GOP attacks Minnesota governor in $250M food fraud case

ST. PAUL, Minn. (AP) — Republicans attacked Democratic Gov. Tim Walz on Monday after a judge took the rare step of disputing the administration’s claim that the judge prevented it from cutting off payments to Feeding Our Future, which is the target of a $250 million federal fraud case.

The GOP candidates for governor, attorney general and state auditor — Scott Jensen, Jim Schultz and Ryan Wilson — said Walz and other top Democrats should have done more to stop the alleged fraud before it became what federal prosecutors last week called the largest pandemic-related fraud in the country.

But the warring political sides disagree on how far Ramsey County District Judge John Guthmann went toward compelling the Minnesota Department of Education to resume payments to Feeding Our Future. A court statement issued late Friday said the judge “never issued an order” for the state to resume payments, but the department produced a hearing transcript showing the judge threatened to hold one attorney in contempt if the state failed to restore the flow of funds.

The Republican candidates largely accepted the judge’s version of events. Jensen called for an independent investigation to report back before he and Walz hold their next debate Oct. 18.

“What did Governor Walz know? When did he learn what he knew? When did he decide to use a district court judge as a scapegoat for his administration and the Department of Education? ... Who is he trying to protect?” Jensen asked at a news conference.

The Walz administration defended itself against the GOP allegations, which raise a new issue in a campaign that has been dominated by abortion, crime and the economy.

“MDE blew the whistle on this fraud scheme. They detected it early and worked diligently to stop it,” the governor’s office said in a statement. “MDE repeatedly urged the federal government to investigate and they partnered with the FBI to ensure accountability — even as they fought Feeding Our Future’s sham lawsuit in court.”

Democratic Attorney General Keith Ellison’s office issued a statement saying it had been “deeply involved for two years in holding Feeding Our Future accountable.” It said the attorney general’s office worked closely with the education department as it shared its suspicions and evidence with the FBI.

“Without the Attorney General’s involvement alongside MDE in flagging that fraud and turning it over to the criminal investigative power of the federal government, there would likely have been no federal investigation or indictments,” the statement said. “The FBI has praised this cooperation.”

Forty-nine people have been charged in the alleged scheme to exploit the COVID-19 pandemic and steal $250 million from federal programs designed to provide low-income children with nutritious meals. The newest defendant was scheduled to leave the U.S. for Turkey but was arrested Monday by the FBI at Chicago’s O’Hare International Airport.

Many of the defendants are accused of creating companies that falsely claimed to be offering food to tens of thousands of children across Minnesota, then seeking reimbursement for those meals through the U.S. Department of Agriculture’s nutrition programs, which are administered in Minnesota by the state Department of Education. Prosecutors said the defendants used the money to buy luxury cars, property and jewelry.

Walz said Thursday that the Minnesota Department of Education’s hands were tied by a court order for it to resume food program payments, despite concerns the state had raised. And he said the FBI asked the state to continue the reimbursements while its investigation continued.

Jensen expressed skepticism that the FBI would have instructed the state to continue to make millions of dollars in fraudulent payments, and called on the agency to clarify.

Cyndi Barrington, a spokeswoman for the FBI’s Minneapolis field office, said the bureau does not comment on ongoing investigations.

Guthmann took the unusual step of pushing back late Friday. The state court system issued a statement with his authorization that said he never ordered the education department to resume payments to Feeding Our Future.

But the Minnesota Department of Education insisted late Friday that the judge left it no choice.

“The court made it clear that if MDE were to continue the legal fight to withhold payments, MDE would incur sanctions and legal penalties,” the department said in a statement.

The department also circulated a transcript of a hearing before Guthmann last year in which he said the department had failed to meet the legal tests necessary to halt the payments.

The leader of the Republican majority in the Minnesota Senate, Jeremy Miller, of Winona, on Monday echoed Jensen’s call for Education Commissioner Heather Mueller to resign.

“Based on Judge Guthmann’s statement, Governor Walz and Commissioner Mueller have been dishonest with the public about the legal proceedings and failed to protect taxpayer dollars from the biggest instance of COVID-related fraud in the country,” Miller said in a statement.

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Associated Press writer Amy Forliti contributed to this story.