Tim Walz’s $250M state program to feed hungry kids fraudulently spent on luxury goods, overseas real estate

Minnesota Gov. Tim Walz is facing renewed scrutiny for a $250 million COVID-19 fraud scandal in Minnesota that critics say falls on his shoulders as governor, particularly after he was tapped as a running mate for Kamala Harris on the 2024 Democratic ticket.

Between 2022 and 2024, 70 people have been charged in connection with the fraud scheme that resulted in a quarter-billion-dollar loss from the Minnesota Department of Education's (MDE) Feeding Our Future program — a federally funded meal assistance plan meant to help give free meals to eligible children and adults.

"At least a quarter billion dollars was stolen by fraudsters," Billy Glahn, adjunct policy fellow with Minnesota-based Center of the American Experiment, told Fox News Digital of the scandal.

"The question, of course, came up: How did the state Department of Education let out $250 million out the door to people who were later convicted of defrauding the program? The legislative auditor took this on as one of her projects and did this report looking at how the department oversaw a single one of these nonprofits involved."

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Democratic vice presidential candidate Minnesota Gov. Tim Walz speaks during a campaign event on Aug. 7, 2024, in Detroit, Michigan. (Andrew Harnik)

Glahn is referencing a report from the Minnesota Office of the Legislative Auditor (OLA), which frequently releases state government oversight reports.

The report about fraud scheme in question, titled "Minnesota Department of Education: Oversight of Feeding Our Future," was released in June. In it, legislative auditor Judy Randall concludes that although MDE officials told OLA they quickly identified and stopped the fraud, OLA believes they could have done more to prevent $250 million in stolen funds.

"MDE officials told us that the department began to have concerns about Feeding Our Future only after the start of the COVID-19 pandemic. However, we think MDE failed to act on warning signs known to the department prior to the onset of the COVID-19 pandemic and prior to the start of the alleged fraud," the report states. 

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It continues later on: "More broadly, the failures we highlight in this report are symptoms of a department that was ill-prepared to respond to the issues it encountered with Feeding Our Future."

Kamala Harris ended weeks of speculation about who her running mate would be, selecting the 60-year-old Midwestern governor over other candidates.  (Andrew Harnik/Getty Images)

Critics say this failure goes back to Walz's leadership as governor. "The buck has to stop somewhere," as Glahn put it.

"He is the chief executive of the state. All of the people at the Department of Education and the other departments where fraud has taken place were appointed by him," Glahn noted. "So he appoints the commissioner, the deputy commissioner, assistant commissioners. They were all appointed by him. They all report to him. And these are the folks whom the legislative auditor has documented failed to do their job. So where does the buck stop?"

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Glahn said Minnesota residents may be surprised that their state is not the well-oiled machine it once was. His response to the scandal, he said, is "much more cynical."

Minnesota Gov. Tim Walz speaks at a Biden-Harris campaign and DNC press conference on July 17, 2024, in Milwaukee, Wisconsin. (Jim Vondruska/Getty Images)

"It's been uncovered that a lot of these people who were indicted . . . and their spouses and immediate family members and business partners have given a lot of money to Democrats, to campaign contributions," Glahn noted. "So, they're campaign contributors. And then when these nonprofits were having trouble with Department of Education, the Department of Education shut off the money a couple of times and failed, or they didn't have the courage or convictions, and politicians went to bat for the nonprofits."

Glahn added that the scheme highlights the notion that "government is about beneficiaries and getting money out the door, not about policing and oversight and regulatory mindset and making sure that the people are eligible" for such benefits programs.

Fraud suspects spent the money on everything from residential property to vehicles, luxury goods, jewelry, cryptocurrency, hotels and restaurants, airplane tickets and more, 

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Walz's office did not immediately respond to an inquiry from Fox News Digital, but in a statement to local news outlet the Star Tribune, a spokesperson for the governor said, "We appreciate the OLA’s work and often agree with them, which is why state agencies have implemented many of their suggestions."

The spokesperson added that "[t]here are also times when the OLA’s suggestions don’t apply because the audits come out years after we’ve resolved an issue, they suggest actions that have already been taken, or they evaluate programs that no longer exist."

"Sometimes," the spokesperson continued, "state agencies have expertise and knowledge that the OLA does not, and in those cases we may fundamentally disagree," according to the Star Tribune.

The Republican candidate for Minnesota's 2nd Congressional District, Joe Teirab, said in a post on X that the fraud under Walz's watch has exceeded half-a-billion dollars.

"Imagine fraud at that scale nationwide."

— Joe Teirab

"Governor Walz and the people he directly hired and oversaw lost half a billion dollars to fraud in a few short years as governor. Imagine fraud at that scale nationwide," Teirab said. "If every state lost that much, the amount lost to fraud would be greater than the annual budgets of over 15 states."

In a follow-up post responding to an ABC story on the fraud scandal, Teirab said, "[i]t isn’t just the Feeding Our Future case."

"Over half a billion dollars has been lost by his Administration so far, with instances of waste and/or fraud in child care programs, the frontline worker bonus pay program, unemployment benefits, Medicaid programs, and more," he explained. "It’s not the fact that his Administration let fraudsters walk away with over $250 million meant to feed hungry kids. It’s the fact that that wasn’t a wake-up call, and that there still hasn’t been any accountability. Not one state employee has been fired for any of this."

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Critics of Walz's handling of taxpayer funds have also noted an $18 billion surplus in Walz's $72 billion budget that was initially supposed to be returned to taxpayers but was spent on other state initiatives instead. 

"We know that when there is tax relief offered for young families… as great as that sounds, and we are appreciative of that point, if Minnesota wasn't such an expensive place to live," House Minority Leader Lisa Demuth said in March. "In addition to that $18 billion of surplus that is now gone, taxes and fees – our state budget – was raised by another $10 billion. We grew government in a way that is unsustainable."