Update (July 14, 2026): This piece has been updated for accuracy and clarity. The managed-care audit gap it describes is unchanged and was never in question: it is a structural feature of managed care that applies equally to nonprofit and for-profit plans, and the state's discretionary "may require" recovery language (Minn. Stat. § 256B.6928) applies the same way to every MCO regardless of tax status. What we corrected is earlier framing that tied that gap to for-profit ownership specifically. We also clarified that Minnesota now contracts with eight managed-care plans — nine before UnitedHealthcare, the state's only for-profit Medicaid plan, exited effective January 1, 2025, after the DFL-controlled Legislature restored the nonprofit-only requirement in 2024 — and that the 2017 repeal was signed by DFL Gov. Mark Dayton. None of these changes alters the piece's findings.
A note before you begin and a word on the title: what was manufactured is the crisis, not the fraud. The fraud is real, and it is charged. What this piece documents, with receipts, not speculation, is how a genuine problem in one blue state was selectively targeted, fused with unrelated cases, and escalated into the predicate for what came next. That is convergence, not coordination. Where the record shows sequence and function but not a smoking gun, we say so.
This is a very large story, built from nearly a decade of laws, federal filings, sworn testimony, and money moving in ways that are easy to lose track of. We’ve done our best to let the narrative do the heavy lifting, but because some readers will want to trace the record for themselves, event by event, connection by connection, claim by claim, we’ve also built a companion interactive timeline, connection map, and claim-vs-record board, where every figure in this piece can be clicked, followed, and checked against its primary source. Every card links back to the section it references. Read the story here; explore the evidence there.
The Trump Administration called it the largest autism-fraud bust in American history and referred Minnesota Governor Tim Walz and Attorney General Keith Ellison to the Department of Justice for criminal investigation. But the federal crackdown hit one blue state while Republican-run states with far larger Medicaid fraud cases walked. Health insurer Centene paid more than $1 billion to settle overbilling across more than 20 states, and none faced a funding deferral, a criminal referral, or calls for state officials to resign.
Bigger cases. Opposite treatment.
Then the narrative expanded. A federal food-aid fraud case, Feeding Our Future, Minnesota’s Housing Stabilization Services program, and its autism benefit, three separate matters involving three different agencies, were folded into a single “Somali fraud” narrative, even though many of the defendants are U.S. citizens and the cases were already under investigation or prosecution.
That narrative became part of the justification for Operation Metro Surge, the largest immigration-enforcement operation in Department of Homeland Security history. Roughly 3,000 federal agents were deployed to the Twin Cities, nearly 4,000 people were arrested, and two U.S. citizens died.
Two numbers tell the story, and they point in opposite directions because they describe different populations. Among the fraud defendants, a large majority were Somali Americans, most of them U.S. citizens. Among the thousands arrested during Metro Surge, fewer than 3 percent were Somali. The narrative centered on a community that was heavily represented in the charging documents, yet the enforcement operation overwhelmingly affected other people.
The throughline runs from a $259 million Medicaid funding deferral and an audit system that reviews only about one-quarter of the program to a $911 billion national Medicaid reduction, with fraud serving as the stated justification.
The squeeze
For nearly three months, Minnesota did everything the Trump administration asked. When the federal Medicaid agency sent a letter on December 5 demanding a plan to tighten the state’s fraud controls, Minnesota sent one back before New Year’s Eve.
There was a warning shot almost immediately. On January 6, Minnesota met with the Centers for Medicare and Medicaid Services (CMS) to discuss that plan. Hours later, the same day, CMS Administrator Dr. Mehmet Oz announced the agency might withhold as much as $515 million a quarter. No one had raised it in the room. John Connolly, the state’s Medicaid director, found out with everyone else.
The process became a moving target. Minnesota submitted a revised plan, and Connolly and his staff took the meetings: February 3, then the 10th, the 17th, and the 24th. Four in a single month, working, he would later testify, “days, nights, weekends, holidays.” Each time they cleared a requirement, another appeared.
“The goalposts keep moving,” he said.
On February 25, he learned how the rest of it had gone. Not in a meeting, but in a press release.
The federal government was deferring $259,505,491 from a program that keeps more than 1.1 million Minnesotans in doctors’ offices, group homes, and their own apartments. It was the first of two quarterly deferrals; on April 29, CMS took a second, for roughly $91 million, bringing the total to about $350 million.
In four February meetings, no one had told him it was coming. “I personally was not aware of that coming,” Connolly told a congressional subcommittee months later, under oath.
Minnesota sued to block the deferral. It was more than fifteen times larger than any the state had faced before, and outside analysts described it as historically unprecedented in its size and timing. A federal court declined to halt it in April, and the litigation is now paused while the state and CMS try to resolve the dispute.
The squeeze, by date: Minnesota met every deadline through the winter of 2025–26. On Feb. 11, CMS selected Oracle Cloud Infrastructure; 14 days later, it deferred $259.5 million.
Seema Verma ran the Centers for Medicare and Medicaid Services from 2017 to 2021. While she led it, the agency approved Minnesota’s Housing Stabilization Services program in 2019. That was an agency action, not a personal approval or signature by Verma.
What happened next is a matter of public record. The intent behind it is not, and the current CMS, not Verma, made the decision that matters here. Verma left the government, joined Oracle, and by January 2024 was running Oracle Health. Then, on February 11, 2026, CMS selected Oracle for major federal cloud work. That award ran through a different Oracle division than the one Verma runs, and she is not named in it. Fourteen days later, on February 25, CMS deferred $259.5 million from Minnesota. We found no evidence that Verma influenced either the Oracle selection or the Minnesota deferral, and no source suggests she did. No coordination is alleged.
A more recent development also appears in the record. Oracle Health, through Alex Mugge, a former CMS official who left to work under her former boss, Verma, urged federal regulators in early 2026 to have CMS deploy artificial intelligence for pre-payment fraud detection as a way to move beyond the “pay and chase” model Minnesota had been criticized for relying on. On June 24, Indiana, CMS, and Oracle launched a 90-day pilot to flag suspicious Medicaid billing before claims are paid, the kind of tool the recommendation had described. Coverage names only “Oracle,” not Oracle Health, and Verma is not named in either the recommendation or the pilot.
The full chronology, every date and filing, is cataloged in this article’s companion timeline and the connection board.
Now, set Oracle’s org chart aside for a moment and look at what Minnesota was doing while all of this played out. The chronology is worth noting.
By the time the crackdown began, Minnesota had already been doing the thing it was being punished for failing to do.
Its human-services department had started making surprise visits to autism-therapy providers in October 2024, before any federal fraud task force existed and before the politics arrived. By the department’s own count, it had run more than 3,000 investigations and identified more than $50 million for recovery since 2020, and in 2025 it sharply stepped up payment stops, imposing more than twice as many as in recent years.
In July 2025, for the first time in the program’s history, the state passed bipartisan legislation giving it the power to license autism-therapy agencies and inspect them without warning, tools the program had gone nearly a decade without. In September, the governor issued an executive order tightening the state’s anti-fraud work.
And it was not only preventing fraud. It was prosecuting it.
Attorney General Keith Ellison’s Medicaid Fraud Control Unit has won more than 340 convictions and more than $90 million in restitution and recoveries since he took office. Last year it ranked fifth in the nation in fraud charges, results it posted with one of the smallest such units in the country relative to a Medicaid budget approaching $20 billion. A federal audit found that from 2020 to 2022, Minnesota secured the most provider-fraud convictions among similarly sized states.
And that fall, before a single federal letter arrived, Minnesota did something almost no state does to its own program: it shut one of the two down. Housing Stabilization Services, one of the two programs the federal case is built on, was terminated at the state’s own initiative. “The painful step,” Connolly called it.
The state was clearly not backing away from that fight. It was widening it.
On May 17, 2026, months after the deferral landed, the Minnesota House passed the bipartisan Medical Assistance Protection Act by a vote of 118 to 16, expanding that same fraud unit from 32 to 50 staff, adding Medicaid fraud to the state’s racketeering statute, creating tougher penalties for the largest schemes, and raising the maximum sentence from two and a half years to ten.
A state being punished for tolerating fraud was, at that very moment, arming itself to prosecute more of it.
None of that appeared in the report that would soon land on Vice President J.D. Vance’s desk. The story that report told was that Minnesota had done nothing. The record says Minnesota had been moving for more than a year, investigating, licensing, prosecuting, shutting down its own program, and expanding the law, and got a quarter-billion-dollar penalty anyway.
This is the story that never broke through.
Instead, the version Americans did hear arrived with a 205-page congressional report, a Vice-Presidential referral of Governor Tim Walz and Attorney General Keith Ellison for criminal investigation, and four members of Congress demanding the two men resign.
Its narrative was simple: a Democratic administration let fraud run wild.
Here it is important to be intellectually honest. There is real fraud in Minnesota, and the state was too slow to stop it. The Legislative Auditor said as much, and Democrats own it. But set the crackdown against the record it claims to rest on, and something else comes into focus.
The federal government did not so much investigate Minnesota as squeeze it.
Even then, the charges everyone celebrated reached only a fraction of the money. And the same enforcement machine that bore down on Minnesota, a Democratic-run state, left multiple Republican-run states, several with larger documented problems, entirely alone.
Minnesota is not even an outlier on the numbers.
CMS’s January 2026 PERM review put Minnesota’s Medicaid improper-payment rate at 2.1 percent, compared with a national average of 6.1 percent, and that estimate predates the state’s most recent fraud-prevention measures. One important caveat cuts the other way: the managed-care portion of the review was based on just 69 sampled claims, far too few to meaningfully assess the managed-care spending this piece argues has received insufficient scrutiny.
The timing is difficult to ignore.
“Waste, fraud, and abuse” is one of the oldest justifications in American budgeting. You do not cut a benefit for people with disabilities by saying so; you first establish that the program is corrupt. Watch the same calendar, and three developments come into view, all within the same period and under the same federal administration: the fraud campaign against Minnesota, a roughly $911 billion reduction in federal Medicaid spending signed into law in July 2025, and a June 2026 Justice Department opinion narrowing the disability-rights protections recognized in Olmstead that, for more than a quarter-century, have pushed states to serve people with disabilities in their own homes rather than in institutions.
That opinion is an Office of Legal Counsel interpretation, an internal executive-branch reading of the law, not a court ruling, and it does not, by itself, overturn Olmstead as binding precedent.
The legal pressure did not begin with that memo. During the first Trump administration, the Justice Department filed opposition briefs in the earlier Texas litigation, and new Olmstead enforcement actions slowed. That fight remains active. In Texas v. Kennedy (formerly Texas v. Becerra), six states, Texas, Florida, Alaska, Louisiana, Missouri, and Montana, are challenging the federal government’s interpretation and enforcement of the Olmstead integration mandate. Summary judgment briefing is scheduled to continue through August 2026, and no ruling has been issued.
Read separately, each is a news story. Read together, they move in one direction, in one window, under one administration.
Three efforts, one direction: convergence, not coordination.
Minnesota is where this started. But as the rest of this piece lays out, it is not anywhere close to where it ends.
The blind spot
In May, the Justice Department announced what it called the largest autism-program fraud case it had ever charged: fifteen defendants, more than $90 million in alleged fraud, roughly $46.6 million of it tied to the benefit that pays for intensive therapy for children with autism (of which about $21.2 million was actually paid out). It was, the government said, the biggest bust of its kind in history. Republicans who had spent two years demanding the investigation took a victory lap.
Here is the part the headline left out.
Medicaid money moves two ways. In the first, call it the front door, a provider bills the state directly. The state sees every claim and can investigate anything that looks wrong. In the second, call it the side door, the state pays a private insurance company a flat monthly fee for each enrollee, and that company pays the providers and polices its own network. The state never sees those claims. Watching those providers is the insurer’s job, not the state’s.
Which door you walk through is not a choice. In the Twin Cities and most of Minnesota, managed care is mandatory, and the state assigns new enrollees to one of nine private insurers. The front door, fee-for-service, is mostly what is left over. By the Legislative Auditor’s own count, it is about a quarter of the autism program. The other three-quarters runs through the insurers, out of the state’s direct view.
Now set the “largest bust in history” against that split. At $46.6 million, the charged scheme is a slice of a benefit that runs into the hundreds of millions of dollars a year, and the state can directly examine only about a quarter of the program. The other three-quarters runs through the private managed-care plans that police their own networks, and it has not been audited at all.
The bust landed where the state can see. Most of the money moves where it cannot.
The limitation goes deeper. It is written into the contract the state signs with each insurer. Minnesota can claw money back from an insurer only when the insurer spends too little on actual care, below a floor of 85 cents on every dollar. That floor is not Minnesota’s doing. It is the federal minimum medical-loss ratio set by CMS’s own 2016 managed-care rule, and the state could not legally have set it any lower.
Before 2016, Medicaid had no such floor. CMS added one to prevent insurers from pocketing premiums instead of spending them on patient care, not to detect fraud.
The formula, however, cannot tell the difference. A fraudulent claim that an insurer pays still counts as money spent on patient care, pushing the insurer toward the 85 percent floor and away from owing the state anything, not because the insurer changed its behavior, but because the accounting treats legitimate and fraudulent claims the same.
The state’s recovery tool on the managed-care side, enacted in Senate File 2, the same 2017 law, is not a mandatory clawback. It is discretionary: the state “may require” a payment, but only if an insurer’s medical loss ratio falls below 85 percent. Fraud, by inflating that ratio, tends to keep it from ever falling that low.
That discretionary language was not required by federal law. It was written by the Republican-controlled Minnesota Legislature that then held both chambers, in the same bill, the same chapter, under the same three authors, that created Housing Stabilization Services.
Most of this activity never reaches the state’s desk. Providers bill the insurer, not the state. The insurer’s own reported data is used to set its rates without an independent audit, and the state’s fraud audit examined only fee-for-service claims.
In other words, the contract does not punish an insurer for paying fraud. It punishes them for paying too little.
For years this was easy to wave away as a technicality. Then, on June 25, it was said out loud, under oath. Four times.
That morning, the Medicaid directors of four states, Minnesota, California, New York, and Ohio, sat in a Washington hearing room. A Republican congressman, working through a bill of his own, walked each of them through the same question: does your fraud audit reach the managed-care side, or only fee-for-service? One after another, the four directors gave the same answer. Their audits reach fee-for-service claims only, never managed care. Three of them serve Democratic governors. The fourth, Ohio’s Scott Partika, serves a Republican, Gov. Mike DeWine.
The blind spot was identical in all four. It had nothing to do with which party ran the state, and that is the tell.
The flaw is universal, baked into the way every state administers Medicaid. Coming down on one state for it while sparing the others, then, cannot be explained by the flaw alone.
What differed was the response.
A Democratic congresswoman, Diana DeGette of Colorado, said aloud what the hearing kept circling. The federal government, she charged, “is going out of its way to blindside blue states while pampering red ones.”
Two months earlier, that same federal government had offered a small demonstration of how its numbers were being made. In a March letter to New York Governor Kathy Hochul, CMS claimed that nearly three out of every four of the state’s 6.8 million Medicaid enrollees were receiving personal care services, a figure that, if true, would have been staggering. The real number was about 450,000, or roughly 7 percent. CMS was off by a factor of eleven. It later acknowledged the error, but its threat against New York’s federal Medicaid funding remained.
If that was rigor, it missed by a factor of eleven. And DeGette, it turned out, could prove the rest of what she had said.
The states that got a pass
Centene is the largest Medicaid insurer in the country. Over the last several years it has paid more than a billion dollars to settle allegations that it overbilled state Medicaid programs, bigger dollars by far than anything charged in Minnesota. The settlements span more than twenty states, with more still open.
Four of those states are run by Republicans. In each one, the federal response was a quiet settlement, a renewed contract, or nothing at all.
In Ohio, Attorney General Dave Yost sued Centene for Medicaid overbilling, and the state Medicaid department suspended the contract it was then negotiating with the company’s subsidiary, Buckeye Health Plan. Roughly three months later, Centene paid $88.3 million to settle the allegations. That August, the department restarted the Buckeye contract anyway. During those critical months, Centene’s lobbyists included Michael Kiggin, a law-school classmate of Gov. Mike DeWine (R) whom DeWine had appointed to the Ohio State University Board of Trustees. The state Medicaid department later said it found no emails between Kiggin and its staff, and no evidence ties the friendship to the contract award.
In Texas, Centene paid $165.6 million, the largest state Centene settlement at the time (later surpassed by California’s $215 million in 2024), even as the attorney general, Ken Paxton, watched his Civil Medicaid Fraud Division shrink from 31 attorneys to 19 after its chief was forced out, and faced a whistleblower complaint to the FBI from his own senior aides.
In Georgia, the state never settled at all, one of the last holdouts in the country, even as Governor Brian Kemp (R) and Attorney General Chris Carr collected Centene-linked donations, more than $100,000 to Kemp and more than $70,000 to Carr. (No evidence links the donations to the decision not to settle.)
Florida is the sharpest case. The $67 million settlement was real, but $10 million of it was routed through the Hope Florida Foundation to two nonprofits and on to Keep Florida Clean, a political committee opposing the 2024 marijuana ballot measure that was chaired by James Uthmeier while he was Governor DeSantis’s (R) chief of staff, before his appointment as attorney general. Between October and December 2024, that committee sent $10.5 million to the Republican Party of Florida and $1.1 million to the governor’s political committee, though the committees were commingled and no source traces a specific settlement dollar to either recipient. State Attorney Jack Campbell opened a criminal investigation in May 2025, a grand jury questioned current and former DeSantis officials in October 2025, and a presentment was returned on February 25, 2026. A documented diversion of Medicaid settlement money into partisan spending, in a Republican-run state, still drew no federal deferral, no referral, and no demand that anyone resign. (A presentment is a report, not an indictment; it remains sealed pending a legal challenge, no one named has been charged, and the DeSantis administration disputes any wrongdoing.)
Set Minnesota’s ledger beside theirs. Minnesota drew a payment deferral, a withholding threat, a Vice-Presidential criminal referral, and a demand that its officials resign. Ohio, Georgia, Florida, and Texas drew none of them.
Not one of those measures was directed at any of those Republican-run states.
Now widen the lens one more click, past Centene and past the different kinds of fraud, to the fraud at the center of the Minnesota case itself: autism therapy. Here the pattern becomes harder to dismiss as coincidence, because it emerges from the government’s own work.
Since late 2024, the inspector general of the Department of Health and Human Services has audited the Medicaid autism programs of Wisconsin, Maine, and Colorado, and a related home- and community-based waiver program in Indiana. In every single one, 100 percent of the sampled months contained improper or potentially improper payments.
The auditors used nearly identical language in each report: the state did not give providers enough guidance, and the documentation did not support the billing. The combined federal refund demands run past $106 million. Three of those four governors (Wisconsin’s, Maine’s, and Colorado’s) are Democrats; Indiana’s is a Republican.
The failure mode is the same in all four, and it does not care which party is in charge.
This is the cleanest comparison in the entire case. Not a different company. Not a different scheme. The same program, the Medicaid autism benefit, audited the same way and failing the same way in Wisconsin, Maine, and Colorado, with the same 100 percent improper-payment rate appearing in a closely related home- and community-based waiver in Republican-run Indiana. Identical findings. No deferral. No criminal referral. No demands for anyone to resign. The only variable that changed was the federal response.
Same fraud. Opposite treatment.
Minnesota is not on that audit list, not because it is clean and not because it is uniquely dirty, but because the neutral audit that reached Indiana, Wisconsin, Maine, and Colorado has not yet reached Minnesota. The pressure on Minnesota arrived through a different door entirely: the congressional report, the letter to the attorney general, the payment deferral, and the criminal referral. Not the audit.
And the deferral against Minnesota was not the only one. In California, CMS put $1.3 billion in jeopardy through a deferral aimed at in-home care, the services that keep disabled and elderly Californians out of nursing homes. It was based, the state’s director testified, almost entirely on how fast the program had grown, with no specific instances of fraud identified. New York got its inflated-by-eleven-times letter. Maine drew scrutiny too. List the states the federal Medicaid crackdown has actually leaned on: Minnesota, California, New York, Maine.
The pattern has nothing to do with where the fraud is worst. It has everything to do with who the governor is.
The report
Which brings us back to the document that started all of it: 205 pages, titled The Cost of Doing Nothing, released the same day the Vice President made his referral.
Read it against the record, including the committee’s own evidence, and it reads less like an investigation than a brief built to reach a verdict. Minority staff, by the committee’s own accounting, received only about 8 percent of the interview time. This is a one-party product.
Start with the number, because almost all the coverage got it wrong. The figure that anchors the report is not the $610 million that ran through nearly every news story. It is a far larger and far softer number: a rough $9 billion estimate by a federal prosecutor’s office, projected across fourteen of Minnesota’s high-risk Medicaid programs, a figure Governor Walz disputed under oath in his own testimony to the committee. To carry its story, the report also leans on material from a private conservative advocacy group and, at one point, a YouTube video.
As for the $610 million that ran through nearly every news story?
That number never came from a government audit either. It originated in a February 10, 2025 letter to Attorney General Pam Bondi from the Minnesota House Republican caucus, Speaker Lisa Demuth, Majority Leader Harry Niska, and Rep. Kristin Robbins, enclosing the caucus’s own “Minnesota Fraud and Waste Case Tracker,” a tally of 25 cases, roughly $523 million of it drawn from the already-charged Feeding Our Future child-nutrition prosecutions. Again, not a government audit.
The letter asked the Justice Department to investigate the Walz administration; it did not start the fraud cases themselves. Those began years earlier, under President Biden’s U.S. Attorney for Minnesota, Andrew Luger, with the first FBI search warrants in January 2022 and prosecutions underway by 2024, and they continued under the Trump administration.
An estimate is a projection. A tracker is a tally. Neither is a finding.
The Justice Department’s own numbers make the point better than any outside critic could. In announcing the $46.6 million autism-fraud case, federal officials noted that claims in the program had grown from roughly $600,000 in 2018 to more than $400 million by 2025, an almost 700-fold increase in seven years.
But a DHS document undercuts part of that inflation.
The department’s own Early Intensive Developmental and Behavioral Intervention (EIDBI) Licensing Recommendations report states that a 2018 change in billing codes, not an increase in the volume of care or a new pattern of fraud, “drove a jump in average cost of services.” DHS cited that same finding again in its February 23, 2026 presentation to the House Fraud Prevention and State Agency Oversight Policy Committee.
The change was not Minnesota’s doing. The American Medical Association’s CPT Editorial Panel replaced the program’s temporary billing codes with eight new permanent codes, effective nationwide on January 1, 2019. The change shifted billing from 30-minute to 15-minute units, and Minnesota adopted the national standard through State Plan Amendment TN 19-01, just as every other state did.
No DHS report, legislative audit, or advocacy tracker has ever quantified how much of the program’s growth is attributable to the coding change. The department’s own charts begin in 2020, charts begin in 2020, after the transition. The coding change is not the only non-fraud explanation, and it does not by itself cover the years since.
Reporting on the same spending growth, Minnesota Reformer documented several contributing factors: a deliberate, federally driven shift from institutional care to home- and community-based services; inflation and legislatively mandated rate increases, including a 15 percent increase in 2024; an aging population; and programs that were intentionally designed to expand. Sen. Jim Abeler told the paper that the growth in autism services “was desirable because the program was expanding the way it was designed to go.”
A spending curve driven by those forces is not, by itself, evidence of fraud—a point Minnesota Reformer’s own reporting underscored by quoting a health policy researcher who called the practice of equating spending growth with fraud “misguided.”
The codes themselves are not fraud. They are the standard national billing mechanism used by every provider. What prosecutors allege is billing for services never rendered and kickbacks paid to families. That is fraud, regardless of which billing code carried the claim.
But a coding change that DHS itself identified in writing as driving higher average costs became, in the fraud narrative built on top of those numbers, indistinguishable from the fraud it was meant to help explain.
The report names the fraud programs on nearly every page. It never names the laws behind the two programs, Senate File 2 and Senate File 562, or the three Republican legislators who wrote Senate File 2, or the fact that both laws were enacted before Walz took office.
It also criticizes Minnesota for relying on “pay and chase,” paying claims first and chasing the fraud afterward. Yet barely two weeks before it began deposing Minnesota officials, the same committee had heard federal witnesses from the Treasury, the Government Accountability Office (GAO), and the oversight community testify that pay-and-chase is the federal government’s own default, and that only 4 percent of federal programs had even completed access to the government’s primary fraud-prevention database.
The report sent to the Vice President mentions none of it.
Then there are the witnesses the committee deposed itself. Former Human Services Commissioner Tony Lourey was asked, under oath, whether Governor Walz had ever directed him to ignore fraud in any state program. “Absolutely not,” he answered. Asked the same about Attorney General Ellison, he said it again: “Absolutely not.” Asked whether he had any reason to believe either man had known about fraud and chosen to look away, he said no to both.
Former Commissioner Jodi Harpstead was put through the same questions and gave the same answers. Every official who was asked denied that fraud had been tolerated as a matter of policy. The report sent to the Vice President, as the basis for a criminal referral, contains none of those denials.
It does, however, contain a reversal. A Minnesota education official, Emily Honer, testified to the committee’s own counsel that federal agencies had failed as the backstop when the state’s tools ran out. “The USDA and the Office of Inspector General are supposed to be our final stop when we have used all of our tools,” she said, “and for that to fail not only allowed Feeding Our Future to continue, but accelerated it.”
The June report characterized that testimony as Honer “blaming USDA.” Her words appear in the transcript at page 43. The report cites page 40, and reproduces only that page in its appendix. The federal-failure testimony is neither quoted nor included.
And the depositions themselves were run by the committee’s chief investigative counsel, Jack Emmer, who happens to be the son of Representative Tom Emmer (R-Minn.), the House Majority Whip who publicly amplified the case. Jack is also the husband of Kelsey Emmer, the communications director for Representative Pete Stauber (R-Minn.), who signed the resignation demand.
Three members of one family sat at three points in a single investigation. No disclosure of these relationships appears in the report or its public record.
What Rep. Robbins says
Rep. Kristin Robbins, who chairs the Minnesota House Fraud Prevention and State Agency Oversight Committee and co-signed the letter to Attorney General Bondi, responded to our request for comment. She disputes the idea that the federal response flowed from that letter.
The criminal investigations, she notes, began under a Democratic U.S. Attorney and continued under Trump. She says she wrote to CMS in July 2025 requesting a full audit of Minnesota’s Medicaid programs, that CMS’s focused review began that summer, and that several of the state’s own anti-fraud actions came only after that review was underway. She adds that she flagged concerns early, sending the Department of Human Services a list of 72 childcare providers with high reimbursements and repeated violations before a February 2025 hearing, and saw no sign the department acted on it. On Nick Shirley, she says she never met him before he filmed a committee hearing in the fall of 2025, and never gave him any list of day cares.
The record bears out parts of this. The prosecutions did predate the letter and were bipartisan in origin, which is why this piece treats them as the ordinary system working, distinct from the political crackdown that followed. And a legislator’s request for an audit is not the same thing as targeting a state. Where her account and this piece part ways is not on whether Minnesota had fraud, or whether the state was too slow, both are true, but on what the federal government did next. A quarter-billion-dollar deferral, a criminal referral of the governor and attorney general, and demands that they resign are responses that the states with the same audit findings, and the states with larger Centene settlements, never drew.
The louder story
Most people have not read the 205-page report, and likely never will, let alone know what’s in it. What they have seen are the videos, the posts, the photos of near-empty day cares and misspelled business signs, and those were already everywhere before the report itself was even released.
In December 2025, a YouTuber named Nick Shirley posted a video of himself confronting workers at Somali-run day cares, claiming he’d uncovered a fraud empire. It drew millions of views. But when Minnesota’s own child-services inspectors visited the centers he filmed, they did not find the fraud empire he described.
At a December 29 press conference, House Speaker Lisa Demuth said the caucus had “been working to expose fraud for years, including working with Nick Shirley and agency whistleblowers.” Majority Leader Harry Niska said some of the information in Shirley’s video “came from House Republican staff.” The caucus has since narrowed that account.
Through its public affairs office, it told us legislators did not work with Shirley directly, and that a staffer instead gave a man featured in the video, identified as David, and other news outlets, publicly available information from state Department of Human Services databases. And Tom Emmer, the same congressman whose son ran the depositions, carried it further, telling a Faith and Freedom Coalition town hall on Capitol Hill that immigrants who don’t assimilate should “go the hell back to where they came from.”
He had earlier called to deport Somali Americans tied to fraud and to strip naturalized citizens of their citizenship. Representative Ilhan Omar (D-Minn) answered: “I assimilated all the way to Congress, and this idiot still tells me to go back where I came from.”
Underneath the rhetoric isn’t just inflammatory. It is structurally deceptive.
Feeding Our Future, the case that hangs over all of this, was federal child-nutrition money run through the Agriculture Department. The housing and autism cases are Medicaid.
Different programs, different dollars, different agencies.
But collapse them together, foreground the Somali-American defendants and leave everyone else out of the frame, and three unrelated cases become a single story: “Somali fraud.”
That was branding, not a finding.
It should also be noted that fraud in Minnesota is committed across every community, and the smaller cases with defendants of other backgrounds simply never became a headline.
To be clear, none of it was waiting to be found. Feeding Our Future had already been charged in 2022 and prosecuted in Minnesota’s federal court: seventy-nine people indicted, more than sixty convicted, most by guilty plea.
The ringleader, Aimee Bock, was found guilty on every count in March 2025 and later sentenced to more than forty years in prison and ordered to pay more than $240 million in restitution. Bock is a white woman, a detail worth noting given how thoroughly the case was folded into a narrative of “Somali fraud.” The ordinary system had already done its work.
What came next wasn’t about catching the fraud. It was about the story.
And the story became a mandate.
The White House announced a multiagency effort to investigate the Minnesota fraud. In December 2025, the federal government launched Operation Metro Surge, which DHS described as the largest immigration-enforcement operation in its history, deploying roughly 3,000 agents to the Twin Cities.
The stated purpose was fraud. In practice it functioned as a mass immigration sweep, and by March, nearly four thousand people had been arrested, the vast majority Latin American immigrants, about half from Ecuador or Mexico.
Yet fewer than 3 percent of those arrested were Somali, and none were tied to the fraud cases the operation invoked. Human Rights Watch titled its report A Manufactured Crisis. Two people killed by federal agents during the operation, Renée Nicole Good and Alex Pretti, were U.S. citizens.
What DHS says
We put these findings to the Department of Homeland Security. A spokesperson responded at length, defending both Operation Metro Surge and the officers’ actions in the deaths of the two U.S. citizens. DHS did not dispute that the operation took place or that both deaths occurred.
DHS said its officers “surged law enforcement” and made more than 11,000 arrests of “murderers, rapists, pedophiles, and gang members” while investigating “at least $19 billion” in taxpayer and immigration fraud, which it called “just the tip of the iceberg.” It said what makes someone a target for immigration enforcement “is if they are illegally in the U.S.,” called allegations of racial profiling “disgusting, reckless, and categorically FALSE,” and cited 8 U.S.C. § 1357, the Fourth Amendment, and Supreme Court rulings that it says have vindicated its practices. It attributed any use of force to “violent agitators,” pointing to what it described as a 1,300 percent increase in assaults on officers, a 3,300 percent increase in vehicular attacks, and an 8,000 percent increase in death threats.
On Renée Nicole Good, DHS gave a detailed account. It said that on the morning of January 7, she and her partner had been “stalking, harassing and impeding” law enforcement; that at 10:25 a.m. she used her vehicle to block officers, a felony; that she refused repeated lawful commands to leave the vehicle for arrest; and that she then “weaponize[d] her vehicle” and struck a federal officer, who, “fearing for his life,” fired “defensive shots.” DHS concluded that the use of force was justified and said the matter “remains under investigation.”
On Alex Pretti, DHS likewise defended the officers’ actions, said the matter “remains under active investigation,” and referred further questions to the FBI.
Readers can weigh those competing accounts against the record, with two points in mind. DHS’s claim that “70 percent of illegal aliens ICE arrested” have criminal convictions or pending charges is a nationwide figure, not one specific to Operation Metro Surge, where Human Rights Watch found that more than three-quarters of those arrested had no criminal convictions. Likewise, DHS’s figures of 11,000 arrests and $19 billion relate to nationwide enforcement activity, not the Twin Cities operation described here.
The investigations into the deaths of Renée Nicole Good and Alex Pretti remain open. What is not in dispute is that Operation Metro Surge took place and that two U.S. citizens died during it.
A number can be corrected; CMS corrected one this spring. A story is harder to call back. Whether every actor intended the blur or not, the record shows the same word, fraud, moving a quarter-billion dollars in one direction and three thousand federal agents in another, toward the people least connected to the money.
Erasing the reason
If the report was the case for the prosecution, what came ten days later was stranger: a move to weaken the federal legal mandate behind the care those programs provide.
On June 18, the Justice Department issued a legal opinion concluding that the federal requirement to serve disabled people in their own homes and communities, rather than in institutions, may never have been required by law at all. It is a reading that, across twenty-seven years and administrations of both parties, no one had adopted.
The opinion was signed by Lanora Pettit, who had come to the Justice Department from the Texas Attorney General’s office, the office of Ken Paxton. That office’s own $165.6 million Centene settlement drew none of the scrutiny Minnesota did, though Pettit served in the solicitor general’s division, separate from the one that handled it, and nothing ties her to that case.
What it removes is the federal pressure that has long pushed states to fund this kind of care in the first place. And it did not arrive alone. A year earlier, the sprawling budget law known as H.R.1, signed on July 4, 2025, had cut federal Medicaid by roughly $911 billion over a decade.
That cut is worth placing carefully.
It is a national law, not a Minnesota measure. It reduced Medicaid in every state, it passed for the usual budget reasons, and it was already a year old before the crackdown on Minnesota reached full force. It was not built on the Minnesota fraud story, and this piece does not claim it was. But its effect is structural: because home- and community-based care is an optional Medicaid benefit while nursing-home care is mandatory, home care is first in line everywhere when the money shrinks.
That is what makes the timing matter more than any question of intent.
One move strips the funding, nationally and in advance. Another strips the legal reason to spend what is left. A third, the fraud campaign, supplies the justification for going after the programs in one state. Then, within a week and a half this June, the same federal government moved to prosecute Minnesota over these programs and to weaken the mandate behind the very kind of care they provide, on top of a Medicaid cut already on the books.
Read the three together and they close on one target:
The fraud campaign is the justification: it establishes that these programs are corrupt.
The $911 billion cut is the fiscal backdrop: a national squeeze that shrinks the money in every state at once.
The Olmstead opinion is the legal lever: it loosens the federal obligation on states to fund home-based care.
The funding cut and the legal rollback form a pincer. When the dollars shrink, states protect the mandatory nursing-home care and cut the optional home care first, and now they can argue they were never required to fund that home care at all.
And there is one more turn of the screw. The officials being pushed to resign are the same officials positioned to fight the rollback in court.
An attorney general like Keith Ellison is exactly the kind of official who challenges a federal funding deferral and a new federal interpretation in court, and Minnesota did sue. A fraud referral against the state’s chief legal officer could undermine his credibility and, with it, the state’s position. We present that final connection as an inference, not a finding. The record shows the sequence and the potential effect, but no evidence establishes that weakening Minnesota’s legal position was anyone’s intent.
A necessary caution, because the claim is serious: what the record shows is convergence, not coordination. The $911 billion Medicaid reduction is the clearest reason to use that word. It is national. It predates the Minnesota campaign. It has its own authors and its own politics. No one had to coordinate anything.
A national Medicaid reduction, a fraud campaign focused on one blue state, and a rollback of the integration mandate, each with its own timeline and its own sponsors, all move in the same direction, within the same window, under the same administration. No primary source shows that any official pursued the fraud campaign in order to clear the way for the cuts, and this article does not claim otherwise.
The June 18 opinion does not shut Minnesota’s programs down; they continue to rest on independent state authority. The connection is the sequence, the function, and the beneficiaries. Those are the questions the chronology raises. The reader is left to decide what they mean.
The people who depend on that care were not consulted.
It’s in the platform
There is a temptation, reading all this, to dismiss the pattern as coincidence, a federal talking point that happened to land on one state. But the frame is not ad hoc.
It is written down, adopted as official doctrine, by the Republican Party of Minnesota itself.
In its 2026 platform, the state party’s Legislative Action Agenda calls for “full, thorough and transparent investigations into all alleged fraud, misuse of funds and financial misconduct within state-administered social services programs including childcare assistance, nutrition, housing and behavioral health programs.”
Read that list again.
Housing is Housing Stabilization Services. Behavioral health is where the autism benefit lives. The party has named, as a plank, the exact category of programs the federal campaign was built on. The predicate, in the party’s own words.
And it does not stop at the predicate.
The same platform calls to “establish sunset provisions on entitlement state programs,” the state-level version of the fiscal arm, a mechanism that puts optional benefits first in line for elimination. It also calls to “place all federal and state health care programs, including Medicare and Medicaid, under states’ control while continuing to receive federal funding.” That is the block-grant mechanism that gives states greater discretion over which benefits survive when funding tightens, and home- and community-based services are among the most exposed. Finally, it calls to repeal “all state and federal programs that ration health care, including the Patient Protection and Affordable Care Act.”
Taken together, these are not scattered grievances. They are the fiscal arm and the legal arm, restated as state doctrine. And the platform moves on the officials, too. Three separate planks strip authority from the very executive who would fight a rollback in court:
One would “limit the authority of the Governor to make judicial appointments.”
Another holds that a governor’s emergency powers “require authorization from both chambers of the legislature” to extend.
A third would fill a U.S. Senate vacancy by statewide special election “rather than allowing the governor the authority to appoint.”
The platform also supports codes of conduct “requiring resignation and loss of pension and benefits upon conviction of a felony.” That rhymes with the resignation demands against Walz and Ellison, with one honest distinction the party’s own language makes plain: the platform conditions resignation on a conviction.
The demands on Walz and Ellison came before any charge, let alone a conviction.
Honesty requires one counter-signal because it points in the opposite direction. The same Legislative Action Agenda calls for repealing the “$250 million budget cut to special education cross-subsidy reduction aid” scheduled for 2028 and 2029. In other words, it seeks to preserve special education funding.
Two distinctions keep that proposal from altering the broader pattern. First, it concerns K–12 special education aid, not Medicaid-funded home- and community-based services. Second, it protects school district budgets rather than a person with disabilities’ ability to remain in their own home.
Here is the disciplined version of what this proves, and what it does not. It does not show that the state party coordinated with CMS or the Justice Department. There is no primary source establishing that, and this piece does not claim it. What it does show is that the fraud-investigation frame was not merely a federal improvisation. The state party had already adopted it in writing, alongside calls for entitlement sunsets, Medicaid block grants, and limits on the governor’s authority, all documented in the same period as the federal actions.
The convergence remains one of chronology and policy, not coordination. But the platform makes clear that the underlying policy objectives were already on the page.
Who built the room
Part of why Minnesota was so exposed is a decision made years before any of this. We documented it in an earlier piece, “The Architects of Minnesota’s Medicaid Fraud Are Now Its Loudest Accusers,” and won’t relitigate it here, except to name the throughline, because the report goes to such lengths to bury it.
In 2017, with Republicans in control of both chambers of the Legislature, the state repealed a rule that had stood for forty-four years, since 1973. The requirement that health plans operating Minnesota’s Medicaid be nonprofit. Repealing it opened the program to for-profit insurers for the first time in state history, a repeal that passed the Republican-controlled Legislature and was signed by DFL Gov. Mark Dayton.
In practice, only one for-profit insurer, UnitedHealthcare, ever entered Minnesota’s Medicaid market, covering about 31,000 of the state’s roughly 1.1 million enrollees, and in 2024 the DFL-controlled Legislature restored the nonprofit-only requirement, effective in 2025. The deeper structural problem is not for-profit ownership but managed care itself: roughly three-quarters of the autism money flows through private insurers, nonprofit and for-profit alike, that the state does not directly audit.
The senator who chief-authored that repeal was Michelle Benson.
That same year, the same majority created Housing Stabilization Services in Senate File 2, with no provider licensing, no mandatory fraud clawback, and no dedicated enforcement. Benson co-authored the bill.
The autism benefit expanded separately through Senate File 562, chief-authored by Republican Sen. Jim Abeler with a DFL co-author. It established provider standards, but not provider licensing or unannounced inspections, the oversight tools the program lacked until 2025.
In the same session, Republicans also advanced a health budget that would have cut the Department of Human Services deeply enough that Governor Mark Dayton vetoed it. In his veto letter, he identified 87 positions that would have been eliminated, “including staff who are responsible for investigating allegations of fraud and abuse.”
Grow the programs. Open the door to for-profit insurers. Cut the investigators. Then, years later, express shock at the fraud
And the senator who led the repeal did not stay in the Senate.
After leaving office, Benson registered as a paid lobbyist for the Health Plan Partnership of Minnesota, a nonprofit trade association whose for-profit members include UnitedHealthcare and Humana, and whose member Aetna operates in Minnesota through a joint venture with nonprofit Allina Health. In 2024, while registered for that group, she testified against the bill restoring the nonprofit-only rule, which the DFL-controlled Legislature passed over her objection, effective in 2025. Her Health Plan Partnership registration ended that year; she has since registered as a lobbyist for the Minnesota Chamber of Commerce and, from March 2026, the Minnesota Hospital Association.
The sole House author of the housing program, Matt Dean, landed at the Center of the American Experiment, the conservative advocacy group waging its own campaign on state fraud, the same month the House Republican caucus sent its $610 million letter to Washington.
The people who built the room without smoke detectors are, today, the loudest voices asking why it caught fire.
What Sen. Abeler says
Sen. Jim Abeler, who chief-authored the 2017 EIDBI expansion, responded to our request for comment. He disputes the premise that the programs were built without fraud protections. Provider enrollment, background studies, and compliance requirements, he says, were the standard guardrails of the era and had “worked to stop or slow fraud for many years under previous administrations.” The 2017 laws, he argues, preserved many of those safeguards. What changed, in his telling, was that state agencies “failed repeatedly to use their existing authority.” He also notes that he supported the 2025 legislation adding autism-provider licensing and clarifying the department’s fraud-prevention role.
He is describing real authority. The state could enroll providers, conduct background studies, and, under longstanding law, suspend payments and impose sanctions when fraud was suspected. But the claim that “the agencies failed to use their authority” tells only half the story.
The missing half belongs to the same Legislature.
That authority was written to be discretionary where it mattered most. The managed-care clawback provision in the 2017 law Abeler co-authored states that the commissioner “may require” repayment—not “must”—even though federal law did not require the more permissive language. At the same time, much of the money was placed beyond the state’s direct oversight, with roughly three-quarters of EIDBI spending flowing through private managed-care organizations the state does not directly audit. And during that same 2017 session, the Legislature passed a budget that would have eliminated dozens of Department of Human Services positions, including fraud investigators, before Governor Dayton vetoed those reductions.
Authority made discretionary, directed toward money the state could not directly see, and left to investigators the Legislature attempted to eliminate is not simply authority that agencies declined to use. The programs also lacked the specific oversight tools that were added only in 2025 and 2026: provider licensing, unannounced inspections, and mandatory clawbacks.
Abeler also frames the programs’ later growth as unprecedented and hard to foresee. For the autism benefit, that framing needs a qualifier.
As described earlier in this piece, a 2019 national change in billing codes shifted the unit of service from 30 minutes to 15, so the same hour of therapy that once billed as two units now bills as four. DHS’s own reports say that change drove up the average cost of services, raising reported spending independent of any increase in the amount of care delivered or in fraud. No DHS report has quantified how much of the growth the change accounts for, but on paper a single unchanged hour of care can look like twice as much. Not all of the increase was growth in the ordinary sense.
Where Abeler and this reporting genuinely converge is on a narrower point: the state responded too slowly, and some existing tools went underused. But the architecture came first.
What the county saw
Long before the federal report, the warnings were coming from inside Minnesota’s own counties, and they reached both parties.
A former county official who spent years coordinating public-assistance fraud investigations in Minnesota, speaking to us on background, described a system where the problem was well known and the follow-through wasn’t there regardless of who held power. “Both Republicans and Democrats knew it,” the official said, adding that the inaction was the same under DFL and GOP administrations alike.
The account tracks the paper trail while withholding identifying details to protect the source’s anonymity. Several years before the federal case, according to the official’s recollection, when Republicans controlled at least one legislative chamber, county investigators brought lawmakers concrete fraud cases, some involving hundreds of thousands of dollars. They asked for a straightforward statutory change to close a loophole that allowed applicants to hide income by commingling business and personal accounts.
The request, backed by county leadership, applied broadly to public assistance programs, not just the two now under federal scrutiny. The proposed change, the official recalled, “just went poof.” It was never adopted.
Referrals of suspected provider fraud sent to the state Department of Human Services routinely went nowhere, the official said, not because either party lacked the will to act, but because the agency was chronically short-staffed. The pattern also predated the two programs singled out in the congressional report. The same schemes had surfaced years earlier in other public assistance programs and simply migrated.
The conclusion matched the throughline of the public record: This is not specific to Minnesota. Every state has fraud.
The door swings both ways
If the pattern so far reads like a story with a single partisan villain, the record complicates it, and honesty requires saying so. The revolving door, and the insurer money, are not one party’s property.
Emily Piper served as commissioner of the Minnesota Department of Human Services under Governor Mark Dayton. In 2017, she warned the Legislature that the department’s oversight capacity was too thin and requested additional fraud-investigation staff that Republicans declined to fund.
Piper later joined the board of Blue Cross and Blue Shield of Minnesota in June 2020 and became its chair in June 2026. Separately, in 2024, the state notified Blue Plus, Blue Cross’s Medicaid plan, that it had been in breach of its contract from 2019 through 2022 over the fraud-recovery provisions discussed in this article. Blue Cross responded to our request for comment. It said the CMS report prompted a DHS corrective-action plan under which Blue Plus reviewed nearly four years of payment-suspension data, a review that yielded “very few findings.” Eight cases were cited from fiscal years 2020 through 2022: in four, the company said, Blue Plus moved quickly to terminate providers engaged in clear fraud, and in the other four it imposed payment suspensions to investigate questionable billing. Blue Plus cooperated with DHS, updated its procedures, and the corrective-action plan was completed and closed with no sanctions imposed.
The chronology places those events in the same record, but it does not establish a connection between them. A board position is not an operating role, the dispute involved contractual compliance rather than fraud, and this article presents no evidence that Piper had any knowledge of, or involvement in, the matters at issue.
Former Democratic state senator Jeff Hayden has likewise gone from the Capitol to lobbying, now representing a broad roster of clients that includes health-care interests. It is the mirror image of Michelle Benson’s path, statehouse to the health-plan industry, run from the other side of the aisle.
Both belong in the record, because the pattern isn’t partisan.
And the biggest concession is the fraud itself. It was real, and some of it enormous. The largest case, Feeding Our Future, involved food assistance rather than Medicaid and, as we saw, was prosecuted years before any of this became a federal crackdown. The question this article examines is not whether fraud occurred, but what was built on top of it.
Housing Stabilization Services, the program most frequently cited in the congressional report, was created in 2017 to help people with disabilities find and maintain housing, as well as people transitioning from homelessness, hospitals, or institutional care. It launched with few guardrails, and fraud took hold. A program projected to cost about $2.6 million annually was paying out more than $100 million by 2024, and a subsequent federal indictment charged eight people with a $15.7 million fraud scheme.
That failure is real, and responsibility for not detecting it sooner rests with the Walz administration. Democrats own that. But the same administration also did the thing for which it receives little attention: it shut the program down in October 2025 rather than allow the money to keep flowing.
Owning a genuine failure, however, is not the same as what was built on top of it.
By 2026, the housing fraud, and the broader “Somali fraud” narrative into which it had been folded, had become a political launchpad. House Speaker Lisa Demuth is running in the Republican primary for governor in part on that record. She did not win the party’s endorsement, but she remains on the ballot, and her campaign continues to feature the issue. House Majority Whip Tom Emmer has likewise used the story to elevate it nationally.
A real failure in a handful of public assistance programs. A much larger political apparatus built on top of it.
What’s at stake
None of this makes the fraud less real. It was real, it is charged, and the people who stole from programs meant to serve vulnerable Minnesotans should answer for every dollar. The state was slow, and that responsibility belongs to the people who were running it.
Even there, though, the record is narrower than the headline. The Legislative Auditor’s finding, the one everyone cites, was a limited review of three specific kickback complaints. It traced the problem to a 1995 rule that was meant to define fraud to include kickbacks but cited the wrong federal statute. The provision it pointed to, as the department later acknowledged, was actually an exception to the federal anti-kickback law, not the prohibition itself. DHS left that error in place for three decades.
Believing it lacked clear authority, the department went to the Legislature to fix it in 2019, 2024, and 2025. Even the 2025 change, the auditor found, did not fully resolve whether DHS could suspend payments on a kickback allegation alone. The new statewide withholding tool it identified, Minnesota Statutes section 15.013, enacted through the state government finance bill, was capped at 60 days and set to expire in 2027. The Legislature strengthened that tool the following year, in 2026, removing both the cap and the sunset.
The auditor’s judgment was that DHS could have moved sooner by correcting its own rule, but the auditor also traced the underlying defect to 1995, decades before any current official held the pen. The portion of the delay the state actually controlled is real, documented, and comparatively small. The rest was inherited.
But a crackdown is also a series of choices. About who gets investigated and who does not. About which quarter of the money gets examined and which three-quarters remain largely untouched. About whose names appear in the report and whose do not. About whether to send the neutral auditors, the ones who found the same failures in Indiana, Wisconsin, Maine, and Colorado, or a one-party congressional committee, a Vice-Presidential criminal referral, and calls for two elected officials to resign.
Taken together, those choices produced a record that focused on the smallest and most visible slice of the problem in one state, governed by the only party subjected to that level of scrutiny, while the portion of Medicaid where most of the money actually flows remained unaudited. And that was true not only in Minnesota, but in every state whose Medicaid director sat in that hearing room and testified under oath.
The people who depend on the answer are not in the hearing room. They are the children receiving autism therapy today, and who may not if funding continues to shrink. They are the adults with disabilities who were able to remain in their own homes instead of entering institutions, and who now watch the legal foundation for that arrangement being narrowed in Washington. They are also the taxpayers, in red states and blue ones alike, who are told, press release after press release, that government has finally protected their money while the part of the program where most of it actually moves remains unaudited across all fifty states.
Some of the cost has already come due, paid by people who had nothing to do with any of it. A fraud story that began with a budget line became a narrative attached to an entire community, and during the operation that narrative helped justify, two U.S. citizens were killed by federal agents. That is the final cost of a crackdown built on a blur: not only dollars, programs, and public trust, but the people it chooses to make the face of the crime.
Minnesota is where this started. The question the record leaves on the table is why it stopped there.
Christy Branham and Monica Healy co-founded and write for The Politics Chicks, which Renee Herskovitz recently joined as investigations editor. Renee, a Minnesota-based investigator of state legislative accountability, built this piece from primary-source records. Every factual claim in this piece is drawn from a named primary source; a full works-cited list follows.
Where this piece examines the conduct of Minnesota officials and agencies, those officials and agencies were contacted for comment, and any responses received are noted. The out-of-state matters (the Centene settlements in Ohio, Texas, Georgia, and Florida, and the Hope Florida investigation) are drawn from court records, official proceedings, and published reporting, and are presented as reflected in those primary sources.
The Department of Homeland Security, Rep. Kristin Robbins, Sen. Jim Abeler, the Minnesota House Republican caucus, through its public affairs office, and Blue Cross and Blue Shield of Minnesota responded to our requests for comment, and their statements are reflected above. The Attorney General’s office declined to provide a formal statement and directed us to its public communications, including its May 2026 announcement of the Medical Assistance Protection Act, described above. Sen. Michelle Benson, former Rep. Matt Dean, the Center of the American Experiment, Rep. Tom Emmer, the House Committee on Oversight and Government Reform, Jeff Hayden, Oracle, the U.S. Department of Justice, the Centers for Medicare & Medicaid Services, and the office of Gov. Tim Walz were contacted for comment and did not respond by publication.
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Sources
Listed in the order the material appears in the piece. Links go to the primary source where one is publicly posted; entries without a link are cited by name and date.
The squeeze
Testimony of John Connolly, Minnesota Medicaid Director, House Energy and Commerce Committee, Subcommittee on Oversight and Investigations hearing, “State Medicaid Program Integrity: Examining Fraud Risks and Oversight Deficiencies,” June 25, 2026. [Source ↗]
CMS Administrator Dr. Mehmet Oz, January 6, 2026 notification to Minnesota regarding a possible $515 million per quarter withholding pending a compliance hearing; referenced in CMS’s February 25, 2026 press release (source 3) and Minnesota DHS’s program-integrity fact-check page. [Source ↗]
CMS deferral of $259,505,491 from Minnesota (Q4 FY2025), announced February 25, 2026. CMS press release, “Trump Administration Prioritizes Affordability by Announcing Major Crackdown on Health Care Fraud.” [Source ↗]
Minnesota’s suit to block the deferral (filed March 2, 2026) and the court’s April 6, 2026 denial of its preliminary-injunction motion (Judge Tostrud, U.S. District Court, District of Minnesota). On the figures: CMS deferred $259,505,491 in total; the Attorney General framed the suit around $243 million because, per his March 2 statement, “of that $259 million being withheld, approximately $243 million targets the same Medicaid service areas” named in the January 6 noncompliance notice. The two figures are the full deferral versus the disputed portion the lawsuit challenges, not a discrepancy. The deferral was more than fifteen times larger than any prior deferral to the state and was described as historically unprecedented in size and timing by outside analysts, not by the court. Minnesota Attorney General’s Office; NPR; Georgetown Center for Children and Families. [Source 1 ↗] [Source 2 ↗] [Source 3 ↗]
Second CMS deferral of $91.5 million against Minnesota’s Q1 FY2026 spending, April 29, 2026 (about $72.7 million of it tied to providers CMS flagged as high-risk). The two deferrals total roughly $350 million, and the litigation is now stayed while the state and CMS attempt to resolve them. Georgetown Center for Children and Families; CMS deferral letter; CBS Minnesota. [Source 1 ↗] [Source 2 ↗] [Source 3 ↗]
Minnesota Medical Assistance (Medicaid) enrollment: more than 1.1 million. Anchor figure 1,135,076 as of February 2026 (KFF Medicaid Enrollment and Unwinding Tracker, from CMS administrative data). An earlier KFF Minnesota Fact Sheet listed 1,171,000 as of May 2025; enrollment fell between the two dates due to unwinding and the July 2025 reconciliation law, so the figures are not in conflict.
CMS selection of Oracle Cloud Infrastructure for federal Medicaid systems modernization via GSA OneGov, February 11, 2026. Oracle Corporation press release, PR Newswire, February 11, 2026, quoting Kim Lynch, EVP, Government, Intelligence and Defense, Oracle; cross-checked against nine independent wire distributions of the identical release. Underlying GSA-Oracle OneGov agreement announced July 7, 2025. [Source 1 ↗] [Source 2 ↗]
Seema Verma’s tenure as CMS Administrator (2017 to 2021) and the agency’s 2019 approval of Minnesota’s Housing Stabilization Services authority; her current role leading Oracle Health (EVP and GM, Oracle Health and Life Sciences, since January 2024), distinct from the Government, Intelligence and Defense unit that represented the OCI selection. [Source 1 ↗] [Source 2 ↗] [Source 3 ↗]
Minnesota’s Oracle contracts, approximately $77 million across state agencies over the prior decade, about $12.4 million via the Department of Human Services, confirmed via Minnesota’s Open Checkbook (state transparency portal), FY2016 to FY2025. [Source ↗]
Oracle Health public comment, CMS CRUSH rulemaking docket CMS-2026-0826-0492, signed by Alex Mugge, Senior Director of Global Health Policy and Regulatory Intelligence (comment period closed March 30, 2026); State of Indiana, CMS, and Oracle 90-day Medicaid fraud-detection AI pilot, announced June 24, 2026 (Indiana Capital Chronicle, WISH-TV, WRTV). Data-use agreement and free/no-cost terms confirmed via WISH-TV and WRTV, June 2026. [Source ↗]
Minnesota DHS Office of Inspector General: surprise autism-provider site visits beginning October 2024; more than 3,000 investigations and more than $50 million identified for recovery since 2020; and a sharp increase in payment withholds in 2025 (DHS reports more than twice as many as in recent years). [Source ↗]
CMS PERM (Payment Error Rate Measurement) notification to Minnesota, January 20, 2026: the state’s Medicaid improper-payment rate was 2.1 percent, against a 6.1 percent national average, a figure that predates the state’s newest fraud-prevention measures. Caveat: the managed-care component was based on only 69 sampled claims, too small to meaningfully audit the MCO spending flagged as under-scrutinized. [Source ↗]
2025 Minnesota legislation granting EIDBI/autism-agency licensure and unannounced inspection authority (effective July 1, 2025).
Governor’s executive order tightening anti-fraud operations, September 17, 2025 (Executive Order 25-10, “Empowering State Agencies to Continue Combatting Fraud”). [Source ↗]
DHS self-initiated termination of Housing Stabilization Services: DHS letter to CMS requesting termination, August 1, 2025; program end effective October 31, 2025, following a 30-day public comment period and CMS approval of the state plan amendment. [Source ↗]
Minnesota’s own anti-fraud enforcement and prosecution: Attorney General Keith Ellison’s Medicaid Fraud Control Unit (MFCU) has secured more than 340 convictions and more than $90 million in restitution and recoveries since 2019; last year it ranked fifth nationally in fraud charges and, over the last six years, fifth in fraud convictions, with a unit of 32 against a Medicaid budget approaching $20 billion; HHS-OIG found Minnesota won the most provider-fraud convictions among similarly sized states from 2020 to 2022. The Medical Assistance Protection Act (MAP Act) passed the Minnesota House 118 to 16 on May 17, 2026 (Attorney General Ellison, Sen. Ann Johnson Stewart, Rep. Matt Norris): expands the MFCU from 32 to 50 staff, creates enhanced sentencing tiers for fraud over $100,000 and over $1,000,000, adds Medical Assistance fraud to the state racketeering statute, extends the statute of limitations, expands subpoena authority over financial records, and raises the maximum penalty from two and a half years to ten. [Source ↗]
The blind spot
U.S. Department of Justice, “Minnesota Health Care Fraud Takedown Results in Charges Against 15 Defendants for Over $90M in Fraud,” May 21, 2026. The $46.6 million EIDBI scheme (about $21.2 million paid) is detailed in the case summary for U.S. v. Shamso Ahmed Hassan et al. [Source 1 ↗] [Source 2 ↗]
Fee-for-service is about a quarter of EIDBI, with roughly three-quarters running through managed care, per the Minnesota Office of the Legislative Auditor’s count; reported in the Star Tribune’s account of the limited scope of the state’s fraud review (Star Tribune may be paywalled; the underlying figure is the Legislative Auditor’s). [Source ↗]
Managed-care financial-recovery provision (the 85% medical-loss-ratio floor, Minn. Stat. § 256B.6928, subd. 2(a)(6), and the discretionary “may require” remittance, subd. 8(g)). The statute was enacted as Laws 2017, First Special Session, chapter 6, article 15, section 7, the same omnibus bill (Senate File 2) and chapter that created Housing Stabilization Services. SF2’s three authors were Sen. Michelle Benson (R) and Sen. Jim Abeler (R) in the Senate and Rep. Matt Dean (R) as sole House author. [Source 1 ↗] [Source 2 ↗]
June 25, 2026 hearing, House Energy and Commerce Subcommittee on Oversight and Investigations, “State Medicaid Program Integrity”: the Medicaid directors of Minnesota, California, New York, and Ohio testified their fraud audits reach fee-for-service claims only, not managed care; Ohio’s Scott Partika is a DeWine appointee; Rep. Diana DeGette’s “blindside blue states while pampering red ones” quote. [Source ↗]
CMS’s March 2026 letter to Gov. Kathy Hochul overstating personal-care enrollment by roughly eleven times (about 450,000 actual), later admitted as an error: Georgetown Center for Children and Families and PBS/AP. [Source 1 ↗] [Source 2 ↗]
The states that got a pass
No wrongdoing is alleged against any named person; each entry carries its hedge.
Fred Schulte and Holly K. Hacker, KFF Health News, on Centene political giving and its state Medicaid overbilling settlements. [Source ↗]
“Years Later, Centene Settlements With States Still Unfinished,” KFF Health News, identifying Georgia and Florida among the remaining non-settling states. [Source ↗]
Ohio: Attorney General Dave Yost sued Centene for Medicaid overbilling; the state Medicaid department suspended the contract it was negotiating with Centene subsidiary Buckeye Health Plan; Centene paid $88.3 million to settle (2021); the department restarted the Buckeye contract that August. Centene lobbyist Michael Kiggin, a law-school classmate of Gov. Mike DeWine (R) whom DeWine appointed to the Ohio State University Board of Trustees, registered to lobby on the Medicaid matter. The state Medicaid department later said it found no emails between Kiggin and its staff, and no evidence ties the friendship to the contract award. [Source 1 ↗] [Source 2 ↗]
Texas Centene settlement, $165.6 million (announced September 2022), the largest state Centene settlement at the time, later surpassed by California’s $215 million (February 2024). The ouster of Civil Medicaid Fraud Division chief Raymond Winter (November 2022) and the resulting drop from 31 to 19 attorneys; separately, the whistleblower complaint to the FBI by senior Paxton aides over the Nate Paul matter. [Source 1 ↗] [Source 2 ↗]
Georgia: no Centene settlement, leaving Georgia one of the last holdouts (with Florida). Centene-linked campaign contributions to Gov. Brian Kemp (R) of more than $100,000 (since 2018) and to AG Chris Carr (R) of more than $70,000, per KFF Health News; Carr’s total came largely from Centene executives, including $10,000 from CEO Sarah London and $6,000 from general counsel Chris Koster. Kemp’s administration hired the law firm Liston & Deas in 2019 to investigate the state’s pharmacy-benefit billing. No evidence links the donations to the decision not to settle. [Source 1 ↗] [Source 2 ↗]
Florida: $67,048,611 Centene settlement (executed September 27, 2024); $10 million routed through the Hope Florida Foundation to two nonprofits and on to Keep Florida Clean (the committee opposing the 2024 marijuana ballot measure, chaired by James Uthmeier while DeSantis’s chief of staff, before his appointment as attorney general); $10.5 million to the Republican Party of Florida and $1.1 million to the governor’s committee (October to December 2024; committees commingled, no single settlement dollar traced end to end). State Attorney Jack Campbell opened a criminal investigation (May 2025); a grand jury questioned current and former DeSantis officials (October 2025); a presentment was returned February 25, 2026, and remains sealed pending a legal challenge. No one named has been charged; the administration disputes wrongdoing. A presentment is a report, not an indictment. [Source 1 ↗] [Source 2 ↗]
HHS Office of Inspector General Medicaid audits finding the same autism/HCBS problems in red and blue states: Wisconsin (A-06-23-01002, July 10, 2025), Maine (A-01-24-00006, Jan. 16, 2026), Colorado (A-09-24-02004, Feb. 25, 2026), and Indiana (A-05-19-00022). Refund demands: WI $12,287,252; ME $28,796,366; CO $42,649,438; IN $22,328,438. [Source ↗]
June 25, 2026 hearing testimony regarding the CMS deferral of roughly $1.3 billion against California, announced May 13, 2026. [Source ↗]
The report
The Cost of Doing Nothing, 205-page congressional report, released June 8, 2026. [Source ↗]
The roughly $9 billion U.S. Attorney’s Office estimate across 14 high-risk programs; Gov. Walz’s sworn dispute of it, in his testimony to the committee.
The $610 million figure originating in the February 10, 2025 letter to AG Pam Bondi from the Minnesota House Republican caucus (Speaker Lisa Demuth, Majority Leader Harry Niska, and Rep. Kristin Robbins), which enclosed the caucus’s “Minnesota Fraud and Waste Case Tracker, 2019–2025” citing “25 known instances” totaling “over $610 million.” [Source ↗]
DHS Legislative Report, EIDBI Licensing Recommendations, January 2025 (DHS-8601B-ENG 11-24), which attributes the jump in average EIDBI service cost to the 2018–2019 national billing-code change; the same finding was cited again in DHS’s February 23, 2026 presentation to the House Fraud Prevention and State Agency Oversight Policy Committee (a separate document). The old-to-new conversion (codes 0364T/0365T billed in 30-minute units, to CPT 97153 billed in 15-minute units): ABA Coding Coalition / AMA CPT Adaptive Behavior code-conversion table, Oct. 8, 2018. Eight new Category I codes (97151–97158) effective January 1, 2019, set by the AMA CPT Editorial Panel. Minnesota State Plan Amendment TN 19-01 (effective January 1, 2019; approved June 6, 2019). [Source 1 ↗] [Source 2 ↗] [Source 3 ↗]
The two 2017 laws behind the programs: Senate File 2 (Chapter 6, First Special Session, signed May 30, 2017), chief-authored by Sen. Michelle Benson with Rep. Matt Dean as sole House author, creating Housing Stabilization Services; and Senate File 562 (Chapter 19, regular session, signed April 27, 2017), chief-authored by Sen. Jim Abeler (R) with DFL Sen. John Hoffman, expanding the EIDBI autism benefit (passed the House 131–0). Both laws were enacted before Gov. Walz took office (January 7, 2019). Minnesota Secretary of State enrollment records.
January 13, 2026 Government Operations Subcommittee hearing, “Curbing Federal Fraud,” with witnesses from Treasury (Renata Miskell), GAO (Sterling Thomas), and PRAC (Ken Dieffenbach) on the federal “pay and chase” default and Do Not Pay access. Treasury’s written testimony: “In fiscal year 2024, only four percent of federal programs completed the legal requirements to access all the databases in Do Not Pay.” [Source 1 ↗] [Source 2 ↗]
Sworn transcribed interviews of former DHS Commissioners Tony Lourey (January 2026) and Jodi Harpstead (February 2026). [Source ↗]
Testimony of Emily Honer, transcript p. 43 (verbatim): “Because the USDA and the Office of Inspector General are supposed to be our final stop when we have used all of our tools. And for that to fail not only allowed Feeding Our Future to continue… I feel like it accelerated Feeding Our Future in feeling that they were incredibly powerful.” The report characterized this as Honer “blaming USDA” and cites/reproduces only p. 40 (the stop-payment-mechanics discussion), per report body p. 52, footnotes 233–234, and Appendix p. 153. Honer transcribed interview conducted January 29, 2026. [Source 1 ↗] [Source 2 ↗]
Jack Emmer, chief counsel for investigations, House Committee on Oversight and Government Reform (since November 2025), and son of Rep. Tom Emmer; he personally conducted the Minnesota transcribed interviews (Honer, Jan. 29, 2026). His wife, Kelsey Emmer, is communications director for Rep. Pete Stauber (R-MN); Rep. Emmer’s LegiStorm profile lists her as his daughter-in-law. [Source 1 ↗] [Source 2 ↗] [Source 3 ↗]
Minority-staff share of interview time (about 8%), per the committee’s own accounting.
Alyssa Chen and Max Nesterak, "Minnesota's spending doubled across 14 Medicaid programs at 'high risk' of fraud in past 5 years," Minnesota Reformer, April 21, 2026. Annual DHS spending data obtained via public records request, showing spending across the 14 high-risk Medicaid programs rose from $2.06 billion (2021) to $4.32 billion (2025); documents non-fraud drivers of the growth — the shift from institutions to home- and community-based care, inflation and legislatively mandated rate increases (including 15% in 2024), an aging population, and programs designed to expand — and quotes Sen. Jim Abeler that the autism growth "was desirable because the program was expanding the way it was designed to go." Source ↗
The louder story
Nick Shirley video, posted December 26, 2025 (filmed December 16), millions of views, alleging fraud at Somali-run day-care and health-care providers. State inspections found the centers operating as expected and had not substantiated the fraud he alleged; some centers were separately cited for safety violations. [Source 1 ↗] [Source 2 ↗] [Source 3 ↗]
Minnesota House Republican caucus and Nick Shirley: at a December 29, 2025 virtual press conference, Speaker Lisa Demuth said the caucus had “been working to expose fraud for years, including working with Nick Shirley and agency whistleblowers” (video, 0:17). Majority Leader Harry Niska said “much of the information” a man in the video was providing “was due to information he got from the House Republican staff,” and described that man’s contact with “friends at the Capitol” as “cooperation with staff at the House Republican Caucus” (video, 8:01 and 10:33). Press conference video; see also Fox 9. Responding to our request for comment, the caucus’s public affairs office said legislators did not work with Shirley directly and that a staffer provided a man featured in the video, identified as David, and other outlets, with publicly available Department of Human Services information. [Source 1 ↗] [Source 2 ↗]
Rep. Tom Emmer, Faith and Freedom Coalition event (June 2026): Somalis who “don’t assimilate” should “go the hell back to where they came from.” Separately, earlier in 2026, Emmer called to deport Somali Americans engaged in fraud and to revoke naturalized citizenship. Rep. Ilhan Omar’s response: “I assimilated all the way to Congress and this idiot still tells me to go back where I came from.” [Source 1 ↗] [Source 2 ↗]
The conflation: Feeding Our Future was federal USDA child-nutrition money (not Medicaid); Housing Stabilization Services and the EIDBI/autism benefit are Medicaid. At a December 18, 2025 press conference, the U.S. Attorney’s Office for Minnesota reported that 82 of 92 defendants charged across the child-nutrition, housing, and autism fraud schemes were Somali-American, the majority U.S. citizens (Associated Press, Dec. 31, 2025). That figure is a snapshot as of that date; it has not been recalculated to include the additional defendants charged in 2026, including the 15-defendant takedown announced in May, which named both Somali and non-Somali defendants. No updated aggregate percentage has been published since. [Source 1 ↗] [Source 2 ↗] [Source 3 ↗] [Source 4 ↗]
Feeding Our Future prosecution: 79 defendants indicted; more than 60 convicted, most by guilty plea, seven at trial (the Star Tribune counted the 63rd conviction on March 20, 2026, and the number continues to rise as defendants plead out). Ringleader Aimee Bock and co-defendant Salim Said found guilty on all counts, March 19, 2025; Bock sentenced May 2026 to 500 months (about 41 years) and $240 million-plus in restitution. Prosecuted by the U.S. Attorney’s Office, District of Minnesota, beginning 2022. [Source 1 ↗] [Source 2 ↗] [Source 3 ↗] [Source 4 ↗]
Operation Metro Surge: DHS announced December 4, 2025; described as its largest immigration-enforcement operation; the White House framed it as a multiagency effort to investigate the Minnesota fraud. Roughly 3,000 federal agents; nearly 4,000 people arrested by March, the vast majority Latin American immigrants (about half from Ecuador or Mexico); 106 arrestees (fewer than 3%) from Somalia, none tied to the social-services fraud cases; Minnesota data showed roughly three-quarters of those arrested had no criminal record. Two U.S. citizens killed by federal agents, Renée Nicole Good (Jan. 7, 2026) and Alex Pretti (Jan. 24, 2026). Human Rights Watch, A Manufactured Crisis, June 18, 2026. [Source 1 ↗] [Source 2 ↗] [Source 3 ↗] [Source 4 ↗]
Statement to the authors, U.S. Department of Homeland Security, Office of Public Affairs, July 5, 2026 (spokesperson response to the reporting, and department statements on the Renée Good and Alex Pretti incidents; Pretti matter referred to the FBI). On file with the authors.
Erasing the reason
U.S. Department of Justice, Office of Legal Counsel opinion, June 18, 2026 (authored by Lanora Pettit, Principal Deputy Assistant Attorney General); Pettit’s Texas AG service (Office of the Attorney General of Texas press release, Jan. 30, 2025, and Texas House Resolution 142, enrolled March 6, 2025). [Source ↗]
H.R.1, the 2025 budget reconciliation law, signed July 4, 2025, reducing federal Medicaid spending by roughly $911 billion over the decade (CBO estimate as allocated by KFF). KFF, “Allocating CBO’s Estimates of Federal Medicaid Spending Reductions Across the States: Enacted Reconciliation Package.” [Source ↗]
The Olmstead integration mandate itself: Olmstead v. L.C., 527 U.S. 581 (1999). Now challenged in Texas v. Kennedy (formerly Texas v. Becerra), in which six states (Texas, Florida, Alaska, Louisiana, Missouri, Montana) contest the mandate; summary-judgment briefing runs through August 2026, no ruling yet. [Source ↗]
It’s in the platform
Republican Party of Minnesota, 2026 Platform: fraud-investigation plank (LAA Sec. 7, p. 13); sunset provisions (LAA Sec. 9, p. 13); Medicaid under states’ control / repeal ACA (Sec. 3, p. 27); judicial-appointment limit (Sec. 7, p. 22); emergency-powers authorization (Sec. 9, p. 23); Senate-vacancy special election (LAA Sec. 9, p. 13); felony-conviction resignation (Sec. 9 Principles, p. 23); special-education counter-signal (LAA Sec. 4, p. 12). [Source ↗]
Who built the room
The 1973 statute requiring nonprofit health plans (Minn. Stat. ch. 62D); its 2017 repeal via Senate File 1, chief-authored by Sen. Michelle Benson; and the 2024 DFL-enacted restoration of the nonprofit-only requirement for Medicaid managed care (effective 2025), which affected only UnitedHealthcare, the sole for-profit Medicaid MCO in the state. [Source 1 ↗] [Source 2 ↗] [Source 3 ↗]
Senate File 2 (Chapter 6, First Special Session, 2017) created Housing Stabilization Services, chief-authored by Sen. Michelle Benson (Senate) and Rep. Matt Dean (sole House author). The EIDBI autism benefit expanded separately through Senate File 562 (Chapter 19, 2017), chief-authored by Sen. Jim Abeler (R) with DFL Sen. John Hoffman; it added provider standards but not licensing or unannounced-inspection authority, which the program lacked until 2025. Minnesota Secretary of State enrollment records; Minnesota Legislature bill histories (SF2, SF562).
Gov. Mark Dayton’s May 12, 2017 veto letter for the omnibus Health and Human Services finance bill (SF800/HF945, Chapter 45, authored by Sen. Michelle Benson and Rep. Matt Dean): the bill’s 8.5% cut to DHS operations “would impact an additional 87 positions, including staff who are responsible for investigating allegations of fraud and abuse.” The same letter also confirms the Senate File 1 for-profit-HMO repeal (”the last state to allow for-profit HMOs”). [Source ↗]
Minnesota Campaign Finance and Public Disclosure Board lobbyist registry, Benson reg. #5590: Health Plan Partnership of Minnesota (registered January–December 2024; members UnitedHealthcare, Humana, Aetna) and testimony against HF 3529 (2024); subsequent registrations for the Minnesota Chamber of Commerce (December 2024–October 2025) and the Minnesota Hospital Association (from March 2026). [Source ↗]
Matt Dean’s move to the Center of the American Experiment, February 2025.
Statement to the authors from Sen. Jim Abeler (R), provided through the Senate Republican Caucus (Rachel Aplikowski, Media Relations Director), July 2026, on file with the authors: Abeler says the 2017 programs retained the standard fraud protections of the era, including provider enrollment, background studies, and the state’s authority to suspend payments and impose sanctions, and attributes the resulting fraud to agencies failing to use that authority. The pre-existing sanction and payment-suspension authority appears at Minn. Stat. § 256B.064 (Sanctions; Monetary Recovery); the EIDBI benefit as it stood in 2016 is at Minn. Stat. § 256B.0949; and the 2025 EIDBI reforms he cites were enacted in Laws 2025, First Special Session, chapter 9, article 6. [Source 1 ↗] [Source 2 ↗] [Source 3 ↗]
What the county saw
Background interview with a former Minnesota county fraud-prevention official, conducted by the authors, June 2026. On background by mutual agreement; name and identifying details withheld at the source’s request.
The door swings both ways
Emily Piper: Human Services commissioner under Gov. Mark Dayton; trustee and governance-committee chair of the Blue Cross and Blue Shield of Minnesota Board of Trustees. Leadership biography, Hazelden Betty Ford Foundation. [Source ↗]
DHS’s 2024 corrective-action determination that Blue Plus, Blue Cross and Blue Shield of Minnesota’s Medicaid HMO, was in breach of its Prepaid Medical Assistance and MinnesotaCare contract, over the provisions requiring monetary recovery in cases of fraud and abuse by subcontractors (DHS corrective-action letter, May 22, 2024). Business Insurance, “Minnesota reprimands Blue Plus for Medicaid contract breach,” July 10, 2024. [Source ↗]
Statement to the authors from Blue Cross and Blue Shield of Minnesota (Jim McManus, Sr. Director of Public Relations), July 8, 2026, on file with the authors: the company said the DHS corrective-action plan review of nearly four years of Blue Plus payment-suspension data yielded “very few findings,” citing eight cases from fiscal years 2020 through 2022 (four provider terminations for clear fraud, four investigative payment suspensions); that Blue Plus cooperated, updated its procedures, and the plan was completed and closed with no sanctions; and that Emily Piper has served on the Blue Cross board since June 2020, became board chair in June 2026, and served on the Blue Plus board from June 2024 to June 2026.
Minnesota Campaign Finance Board lobbyist registry (Hayden reg. #4885): a broad current roster of clients including health-care interests such as Allina Health and Gilead Sciences. [Source ↗]
Housing Stabilization Services scale and fraud: authorized in 2017 (Senate File 2); DHS projected it at about $2.6 million a year, and it grew to more than $104 million by 2024; a federal takedown charged eight defendants with about $15.7 million; the state terminated the program October 31, 2025. [Source 1 ↗] [Source 2 ↗]
Lisa Demuth’s gubernatorial run: candidacy announced November 2025; the Republican convention endorsed Kendall Qualls after 10 ballots; Demuth qualified for the August 11, 2026 primary (a three-way race with Qualls and Mike Lindell), campaigning statewide. [Source 1 ↗] [Source 2 ↗] [Source 3 ↗]
Rep. Tom Emmer’s use of the fraud story to raise his national profile (see The louder story, source 3).
The reckoning
Minnesota Office of the Legislative Auditor, Special Review, “Department of Human Services Investigations of Alleged Kickbacks in the EIDBI Program,” March 17, 2026: a limited review of three specific kickback complaints. The auditor traced the problem to a 1995 rule (Minn. R. 9505.2165, subd. 4, item C) meant to define fraud to include kickbacks but which cited the wrong federal statute, an exception to the anti-kickback law, an error DHS acknowledged and could have corrected by rule at any time. DHS instead sought legislative fixes in 2019, 2024, and 2025; the auditor found even the 2025 change did not fully resolve whether DHS could suspend payments on a kickback allegation alone. The 2025 statewide withholding tool, Minn. Stat. § 15.013 (enacted as Laws 2025, ch. 39, art. 2, sec. 22; SF 3045), was capped at 60 days and set to sunset July 1, 2027; Laws 2026, ch. 122 (HF 3629, signed May 26, 2026) removed the cap and the sunset and lowered the standard to a verified credible allegation. Both the 2025 tool and the 2026 fix passed with bipartisan support. [Source ↗]
Phenomenal - now to get this piece picked up and shared more widely
Wow - superlative detail! Bottom line, for me, is that the Rs know how to stack the deck, how to bury inconvenient facts that counter their desired goal, whom to target, and how to cover their tracks. If only they would invest this much effort and funding toward party-agnostic, citizen-benefiting actions! But there I go, dreaming again.... 😎✌️