ICYMI: Walz's $9 Billion Problem: Minnesota Delegation Demands Answers on Massive Fraud Scandal
WASHINGTON, D.C. — In case you missed it (ICYMI), Republican Study Committee members Reps. Brad Finstad, Pete Stauber, and Michelle Fischbach sent a letter to Minnesota Governor Tim Walz demanding answers for the $9 billion fraud scandal that exploded under his watch. The letter gives Walz until January 5 to commit to full cooperation with federal investigations. Leading government prosecutors revealed fraud across Minnesota's social services potentially exceeds $9 billion in stolen taxpayer money, involving fake childcare facilities and fraudulent Medicaid billing that triggered investigations from the FBI, Treasury Department, and Homeland Security.
Independent journalist Nick Shirley's viral investigation exposed childcare centers receiving millions in taxpayer dollars despite providing zero services to children, bringing national attention to the scale of fraud in Minnesota. Meanwhile, Walz's office allegedly retaliated against whistleblowers who tried to sound the alarm, prompting the Minnesota delegation to demand full cooperation with federal investigations and his recusal from probes to ensure transparency.
Read the full letter below:
Governor Walz,
We write to you as members of Minnesota’s Congressional Delegation, and as Minnesotans who have watched with alarm as the government fraud crisis gripping our state grows more serious by the day. Eliminating fraud, which robs the American people of their money and dilutes the value of the government services financed by hardworking taxpayers, is a fundamental principle of good governance and should not be partisan. As the scale of the fraud crisis continues to unravel in our state, we write to you in the hopes that you will join us in our commitment to root out the insidious fraud that has gripped social services in Minnesota.
Last month, after years of investigative reporting by local journalists like Bill Glahn, Liz Collins, and Lou Ragase, the rest of the nation was finally exposed to the stunning and unacceptable level of government fraud that Minnesotans have witnessed developing in our state for years, primarily under your watch as Governor. In late November, it was revealed that your office had “retaliated against whistleblowers”, dismissing serious allegations of taxpayer fraud and disempowering Minnesota’s Office of the Legislative Auditor from engaging in reasonable oversight of the disbursement of state and federal finances. Recently, independent reporter Nick Shirley reported that multiple “childcare facilities” in Minnesota, many run by foreign nationals from East Africa, received millions of dollars in taxpayer funding despite failing to prove they were actually caring for children and despite scores of criminal fraud convictions in recent years.
All told, leading government prosecutors now fear that the scale of taxpayer fraud in Minnesota exceeds over $9 billion in stolen funding. Not only will this be the largest fraud scandal in U.S. history, but it will also contribute to the nearly $40 trillion in debt facing our nation. It is clear that these are not isolated incidents involving a few bad actors; nor are the consequences of this crisis contained within the borders of our state. According to the Minnesota Department of Management and Budget, one-third of Minnesota’s budget comes from federal dollars, including substantial support for the state’s Child Care Assistance Program. As a result, taxpayers around the country have become implicated in this scandal, as their hard-earned money is flowing into programs that clearly lack the necessary guardrails to prevent rampant fraud.
Minnesotans, and the American people at large, deserve answers. What has happened in our state is nothing short of an illegal transfer of money from hardworking taxpayers to criminal actors, many of whom entered our country as foreign nationals and repaid our hospitality with absolute contempt for our laws and values. It is with great concern for our constituents, and for every American, that we ask that you respond to the following yes or no questions by January 5, 2026:
1. Will you commit to fully cooperate with the Federal Bureau of Investigation, the Department of the Treasury, the Department of Labor, the Department of Homeland Security, the Small Business Administration, and all other federal agencies that have opened investigations into taxpayer fraud in Minnesota?
2. Will you commit to fully cooperate with the House Oversight Committee’s investigation into taxpayer fraud in Minnesota, complying with all future document requests and making yourself and your administration available as needed for the Committee to conduct its investigation?
3. Will you commit to recusing yourself entirely from all federal, state, and local investigations into taxpayer fraud in Minnesota, ensuring a full, independent, and transparent investigation?
The answers to these questions are not only important to us, but to many local leaders across Minnesota who cannot afford to bear the brunt of continued budgetary mismanagement. Just last week, mayors from cities across Minnesota wrote a letter sounding the alarm about the seriousness of the growing fiscal crisis. Failure to address rampant taxpayer fraud with the seriousness this issue warrants risks further exacerbating the underlying economic challenges our state is facing after years of heavy-handed government mandates and out of control spending.
Just a few weeks ago, you promised Minnesotans that when it comes to combating taxpayer fraud, the “buck stops with me.” So far, Governor, the only thing that has stopped is your willingness to answer for the $9 billion that went straight to fraudsters while hardworking taxpayers footed the bill. This crisis has brought great shame and embarrassment to our state, and we sincerely hope you provide prompt and straightforward answers to the questions we have raised and that you will work in partnership with the Trump Administration to restore integrity to our state’s welfare services and ensure that another crisis of this magnitude never occurs again.
Sincerely,
Reps. Pete Stauber (MN-08), Brad Finstad (MN-01), and Michelle Fischbach (MN-07).