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Good morning,
I hope you and your families are enjoying a pleasant start to the new year. I am really grateful I had the opportunity to take some time off with my family and celebrate the holidays together. The turn of the year means that we are getting much closer to the 2026 legislative session. So, our attention is turning towards the session, especially as one of our key topics, fraud, continues to make headlines and demand our focus across the state.
Walz Ditches Reelection Effort in the Face of Mountain of Fraud
Under mounting pressure due to the massive, and growing, fraud scandal here in Minnesota, Governor Tim Walz announced on Monday that he is 'declining' to continue his effort to serve an unprecedented third term. When he finally answered questions on Tuesday, he said that he was stepping away from the campaign so that he could focus all of his attention for the next 11 months on tackling the fraud...which he hasn't done for the last 7 years.
It is very clear that rotating Walz out for another Democrat from the bench will NOT solve the problem. Our state is so entrenched in the fraud problem because of the political system that Walz and his Democrat friends have created. In order to resolve this industrial-scale fraud we need new leadership and the answer is not one of Walz's cronies.
Check out this clip from Walz's PFML press conference, starting at 29:00, to hear his answers about his decision to drop out of the race.
OLA Report
This week the Office of the Legislative Auditor (OLA), a nonpartisan office serving the legislature, released an audit report on the Behavioral Health Administration (BHA), a division of DHS here in MN. The report was shocking, revealing consistent and widespread actions across the department to ignore grant management policies and irresponsibly disperse funds to grantees.
As the second quote says, several employees were found to be entering documents into the system AFTER the audit began and the OLA requested the documents. This can be seen as an attempt to cover up their mistakes and mismanagement, which are obviously part of the culture in the administration.
Another groundbreaking quote from a BHA employee that was released during the meeting, which read: "Executive leadership...won't take staff concerns seriously until something serious happens or it makes the news."
You can view the meeting recording here.
PFML Applications Explode in First 2 Days
As you may know, the highly concerning PFML program launched on January 1st. While this is an important program and is very helpful in theory, the iteration that just rolled out is bad for business—especially small businesses—and has no oversight. In Minnesota, where state programs are riddled with fraud, the last thing we need is another program with no oversight at the expense of the taxpayer.
Projections prior to the introduction of the program figured there would be 130,000 applications and claims during the first year. Within the first two days of the program there were in excess of 12,000 applications, likely from parents who had a child during 2025 and want to cash in on their bonding leave before their child's first birthday.
During a press conference earlier this week, DEED Commissioner Matt Varilek, who oversees the program, stated that those who will be doing oversight for the program will "make themselves known to us." Wouldn't it be nice if the fraudsters would just 'make themselves known' too? It is not very reassuring to hear that a roughly $1 billion per year program doesn't have oversight in line. Even better, the commissioner said that he doesn't know what the acceptance rate of claims is.
Time will tell what happens with the program this year, but the signs are not good so far.
Testifying about MN Fraud to Congress
On Wednesday, Reps. Robbins, Hudson, and Rarick testified to the House Oversight Committee about our massive fraud problem here in Minnesota. They sat in the committee for over 5 hours, answering questions by congressional representatives about the nature and scope of the fraud. Interestingly enough, many of the DFL reps. seemed to have more questions about Trump and the White House than the $9 billion that has been lost to fraud, both in state and federal funds.
It is past time to get serious about fraud here, and it's clear that our state leadership is not doing that for us. I am grateful for our federal partners that are willing to investigate and charge those who have taken advantage of these programs.
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