The March 4 House Oversight and Government Reform Committee hearing laid bare a simple truth: When states ditch independent financial oversight, taxpayers get robbed blind. Fraud is the invisible tax worsening the affordability crisis, hitting our groceries, mortgages, and our children’s future.
Gov. Tim Walz (D-MN) and Attorney General Keith Ellison perhaps started to realize this during their Oversight Committee testimony when they finally admitted their state’s social services programs — flush with federal dollars — have been a playground for fraudsters. Billions looted from programs meant for children, people with disabilities, and struggling families. That stolen money fuels the inflation, squeezing family budgets nationwide.
Walz and Ellison’s testimony was a master class in deflection, but the facts cut through the fog.
‘THIRD-PARTY’ AUDITOR INVESTIGATING MINNESOTA FRAUD RECEIVED MILLIONS IN STATE MEDICAID FUNDS
Federal prosecutors peg the damage at up to $9 billion across Minnesota’s high-risk programs since 2018. Scams like Feeding Our Future alone siphoned off $250 million in fake child nutrition claims. Phantom meals turned into mansions, Mercedes, and maybe even wires to terrorists such as Al Shabaab. Then there’s the day care rackets and autism therapy ghosts billing millions for services never rendered. Housing stabilization funds? Over $100 million vanished into thin air for “helping” the homeless who never saw a dime.
These spending issues didn’t come out of nowhere. Whistleblowers waved red flags for years, and Minnesota Department of Human Services employees begged for action. Instead, the governor’s crew kept the checks flowing, ignored the alarms, and hid behind lawyers. Oversight Committee member Rep. Jim Jordan (R-OH) hammered Walz on restarting payments to Feeding Our Future fraudsters, even after a court clarified no such order existed. “Somebody’s lying,” Jordan pressed. “Either you’re lying, or the court’s lying. Which one?” Walz blamed attorneys. Pure politics.
This is outrageous, and Minnesotans deserve answers. An elected treasurer would’ve had every incentive to slam the brakes on improper payments. A true auditor, answerable to voters, would’ve sniffed out the rot early. Instead, Minnesota scrapped its elected treasurer back in 1998, scattering duties to bureaucrats who don’t face the ballot box. No wonder fraud exploded.
Thankfully, there are better models to follow. The State Financial Officers Foundation’s recently released inaugural Oversight Report shows 40 conservative treasurers, auditors, and comptrollers in 28 states protected $28 billion last year alone. That’s $5.7 billion uncovered in waste, fraud, and abuse, plus $22.3 billion in smart investments and unclaimed property returned to folks who earned it, helping stimulate the economy without printing a single new dollar, all by taking their jobs seriously.
Florida CFO Blaise Ingoglia flagged nearly $2 billion in bloated local spending. Kentucky Auditor Allison Ball exposed over $800 million in bogus Medicaid payouts and another $250 million in lapsed education funds. Utah Auditor Tina Cannon turned a whistleblower tip into county-wide cash-handling fixes. North Carolina Treasurer Brad Briner unearthed $170 million in idle funds, which he has pledged to use to pay down state debt. Iowa Treasurer Roby Smith posted a record $469 million investment return. State financial officers consistently rank as the most trusted elected officials on money matters, and the Oversight Report shows why. These results are no accident. They’re the fruit of elected watchdogs who treat taxpayer money like it’s their own, shielding families from inflation’s sting.
Minnesota voters bought the pitch that treasurers were just glorified clerks, saving a measly million bucks a year. Look at the bill now: billions in fraud that forces Washington to print and borrow more. Treasury Secretary Scott Bessent’s right: Up to 10% of the federal budget bleeds out to fraud yearly, with hundreds of billions fueling inflation and debt. The Government Accountability Office recently estimated nearly $3 trillion in improper payments over two decades. Every stolen dollar means higher grocery bills, steeper mortgage payments, and tighter family budgets.
FROM DAY CARE FRAUD TO SUITCASES FULL OF CASH: SOMALI FRAUD IS WORSE THAN YOU THINK
Thankfully, help is on the way. Vice President JD Vance is leading the War on Fraud, and Colin McDonald is the new fraud czar at the Justice Department, with SFOF pledging full backup.
Long term, the fixes are straightforward. Reinstate elected treasurers and empower auditors everywhere. These offices aren’t optional. Their work is not partisan, and taxpayers from every state benefit from them. As these watchdogs do their duty, watch the fraud and waste dry up and see affordability restored. Let’s keep our money where it belongs: in our pockets, not some fraudster’s Mercedes.
OJ Oleka is CEO of the State Financial Officers Foundation.