Minnesota Fraud: Walz, Ellison testify before House Oversight Committee

WASHINGTON, D.C. (FOX 9) - Minnesota Gov. Tim Walz and Attorney General Keith Ellison are testifying before the House Oversight Committee on Wednesday morning to face questions about alleged misuse of federal funds intended for social services and Medicaid programs.

The House Oversight Committee is holding a hearing at 8 a.m. titled, "Oversight of Fraud and Misuse of Federal Funds in Minnesota: Part II."

You can watch the hearing live in the player above. Find live updates below on the hearing below.

10:42 a.m. – Walz: 'I don't care where you're coming from, if you commit fraud, you're going to jail'

Republicans like Rep. Lauren Boebert raised concerns about immigration status during Wednesday's hearing.

Fraud was a key pretext behind President Trump's recent ICE surge in Minnesota.

During the hearing, Gov. Walz made it clear that the ethnicity of the person committing fraud wasn't particularly relevant in his eyes.

"I don't care where you're coming from," said Walz. "If you commit fraud, you're going to jail in Minnesota. That's what I care about and that's what I'm here for."

During the hearing, Democrats have frequently raised criticisms of President Trump's pardons of people convicted of fraud, like Jason Galanis, who was convicted of defrauding the Oglala Sioux Nation of $60 million.

After Boebert's questioning, Rep. Comer was involved in a back-and-forth with Rep. James Walkinshaw, who mentioned Galanis. Rep. Comer brought up the fact that Galanis also had a known association with Hunter Biden and testified to the committee about Biden.

9:53 a.m. – Gov. Walz questioned on how fraud ballooned under his tenure

Rep. Byron Donalds questioned Gov. Walz on how fraud schemes were able to scale up during his reign as governor.

Rep. Donalds: "Let's talk about budgets. Governor Walz, Feeding our Future went from $307,000 in 2018 to $199,000,000 in 2021. Are you aware of this increase in budgetary costs from Feeding our Future?"

Gov. Walz: "Not specifically, but I know it increased during the pandemic."

Rep. Donalds: "The Housing Stabilization Services went from $27 million in 2021 to $105 million in 2024. Are you aware of this increase, Governor Walz?"

Gov. Walz: "Not specifically, but I know it increased."

Rep. Donalds: "Autism centers went from $24,000,000 in 2019 to $342,000,000 in 2024. Are you aware of that?"

Gov. Walz: "Not specifically again, but yes, we know the budgets."

Rep. Donalds: "And Integrated Community Supports went from $4.6 million in 2021 to $170,000,000 in 2024. Are you aware of that?"

Gov. Walz: "Again, not specifically on the numbers, but it's the budget."

8:49 a.m. – Rep. Emmer accuses Ellison of ‘quid pro quo’

Referring to a taped conversation between Attorney General Keith Ellison and future defendants in the Feeding our Future case, Rep. Tom Emmer said he was concerned Ellison had engaged in "quid pro quo."

Quid pro quo is a Latin phrase that means getting something in exchange for something else. Rep. Emmer accused Ellison of "actively obstructing" an investigation in exchange for campaign donations.

"If these concerns are proven to be true, you should be disbarred, and you should go to jail," said Emmer.

Ellison has previously addressed the conversation. During a state hearing last April, Ellison made it clear, despite listening to their concerns, he never helped the Feeding our Future members and, on the tape, not knowing he was being recorded, he rejected an offer from them to help his campaign.

8:34 a.m. – Rep. Jordan grills Walz on Feeding our Future statements

Rep. Jim Jordan scrutinized remarks made by Gov. Walz's admin explaining why payments to Feeding our Future were reinstated after fraud was first detected.

This controversy dates back to 2021 when the Department of Education stopped payments to Feeding our Future, an organization that claimed to provide meals to children during the pandemic.

Feeding our Future filed a lawsuit against the state and the state later resumed payments to Feeding our Future. Those payments continued until 2022 when federal prosecutors brought charges against Feeding our Future for fraud.

After the federal indictments came down, the state blamed a court order for payments being resumed. However, the judge involved in the suit later issued a statement saying that was untrue, and he never ordered the payments to be restarted.

Rep. Jordan: "Why didn't you tell the truth about why you restarted the payments? The payments stopped because there were concerns, obviously, or you wouldn't stop the payments. Then they're restarted a month later. What was the reason for restarting the payments?"

Gov. Walz: "My understanding was the agency believed that the court had required them to make those payments."

Rep. Jim Jordan: "And that was false, wasn't it? You repeated that. You said that, didn't you? You said the reason you restarted was because the court ordered you to do so. Is that right?"

Gov. Walz: "I don't believe that is settled yet, to the best of my knowledge."

8:18 a.m. – Gov. Walz defends fraud response

During his opening remarks, he accused the federal government of using fraud as an excuse for political retribution against him and the state.

"Under the guise of combatting fraud, the federal government has flooded Minnesota with masked, untrained, and unaccountable agents who are wreaking havoc in our communities. On the streets of Minnesota, federal agents have detained U.S. citizens who have committed no crimes. They have violated the constitutional rights of our citizens. They have ignored court orders. They have shot first and asked questions later. Time and again, they have gaslit us by demanding that we ignore what we can see before our own eyes."

8:04 a.m. – Hearing called to order

Rep. James Comer called the Committee on Oversight hearing to order and began his opening statements.

The Republican from Kentucky accused Gov. Walz and Attorney General Ellison of failures to control fraud.

"Today's hearing is about a failure of leadership, plain and simple," said Comer. "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 service programs while warnings piled up. Whistleblowers spoke out, and state officials chose delay and denial over action."

Rep. Robert Garcia offered a rebuttal in his opening remarks, criticizing President Trump of waging a personal vendetta against Minnesota.

"This is really about not just what's happening in Minnesota through that operation, but the ways that President Trump has waged his own personal war on Minnesota instead of improving systems," said Rep. Garcia. "Instead of improving systems to prevent future fraud, Trump's also cut off $259 million in Medicaid funding to the state. He's threatened federal food aid for 600,000 Minnesotans, including 200,000 kids. President Trump has tried to use fraud as his excuse for all of this, but what's really happening is violence, terror, death, destruction and ripping away services from those that need it. You don't fight fraud by issuing presidential pardons to fraudsters. You don't fight fraud by ripping away food assistance to kids."

Fraud in Minnesota

The backstory:

Federal prosecutors have described Minnesota as a target of widespread fraud schemes in recent years, particularly within state-administered social services and Medicaid programs. Some federal officials estimate that the amount of taxpayer money stolen could reach as high as $9 billion.

However, others dispute that claim, and documented cases by the Department of Justice currently only have losses in the hundreds of millions of dollars, not billions. 

But, Republican lawmakers accuse Walz and Ellison of ignoring fraud warnings and retaliating against whistleblowers. 

The scrutiny comes amid broader federal action, including Vice President JD Vance announcing a temporary pause on more than $250 million in Medicaid funding to Minnesota over concerns about fraud and oversight. 

What they're saying:

In prepared remarks released ahead of the hearing, Walz acknowledged the seriousness of the issue while defending his administration’s record.

"There is undoubtedly more to do," Walz said in an excerpt of his planned opening statement. "We will continue to do the important work of combatting fraud. But as we do so, we will remain true to our principles. We will feed hungry children, help the poor afford healthcare, and assist people with disabilities, while also keeping fraud in check."

Walz has also accused the Trump administration of targeting Minnesota for political retribution. He is expected to outline steps his administration has taken to rein in fraud and strengthen oversight safeguards, while reaffirming the state’s commitment to maintaining access to critical services.

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