As Tim Walz joins Democratic presidential candidate Kamala Harris on the campaign trail as her newly chosen running mate, critics are blasting the Minnesota governor for what they say is his failure to prevent a massive COVID-19 fraud that has ensnared the state government.
According to federal charges filed over the past two years, at least 70 people were part of a vast criminal conspiracy that exploited two federally funded nutrition programs to fraudulently obtain more than $250 million in one of the largest COVID-19-era fraud schemes in the country.
The defendants allegedly used a Minnesota-based nonprofit called Feeding Our Future to avoid scrutiny from the Minnesota Department of Education, which was supposed to oversee the programs.
On Tuesday, shortly after Walz was announced as Harris’ running mate, the Minneapolis Star-Tribune newspaper published a story calling the case one of Walz’s “key vulnerabilities.” By then, the pro-Trump group MAGA Inc. had already sent an email calling Walz an “incompetent liberal” for, among other things, “allowing[ing] “One of the biggest frauds to take place under his leadership.”
“Governor Walz and the people he directly hired and supervised lost half a billion dollars to fraud in just a few years as governor,” Joe Teirab, a pro-Trump Republican and former federal prosecutor running for Congress in suburban Minneapolis, wrote on X-rated Monday night, just hours before Harris picked Walz. “Imagine fraud on this scale on a national scale.”
So far, more than 20 people have pleaded guilty or been convicted for their roles in the fraud. None have been sentenced yet. Two of those charged have been found not guilty, and most are still awaiting trial.
“The defendants falsified documents, they lied, and they fraudulently claimed to have donated millions of meals to Minnesota children during the COVID pandemic,” Assistant U.S. Attorney Joseph Thompson said at a news conference in June, after the first trial in the case ended. “This conduct was not only criminal. It was depraved and brazen.”
In this Nov. 18, 2020, file photo, Gov. Tim Walz addresses Minnesotans from the Governors’ Reception Room at the state Capitol, to discuss the latest steps in his COVID-19 response.
Glen Stubbe/Minneapolis Star Tribune via Getty Images, ARCHIVES
But it may have been preventable, according to a state audit released in June.
“[T]“The failures we highlight in this report are symptoms of a department that was ill-prepared to respond to the problems encountered with Feeding Our Future,” said the 103-page report, detailing the findings of a limited “special examination” conducted by the Minnesota Legislative Auditor’s Office.
The state agency not only “failed to respond to warning signs known to the department before the onset of the COVID-19 pandemic and before the alleged fraud began,” but its “actions and inactions created opportunities for fraud,” the auditor said.
The report said that while Minnesota Department of Education (MDE) officials sometimes raised concerns about the nonprofit, they felt limited in their ability to follow through on those concerns due to “operational challenges” during the pandemic, including limited ability to visit sites in person, and due to a “litigation and public relations campaign” by Feeding Our Future that included allegations of discrimination.
“While we recognize that these factors created challenges for the department, we also believe that MDE could have taken more decisive action earlier in its relationship with Feeding Our Future,” the audit report said.
After laundering tens of millions of dollars, the fraudsters allegedly used shell companies to buy luxury cars, boats and jewelry, to travel and pay off debts, and to purchase properties in Minnesota and around the world, the report said.
After the report was released, Walz said his administration could always “do better” and added, “We certainly take responsibility” for any failures that occurred.
The report, which makes virtually no mention of the governor, finds no specific fault against Walz or his office. But Teirab and other critics say Walz deserves at least some responsibility for the massive fraud.
“He’s in control of what happens in his administration,” said Jim Schultz, a Minnesota business advocate and a vocal Republican who two years ago narrowly lost a race to become the state’s next attorney general.
“There was massive fraud under his watch,” Schultz told ABC News Tuesday. “To this day, he has never fired anyone, no one has been reprimanded.”
Walz said there have been leadership changes in state government, including at MDE, since the fraud occurred.
Teirab, who says he “helped investigate and prosecute the Feed Our Future fraudsters” when he was a prosecutor in the Minnesota U.S. Attorney’s Office several years ago, wrote on X last week: “Tim Walz was asleep at the wheel, enabling a quarter BILLION fraud.”
Weeks after five of the defendants were convicted of federal fraud in June, the Justice Department indicted five individuals for allegedly trying to bribe a jury member in the middle of deliberations, saying they offered the juror $120,000 in exchange for a not guilty verdict.
One of the accused who allegedly participated in the bribery operation was acquitted at trial.
The Feeding Our Future affair is not the only fraud that has impacted the Walz administration.
In June, another audit found that a second state agency failed to properly oversee a program that paid frontline workers affected by the COVID-19 pandemic. Auditors reportedly estimated that more than $200 million may have gone to people who committed fraud or were ineligible to receive payments under the program.
“This is not about wrongdoing,” Walz said in response to the two audits in June, according to KSTP-TV, the ABC News affiliate in Minneapolis-St. Paul. “In both of these cases, no state employee was involved in any illegal action. They just didn’t do the due diligence that they should have done.”
According to Teirab’s campaign, a number of Medicaid-related programs also suffered from fraud and waste under Walz.
A spokesperson for the Harris-Walz campaign did not respond to a request for comment from ABC News.
