WASHINGTON – Congress returned to the issue of fraud in Minnesota this week as Sen. Ted Cruz, R-Texas, revived the issue in a Senate Judiciary Committee hearing that was long on accusations but short on evidence.
Republicans on the panel invited David Hoch, who was featured in Nick Shirley’s videos of Minnesota day care centers. They also invited state Rep. Kristin Robbins, the Republican chair of a state Legislature panel on fraud who had testified before a House Oversight and Government Reform Committee on the issue.
As she did before the House panel, Robbins, who is running for governor, blamed fraud in Minnesota health and social service programs on Gov. Tim Walz and other Democrats.
“Fraud flourishes when leaders ignore it and criminals see they can get away with it,” Robbins said. “Tim Walz hasn’t held anyone accountable.”
Related: Here’s what’s really happening with child care fraud in Minnesota
She also said state officials “have actively … harmed whistle blowers who had tried to point (fraud) out and they have tried to shut down investigations.”
But as she did during the House oversight committee hearing, Robbins did not provide evidence of the whistleblower complaints.
Meanwhile, Hoch said he began to focus on childcare centers in the Twin Cities because he noticed there were a lot of them.
“Most notably, the enormous number of childcare facilities that had opened up. I would drive around the Twin Cities, and it seemed these childcare facilities were literally on every block; some blocks had two or three childcare facilities – on the same block.” Hoch testified.
He also said that snow that covered the ground around the centers provided another tip.
“Minnesota sees a fair amount of snow in the winter, and I began to notice there were never any footprints outside many of these childcares,” he said. “When there were any footprints, they were always adult footprints.”
Hock also said he conducted more sleuthing.
“I began to check the Minnesota Secretary of State’s website, to find out just who owned all these childcares. Guess what? Every one of them was Somali-owned,” Hoch said.
A lot of figures were thrown around regarding Minnesota fraud. Robbins cited Assistant U.S. Attorney Joe Thompson’s estimate that the fraud in 14 Medicaid-funded programs could total $9 billion. Hoch said total fraud in Minnesota “is easily in excess of $30 billion when you take everything into account.”
Hoch later said the amount of fraud could reach $80 billion.
Thompson cited the $9 billion figure in the context of programs that “raised a red flag.” Hoch, meanwhile, did not provide any documentation for his estimations of fraud.
Democrats on the panel invited Robert Weissman, co-president of Public Citizen, a liberal consumer rights and government reform group, to testify.
Weissman said there was no evidence to support many of the claims of fraud made by his fellow witnesses and GOP members of the committee.
“It is unhelpful to make claims in Minnesota or anywhere else based on exaggerated numbers or shaky evidence,” he said.
Weissman also testified about allegations of fraud committed by President Donald Trump.
He cited Trump’s deal with the United Arab Emirates, Saudi Arabia and Qatar that benefited the president’s companies and the businesses of his children, the firing of inspector generals and the president’s pardoning of fraudsters, among other things.
“The president and his administration are shattering conflict of interest standards and ethical norms, creating a culture of impunity, at least for those in the good graces of the administration,” Weissman said. “This is not an administration determined to root out fraud.
That irritated Cruz.
“I get it, you dislike Trump,” Cruz said to Weissman. “Would you agree the fraud in Minnesota was staggering and shocking?”
“I agree there is fraud in Minnesota,” Weissman responded. “I don’t believe these estimates are grounded in any evidence I’ve seen.”
Cruz also said Walz, Minnesota Attorney General Keith Ellison, Minneapolis Mayor Jacob Frey and Tikki Brown, commissioner of the Department of Children, Youth and Families, were asked to testify before the Judiciary Committee, but all declined. Cruz accused them of being “terrified to answer questions.”
Sen. Sheldon Whitehouse, D-R.I., shot back that the chaos provoked by the Trump administration’s immigration crackdown in Minnesota “may be the explanation of why elected officials in Minnesota have something better to do today.”
Walz and Ellison have agreed to appear before the House Oversight and Government Reform Committee on March 4.
Trump’s allies in Congress are not the only ones trying to investigate fraud in the state for the administration.
In a press conference on Wednesday, during which he announced the withdrawal of 700 federal immigration enforcement agents from Minnesota, border czar Tom Homan said “we’ve got special agents on detail here doing the fraud investigation.”
“They’re not going anywhere,” he said. “They’re going to finish their job.”
Related: GOP’s Kristin Robbins says her Minnesota fraud prevention committee is not a political stunt. Is she right?
An effort to unfreeze $2 billion
In another fraud-related matter, Minnesota Medicaid Direct John Connolly announced at a press conference this week that the state is implementing new policies aimed at combating fraud.
Connolly also said he’s appealed a hold on $2 billion in federal money for 14 “high-risk” programs funded through Medicaid to the Centers for Medicaid and Medicare Services (CMS.)
Connolly said more than 5,800 Medicaid providers in those high-risk programs will be revalidated by the end of May. That revalidation includes reviews of documents and background checks and a pause in the enrollment of new providers.
The Minnesota Department of Human Services will also conduct unannounced onsite visits to providers, Connolly said, and 168 state employees will be deployed in that effort.
Connolly said the federal government gives Minnesota $10 billion to $11 billion every year to run Medicaid, a joint federal-state program. So, the freeze has impacted about 20% of the money the state receives for Medicaid.
Connolly said the state had submitted to CMS a corrective program and other information on Dec. 31, a deadline set by the federal agency.
He said CMS gave Minnesota a new deadline, Jan. 30, to revise its corrective program and submit an appeal of the funding freeze.
In other news:
▪️ Greater Minnesota reporter Brian Arola wrote about the dozens of earmarks, or special projects, that were funded in a package of appropriations bills this week.
▪️ While Congress has voted to fund most of the federal government through Sept. 30, one big agency, the Department of Homeland Security, has short-term funding and could shut down if lawmakers don’t come to an agreement soon on reforms to ICE and the Border Patrol.
▪️ Sheriffs across the state are seeking to work with border czar Tom Homan to find ways to cooperate with immigration enforcement, but one idea has been nixed by county attorneys.
▪️ Reporters Cleo Krejci and Matthew Blake wrote that as the state’s legislative session nears, Minnesota DFLers are considering laws to rein in ICE that are similar to ones that passed in other “blue” states.
This and that
A reader wrote that a story about President Donald Trump’s accusations of fraud against Rep. Ilhan Omar, D-5th District, lacked important background.
“This story needs to be considered in context,” the reader said. “It has been widely reported that Trump has gained more than a billion in wealth during his first term in office by influence peddling. Most recently the $75 million gift from Jeff Bezos in the form of a movie about the First Lady.”
Please keep your comments, and any questions, coming. I’ll try my best to respond. Please contact me at aradelat@minnpost.com.
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