Dear Neighbor, We start the 2026 session this week in St. Paul with optimism in the air as we prepare to tackle major challenges and do the work Minnesotans are counting on us to do. As was the case last session, bipartisanship will be essential for any bill to pass the House, which remains in a 67-67 tie. Radical partisan bills will not get the job done for the citizens of Minnesota, and we must spend our time on bills where bipartisanship can be actualized. The state’s budget is already set for this biennium, so there’s no pressure to meet fiscal deadlines to keep our government funded and operating. With that subject off the table, here’s a look at just some of what is in store this year: Fraud  Minnesota’s fraud problem has again made national news in recent weeks, and it remains a top priority for the upcoming session. There no disagreement among lawmakers that our state needs to strengthen oversight and accountability in state programs to combat rampant fraud. One way we could make this happen would be for the House to pass a bill the Senate approved 60-7 last session to create a new independent Office of the Inspector General. This OIG would not be inbedded within the Department of Human Services controlled by the Walz Administration, instead, it would operate as an independent office with full investigative and enforcement authority. As previously noted, Minnesota’s former top federal fraud prosecutor Assistant U.S. Attorney Joe Thompson said that “fraud tourism” has taken root in Minnesota because our fraud prevention system is so weak that people come from elsewhere to scam taxpayers. This is now starting to play out in the courts. Last week, two men from Philadelphia reportedly pleaded guilty in federal court to a $3.5 million fraud scheme targeting Minnesota’s Housing Stabilization Services program (HSS), which was intended to help vulnerable and homeless residents secure and maintain housing. Anthony Jefferson and Lester Brown reportedly traveled repeatedly from Philadelphia to Minneapolis to enroll individuals in the HSS program and then billed the state for services that were never provided. They marketed themselves as “The Housing Guys,” rented office space here, and used artificial intelligence to fabricate client records when insurers questioned their claims. Both admitted to wire fraud in connection with the scheme. Under plea agreements, both face several years of prison time and are awaiting sentencing. This case reflects broader challenges with oversight of publicly funded assistance programs in Minnesota and underscores the need for stronger fraud prevention and accountability measures. Where is the fraud czar?  In December, Gov. Walz introduced Tim O’Malley as the state’s first-ever director of program integrity (The Fraud Czar). The governor had taken a lot of heat for allowing fraud to spiral out of control under his administration. Installing O’Malley was sold as a move to strengthen fraud prevention and protect taxpayer dollars in state programs. The problem is nobody seems to be sharing details of how Mr. O’Malley has been serving in his new role, per a recent KSTP article: “5 EYEWITNESS NEWS asked the Governor’s Office about what’s taken place since their Dec. 12 announcement, and when we could hear the first update. At the time of publication, 5 EYEWITNESS NEWS had yet to hear back from the Governor’s Office.” The same article indicates “Mr. O’Malley is kindly declining an interview at this time.” This lack of transparency and accountability by a new “director of program integrity” drips with irony. Let’s hope this changes because our state is hemorrhaging untold billions of dollars to fraud and it needs real action, not more lip service and empty promises. Stopping fraud is not a partisan issue, so let’s put taxpayers first, work together to stop the fraud and hold criminals accountable. New program ripe for fraud  Minnesota’s new paid family and medical leave program launched January 1st. This program is one of the largest tax increases in state history, well over $1.5 billion per year as a new payroll tax and likely to increase in the future. It is also the largest labor mandate Minnesotans have seen in a generation. . In 2023 under the Democrats' trifecta, they authorized up to 400 new state employees and spent nearly a billion dollars in start-up costs. And reports of attempted fraud in this program already are surfacing. Officials say the program has received just over 38,000 applications barely one month into existence, but only approved 13,000, costing $30 million so far. Said another way, 1/3 of the 38,000 applications in the first month were denied, many of which were fraudulent, and another 1/3 are still being processed. Several suspected fraud cases have been identified and referred to the Minnesota Bureau of Criminal Apprehension, though exact numbers have not been disclosed. I'd call that a rough start. The legislature faces some difficult decisions on PFML. Do we just wait for more problems to arise, or do we tighten up qualifications and pass other common-sense improvements? Here is a clip of my Congressional Oversight Hearing exchange with Congressman Staber about just a few of the problems with PFML. State grant shortfall Last spring, I worked hard as Chair of the House Higher Education Finance and Policy Committee to eliminate a major State Grant Program shortfall through spending cuts and policy changes. Eight months later and here we are again, with the program facing another $102 million shortfall due, in part, to an influx of people enrolling at our state colleges and universities with high financial needs responding to the North Star Promise program's offer of free education. I look forward to addressing this issue in our Higher Education Committee. |