that as much as $9 billion may have been stolen from just fourteen Medicaid programs administered by the State of Minnesota.

Those programs have cost taxpayers more than $18 billion since 2018, and investigators believe that half or more of that spending may have been lost to fraud.

That did not happen overnight. As our investigation has shown, it happened because state leadership failed, repeatedly, to intervene.

Governor Walz has claimed his administration addressed fraud "very early," but that claim does not hold up to the facts-his administration kept payments flowing.

In January, in the first hearing of this series, we heard from Minnesota state representatives who made clear this fraud was not hidden.

It was known, documented, and repeatedly brought to the attention of state leadership.

In case after case, state agencies identified red flags and received warnings from auditors and employees, but continued to send money out the door.

Not because they lacked authority to intervene, but because they feared lawsuits, bad press, and political backlash.

While Governor Walz hesitated, taxpayers lost billions.

Attorney General Ellison has likewise claimed his office was aggressively holding fraudsters accountable, but when his statements were tested against the record, they fell apart.

In the Feeding our Future case, Governor Walz and Attorney General Ellison publicly suggested that courts forced the state to continue payments.

The judge in that case took the extraordinary step of publicly correcting them.

The truth is the state made a choice once again to keep sending money out the door.

The Feeding our Future scandal alone involved nearly $300 million stolen from programs meant to feed children during the pandemic.

We're talking about fake invoices, meals that never existed, luxury cars, and overseas investments-all paid for by American taxpayers.

Today dozens have been convicted. The fraud was real. The warning signs were obvious, and state leadership failed to act.

The same pattern repeats across Minnesota's social services system.

In the Child Care Assistance Program, providers racked up dozens-and in some cases more than a hundred-violations and still collected millions.

Facilities shut down and reopened the same day, under new names at the same address. This went on for years.

Housing Stabilization Services, a program expected to cost $2.6 million annually, exploded to over $100 million a year.

Federal prosecutors have described it as "easy money."

Providers billed services never delivered, while the Walz administration failed to intervene until federal agents showed up.

And when state employees tried to stop this, they were silenced and retaliated against for even daring to notice the fraud.

We are taking oversight of fraud seriously, and today I hope the Democrats will do the same, but their track record is not promising.

We followed up with the whistleblowers when state leaders ignored them.

Republican staff spent 36 hours and 46 minutes in nine transcribed interviews with current and former Minnesota state officials.

Democrats, however, only asked 3 hours and 14 minutes worth of questions. That is inexcusable and frankly embarrassing. Taxpayers deserve better.

We are working with the Trump Administration, which is taking a whole-of-government approach to stop fraud before more money is stolen.

What we've uncovered in Minnesota is not a paperwork error or a few bad actors slipping through the cracks. It is a sustained failure of leadership.

Governor Walz and Attorney General Ellison were warned repeatedly. Auditors raised red flags. Employees sounded alarms. Invoices didn't make sense. And still, the money kept flowing.

While state officials hesitated, billions of taxpayer dollars were stolen from programs meant to serve children, the disabled, and families in crisis.

While whistleblowers were silenced, fraudsters got rich.

Accountability shouldn't begin only after federal prosecutors step in and clean up the damage.

Accountability should compel leaders to act and here, they didn't.

Today, this Committee expects answers, and we expect an explanation for why it took federal law enforcement, not state leadership, to finally turn off the spigot.

Before we proceed, I'd like to ask unanimous consent to enter the Committee's interim staff report titled, "The Cost of Doing Nothing: How Tim Walz and Keith Ellison Fueled Minnesota's Fraud Explosion." Without objection. So ordered.