Minnesota GOP on fraud under Walz: 'Taxpayers are tired of being ripped off'

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Good afternoon. Thank you for joining us for this press conference tonight or this afternoon. By now everyone has seen the viral video that in under an hour exposed more than a million dollars in fraud. Our caucus has been working to expose fraud for years including working with Nick Shirley and agency whistleblowers to get the information out to the public and to hold the walls administration accountable. Well, some of these issues have been reported on previously. The amount of attention and outcry that you are seeing is a direct result of the massive frustration » Recording in progress. from Minnesota taxpayers who are tired of being ripped off by fraudsters. The walls administration had years to address these issues but has frequently ignored or downplayed the issues at every turn. During the Feeding Our Future scandal the walls administration entered into a stipulation agreement that expedited site review and restarted payments despite knowing that fraud was occurring. Back in 2024 when news first broke about potential fraud in the autism services DHS officials claimed that explosive growth was pretty consistent with other DHS programs. And an assistant commissioner was quoted as saying I don’t think we’re surprised or particularly disturbed by the rate of growth. The fraud committee led by representative Kristen Robbins featured a number of these apparently vacant sites in a hearing that took place all the way back in February. Which also included the quality the infamous quality learning center featured in the viral video. » [snorts] » I also want to note that KSTP reported on license violations at some of these sites all the way back in January and noted that quote no children or staff were found at either location. Last session as you remember House Republicans fought to pass the office of Inspector General which was passed with overwhelming support by the Senate. It has support of the House Republican caucus but was blocked every time by House Democrats. So given the intense interest we’re calling on the walls administration to take the following steps. We have six steps that we would like to see the walls administration take. The first would be to release the documents related to fraud that have been requested by the media and the fraud committee as well as other legislators. As a point of note the Star Tribune reported many of the data requests related to potential fraud have not been released by the walls administration both to the media or to legislators. Secondly, we would like the walls administration to release any available records related to inspections of sites identified in the viral video. Third, we would like the walls administration to redirect available resources to unannounced in-person site visits. Next, we would like the walls administration to conduct a full review of money directed to NGOs by state agencies. That’s as basic as confirming the IRS status cross-checking for connections or connections to the indicted or suspected fraudsters and more. Next, we would like the walls administration to consider stopping payments in the other 13 high-risk programs and finally Governor Wallace should also ask Attorney General Ellison to withdraw his lawsuit against the feds that is seeking to stop the redetermination process being pushed for by the US Department of Agriculture. It really begs the question of why is Attorney General Ellison filing lawsuits against the feds instead of working with them to root out fraud. So with that I will turn it to leader Niska for additional comments and at the end we’ll take questions. Thank you Speaker Daudt. We also have a challenge for you those of you in the media. We’re ready to provide you with information on many of the sites of several service providers that seem suspicious empty offices multiple providers in a single building and other red flags so you can do the same kind of work that Nick Shirley did in the viral video and that a few other media members have done. These are all sites that have been flagged by the fraud committee for DHS previously but they continue to operate and receive millions in taxpayer dollars. Some may be legitimate but based on our work and the efforts of citizen journalists it appears that many may be entirely fraudulent. We’re happy to provide you with that information and allow all of those of you in the media who are interested in pursuing the story to pursue it further. In addition we applaud today the op-ed from former legislative auditor Jim Nobles. He had an excellent piece in the Star Tribune criticizing Governor Walz for disputing the US Attorney’s offices estimates and adding that quote rather than debate and criticize the US Attorney the governor should give the people of Minnesota an honest explanation of why fraud was allowed to grow under his administration and he should apologize for his administration’s negligence. There are many questions that the governor needs to answer. Why did the governor enter into those stipulation agreements with fraudsters back during the Feeding Our Future scandal? Why did DHS downplay the explosive growth of autism and housing support services before they changed their tune? Why has no agency official been fired or publicly disciplined for these failures? Those are just some of the questions that we’ve been asking for years and the governor needs to answer and we believe you all have a responsibility to pursue as well. Thank you we’ll take questions. Anyone has questions you can raise your hand and I’ll call you call on you. All right, Alex Derosier. Yeah, I just had a quick question about the the video itself. So um would you be able to share with us a little bit more about what you know about the daycare providers in that video and any any other uh just a quick overview of some of the evidence that you have that kind of corroborates what what he’s claiming in the video cuz uh yeah, I’m just kind of curious about what you’ve heard. You know, I’ve heard of this this one infamous learning center but I mean what else what else have you heard? Um thanks Alex. Well again, you know, our fraud committee has been doing excellent work and so back in February um there was conversation and in one of the fraud committee hearings we know that the quality and I will correct the misspelling on their sign but the quality learning center was featured in that viral video. That was already talked about in the fraud committee back in February. If DHS or the walls administration had been serious about wanting to root out fraud they would have already been taking care of these things much before we brought it up in February but when they heard about it in the fraud committee hearing they easily could have done on-site inspections and shut it down at that point. That’s not what we’re seeing. I I would also add much of the information that one of the gentlemen in that video was providing was due to uh information he got from the House Republican staff. There was another TV reporter who also covered the quality learning center in January also provided some information by the House Republican caucus staff. That was ironically during the time when Republicans were ready to show up for work and work on this fraud issue and Democrats were boycotting in part because we had told them that we intended to have a fraud an agency oversight committee and then they decided not to show up for work. So this has been something that we have been ready and willing to provide information to to anyone who wants to pursue this including some of the information that ended up in that video. Of course. The FBI director Kash Patel over the weekend released a statement that said the FBI has dismantled the $250 million dollar fraud scheme but that the FBI believes quote this is just the very tip of a very large iceberg. Speaker Daudt I guess do you want you have a reaction to that statement at all? Thanks for the the question and yes I would say that we are grateful for the work of the US Attorney’s office and the feds as they’ve come in and they’ve exposed and they’re starting to prosecute some of these cases. Again, House Republicans have been sounding the alarm on fraud for years. The entire time in office Governor Walz has not taken action to combat fraud as leader Niska mentioned no one’s lost their job no one has been uh disciplined in any way, everyone just keeps their job. And so, we’re grateful for the work from uh the US Attorney’s office and the feds to shine this light. Fraud needs to end in the state, and if this is what it takes since there’s been inaction by our current governor, then this is where we’re at. And Faircloth? Yeah, just to follow up for Leader Niska, what what exact information did you all provide again to the House GOP Caucus provide, and was it to uh the David guy in the video or Nick Schirling? Just clarifying. Um the uh in the video, the 42-minute-long video, there is a reference by David to conversations he’d have he’s had with friends at the Capitol. That was cooperation with uh staff at the House Republican Caucus. Got it. Thank you. And Gorham? Uh yeah, I’m wondering if um either Leader Niska or or Speaker Daudt could just comment on a couple of members of the Republican Caucus calling for the governor to resign over uh these recent developments. Is that something you guys agree with? Uh is that something you feel uh is not necessary uh to that full extent? Um thanks for the question, Quinn. You know, there’s almost $9 billion of suspected fraud. Much you know, much of that is actually proven, and there’s been convictions. To have a governor in his second term that has allowed this to go on under his watch, under his administration for this long, taxpayers are fed up with this. They’re frustrated. We’ve watched our state budget explode. We’ve watched all of our taxes and fees go up, and Minnesota taxpayers across the state are done with funding fraud here in the state. That’s the frustrate frustration that we are hearing from across the state, and as you saw in the letter today. I would just add in any [clears throat] in any uh in any organization, any company, anyone who oversaw the kind of failure that uh the chief executive of the state has has overseen, um there would we those in charge would find a way to get rid of that leader. Uh unfortunately, what we’re dealing with in Minnesota is that if Governor Walz resigns, the next person up for the job is the person who has been by his side throughout this entire failed administration um as well. So, it it may ultimately be up to the people of Minnesota to fire Governor Walz to ballot box in um in November of 2026. And one one other piece that I will definitely add to that, as you saw in the um op-ed from Jim Nobles um that was referenced by Leader Niska earlier, um when there was a pattern of fraud, as we saw in the child care, and then it’s gone on through multiple different agencies, um Jim No- Nobles said in that uh article that all the state needed to do was to implement standard financial controls and oversight. That has not happened. That is why fraud has gone on unchecked for this long, for 7 years. Eric Eskola? Um uh Madam Speaker, with the 2026 legislature approaching and a tie in the House, what if anything have you got planned on this issue uh in the uh coming session? Thanks for the question, Eric. Uh this is a top issue for us as we return into session. As I mentioned, the Office of Inspector General was widely supported in the Senate and by House Republicans. That would be something that we could bring forward, but we need solutions, and if the governor isn’t going to do it, the legislature will take action immediately to put things into place to stop fraud here in the state. This is top of mind for Minnesotans, top of mind for House Republicans. Any specifics? Any specifics at all? Um we will have more specifics as they roll out, um but as I had mentioned in my earlier comments, even if it’s not legislative action, just those top six things that we would like to see from the governor starting today if unless he’s already gotten it done, maybe by time this um he hears this press conference, he will look at those six items of releasing documents, um releasing available records, redirecting available resources to the unannounced in-person site visits, conducting a full review of any money that is directed at NGOs that there’s a connection with fraudsters, stopping payments in the 13 high-risk programs, and then of course asking um or requesting that Attorney General Ellison would focus on uh fraud and not suing the government. Maybe those things will already take place by the governor, but if not, we are going to be working on many more things to end fraud here in the state when we return in February. Thanks. If I could add if I could add two more uh additional points, uh House File 2, which Democrats uh blocked in committee last year, would have a a number of very important agency oversight steps. Democrats have been unwilling to do that. We’re also gravely concerned that on Wednesday, a new tax is going to be kicked in on every Minnesota employer and employee. That’s going into another program that we have seen and and has been shown in the fraud committee to be uh very vulnerable to uh potential fraud. And so, it’s going to be a very important topic of conversation uh in dealing with that new paid family medical leave uh program as to what fraud controls are going to be put into place. But we’re certainly looking at uh fraud solutions in every area of uh state government um as we go into this next legislative session. It will be one of the most the most important thing that we work on. Dana Ferguson? Okay. Um I just had a clarification question for Leader Niska. Um Leader Niska, you alluded to information that the fraud committee has uh regarding some of these sites that they were concerned about, and they passed it on to DHS. I wonder if you can talk a little bit more about the information that they provided, and did the members feel like that was uh sort of taken advantage of by the department? Did they follow up on those uh reports that were sent over? Uh we can provide that information to you, Dana. Uh the information was not really followed up on by DHS. There’s also, I think what you’re getting at as well as some some whistleblower tips from whistleblowers who didn’t want their information shared with DHS because of their past uh relationship uh with DHS and the way that DHS has uh has uh retaliated against them. Um so, that’s uh part of the concern as well. But we’re um as I had mentioned in our earlier comments, we’re happy to provide uh for you any of that uh background information that you can follow up on. And just that would be information that you would share with us that’s already been sent over to DHS? Um I believe it has all been sent over to DHS. Uh we can confirm that. Cool. Thank you. Ashley Walker? I believe she had put a question in the chat. Yeah, it looks like um she put the question in the chat. Throughout the fraud unveiling discussions, convictions, the GOP and DFL have taken multiple shots against each other, state government uh Governor Walz, um they’ve also both sides have made demands. What ideas, both legislative and through community action, to do or does I assume the House Caucus have to work with DFL lawmakers during the 2026 legislative session? Uh we we will definitely be working with uh DFL House members. As you know, we are tied in the House or will be potentially back to a tie. We are not right now. Republicans have 67, Democrats have 66. When we return, it’s most likely that we will be back into a tie, um and the Senate has DFL control by one member. And so, we will be working, Democrats and Republicans. It’s important to point out, though, fraud is not a partisan issue. Minnesota taxpayers have been disenfranchised and robbed of their fraud dollars. That isn’t Democrat, that isn’t Republican. That should be something we could all join together on and ending the fraud and instead of having things such as the OIG bill blocked by Democrats. We need to work together. It is not a partisan issue. Fraud in Minnesota needs to stop. Alex Derosier? Hey, thanks for the second uh question here. Um I just was wondering if there was any reaction to today uh Department of Children, Youth, and Families said that, you know, they did some surprise visits to these daycare centers that were in the video. And uh the commissioner said of that agency said that, you know, every time they went, there were kids there. There was no indication that there was uh you know, any sort of fraud going on. Um you know, these were they said they were surprise visits. Just wondering what what your thoughts are on that. And do you do the agencies seem to kind of they’re kind of pushing back against uh uh allegations of fraud, it seems. Well, we look forward to when Governor Walz chooses to release any of the available records related to the inspections of the sites identified in the viral video. But as noted by our fraud committee, by other investigative reporters, and then on the viral video, uh there have been multiple uh attempts to visit some of these places where doors are locked, no children are in sight. No workers are in sight. And so I I don’t know what is being based off of. I haven’t heard the commissioner the youth and family Department of Youth and Family. I haven’t heard the commissioner’s statement directly, but as long as they release those records, so we have proof of that, it’ll be a little bit better for people to understand that maybe there isn’t fraud when it’s been proven over and over that there’s no children in in any of these sites. The fundamental problem here is that we have a governor and an administration that has totally broken its trust with the people of Minnesota. And so it’s very difficult to know what to believe out of the administration. We know that there are many many millions of dollars, likely many billions of dollars of fraud under the watch of this governor. He hasn’t fired a single commissioner. He hasn’t fired a single or disciplined a single person because of the massive fraud that’s happened under his watch. So it’s very difficult to for any Minnesotan and it’s very difficult for us to take at faith value face value anything that the Walls administration says on this topic. And that’s really really sad for our state and for the taxpayer dollars that have been looted from our state by fraudsters and criminals under this governor. It’s like that’s all the questions we have. If you have additional follow-ups, you can email me. Otherwise, thank you all for joining. Thank you.