ST. PAUL, MN — Republican members of the Minnesota House Fraud Prevention and State Agency Oversight Committee issued a forceful response Monday following Governor Tim Walz’s announcement that he will not seek re-election, emphasizing that the Governor’s departure does nothing to resolve what they describe as the largest and most pervasive fraud scandal in Minnesota history.
“For seven years, Governor Walz had the authority and responsibility to stop Minnesota’s growing fraud crisis, yet he failed,” said Rep. Isaac Schultz, a member of the House Fraud Committee. “The fact that he is stepping aside does not undo the damage, nor does it restore the billions of taxpayer dollars lost on his watch.”
Legislative auditors, whistleblowers, investigative journalists, and Republican legislators repeatedly warned the Walz Administration about systemic vulnerabilities across state-administered programs. Those warnings went largely ignored or were downplayed, even as fraud expanded across multiple agencies and programs.
According to the U.S. Attorney’s Office in Minnesota, as much as $9 billion in fraud is now expected across 14 high-risk Medicaid funded services. “These criminal networks didn’t appear overnight,” Schultz said. “They flourished because the administration failed to act, failed to enforce internal controls, and failed to take whistleblowers seriously.”
Since its first hearing in February 2025, the House Fraud Prevention and State Agency Oversight Committee has conducted 15 public hearings, uncovering repeated failures in internal controls and oversight within state agencies.
The committee has:
- Exposed systemic weaknesses that allowed fraud to spread unchecked
- Championed expanded whistleblower protections
- Created MNFraud.com, a centralized portal to securely report fraud
- Passed bipartisan legislation strengthening internal controls, tracking fraud risk in proposed legislation, and establishing a new state crime for kickbacks
After years of inaction by Walz and his administration, the federal government was forced to intervene. The Department of Justice, FBI, DHS, HHS, and other agencies are now conducting sweeping investigations in Minnesota—issuing thousands of subpoenas, executing search warrants, freezing payments, and securing dozens of convictions in fraud cases spanning multiple state programs.
Only after the scale of fraud became undeniable did the Walz Administration begin pausing payments, halting provider enrollment, and requiring pre-payment review which are steps the administration had statutory authority to take years earlier.
“Minnesotans are rightly outraged,” Schultz said. “Fraud is not a partisan issue — it is a crime. And it is working families, farmers, and small businesses who pay the price.”
The Work Is Not Finished
Committee members stress that Governor Walz’s exit does not mark the end of Minnesota’s fraud crisis and Minnesotans must remain vigilant.
“Switching Walz out for another Minnesota Democrat as Governor is about as effective as swapping out the deck chairs on the Titanic of fraud. We cannot continue on this path of destruction by trusting one of Walz’s political allies to clean up the mess.”
The House Fraud Committee says it will continue working closely with federal law enforcement and the Office of the Legislative Auditor during the upcoming session to ensure fraud is prosecuted, taxpayer dollars are recovered, and systemic failures are permanently corrected.
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