Walz oversaw worst pandemic fraud in nation; $250 million stolen from program to feed kids

Plenty of governors’ states were bilked by pandemic relief fraud, but Minnesota Gov. Tim Walz oversaw the most egregious case.

Roughly $250 million that was intended to pay for meals for hungry children went instead into the pockets of fraudsters, according to federal prosecutors who charged 70 people with operating the massive scheme.

A state audit said the Minnesota Department of Education missed repeated warning signs. The audit doesn’t specifically fault the governor, but Rep. Lisa Demuth, the top Republican in the state House of Representatives, said the problem rests with him.

“One hundred percent of the fraud lands on the shoulders of Gov. Walz,” she said. “We have systemic fraud in the state of Minnesota, and it has not been taken seriously.”

The programs at issue fund free meals at child care and aftercare programs. During the summer, they provide meals for children who get free lunches during the school year.

During pandemic school shutdowns, the second program was tasked with delivering meals to children. Providers, seeing dollar signs, rushed to join the program, and fraud bloomed.

Feeding Our Future is a nonprofit that prosecutors say helped siphon money to fraudsters.

One woman was paid $7 million to serve more than 2 million meals and pleaded guilty. She said she did serve some meals but nowhere near what she had claimed in her reimbursements. She has been ordered to pay back more than $5 million.

At the height of its operations, Feeding Our Future claimed to have doled out 11.8 million meals in April 2021 alone for $32 million. After that, the state became more stingy in approving Feeding Our Future’s claims. It ousted the organization altogether in January 2022 after the FBI executed search warrants.

Minnesota’s legislative audit office said the state Education Department, which ran the program, was out to lunch.

Complaints have been rolling in since 2018, but the state has failed to follow up on many of them. Sometimes, it allows Feeding Our Future to investigate itself. In at least two cases, the department declares Feeding Our Future to be “seriously deficient,” which should have triggered either a major course correction or the termination of the program. Instead, the state “deferred” those consequences.

It’s now an issue for Mr. Walz, the Democratic governor whom Vice President Kamala Harris this week tapped as her presidential running mate.

“The buck’s got to stop somewhere,” said Bill Glahn, a policy fellow at the Center of the American Experiment, a Minnesota think tank. “The Department of Education is a Cabinet-level agency. He appoints the commissioner and then several layers of bureaucrats below that. It falls to him.”

Mr. Walz’s office didn’t respond to a request for comment. After the June audit, it sought to distance the governor from the scandal.

“Feeding Our Future was an appalling abuse of a program intended to feed kids. But those involved have not escaped accountability — dozens of have been charged, and several are now behind bars,” his office told Minnesota media outlets. “The state has taken strong steps to find and eliminate vulnerabilities in government programs and we are constantly evaluating ways to improve.”

Nobody has been fired in connection with the scandal. When state legislators questioned Willie Jett, who now heads the department but wasn’t there during the fraud, he said he wouldn’t be parceling out blame, Mr. Glahn said.

The Minnesota Department of Education didn’t respond to an inquiry seeking data on how much of the stolen money has been recovered, but a report by WCCO-TV put the figure at about $50 million as of June.

The trouble for Mr. Walz is that Feeding Our Future isn’t a one-off.

Within days of issuing its damning report on the meals program, the state auditor reported on another pandemic program that Mr. Walz signed into law to distribute $500 million worth of checks to front-line workers.

The auditor said as much as $200 million was misspent. That includes 290 people who were dead before the payments were made. With the program capped at $500 million, the more than 1 million beneficiaries each received a $487 check. Ms. Demuth said those checks could have been more than $800 apiece if Mr. Walz’s administration had weeded out the fraud.

The auditor faulted the state administration for playing with taxpayer money, saying officials “don’t necessarily approach their work with an oversight and a regulatory mindset.”

Since 2022, Ms. Demuth has tallied 13 legislative auditor’s office reports finding fraud, or at least the risk of fraud, in government programs.

Mr. Glahn, who maintains the Minnesota Scandal Tracker, said Mr. Walz’s team was more worried about the people getting the money than those paying the bills.

“Throughout state government, there’s this lax attitude toward fraud,” he said.

Other states also experienced massive pandemic fraud.

California’s unemployment system was a target for scammers across the country and indeed worldwide because it failed to check identities. Nevada recently acknowledged that it paid $2 billion in bogus unemployment claims.

Minnesota was deemed better than average in unemployment fraud.

The brazenness of Feeding Our Future overshadowed that performance.

The issue grew more dramatic this year as the first group of defendants went to trial. A juror revealed that someone left a bag with $120,000 in cash at her home, with a promise of more, if she voted to acquit.

Five people have now been charged with the bribery attempt, and one has agreed to plead guilty.

Ironically, one of the men now charged in the bribery case was acquitted in the meals scandal. Because of the bribery case, he remains behind bars.