MINNEAPOLIS — In a fiery critique that has amplified national attention on Minnesota's political landscape, White House Press Secretary Karoline Leavitt accused Governor Tim Walz of transforming the state into the 'land of 10,000 Somali schemes' amid a sprawling fraud scandal that reportedly played a key role in his decision to abandon his re-election bid. Leavitt's remarks, delivered during an appearance on Fox News's 'Jesse Watters Primetime' on Monday, came as federal and state investigators continue to unravel allegations of misused public funds in social services programs, particularly those involving nonprofit organizations and childcare centers.
The controversy centers on multiple fraud cases that have ensnared Minnesota's social welfare system, with accusations that taxpayer dollars intended for vulnerable communities were diverted or falsely claimed. According to state and federal probes, these schemes have led to the prosecution of nearly 100 defendants by the Department of Justice, with ongoing audits revealing potentially millions of dollars in improper payments. Republicans, including Leavitt, have pointed to the scandals as evidence of lax oversight under Walz's Democratic administration, which has governed the state since 2019.
Leavitt did not hold back in her assessment, stating, 'President Trump has been calling out Tim Walz for his incompetence and corrupt leadership for a very long time, and Trump was right about everything.' She continued, 'A state that was once known as the land of 10,000 lakes has been turned into the land of 10,000 Somali schemes because of their governor.' The phrase 'Somali schemes' appears to reference reports that some of the implicated nonprofits were operated by or served Somali-American communities in the Minneapolis area, a demographic that has grown significantly in recent decades due to refugee resettlement programs.
The scandals gained widespread visibility through a viral video produced by independent journalist Nick Shirley, which purportedly showed several daycare centers in Minnesota that were shuttered or non-operational yet had received millions in government funding for childcare services. One focal point was the Quality Learning Center in the Twin Cities, accused of being part of a broader network bilking the state's child care assistance programs. Federal investigators, as Leavitt noted, have ramped up efforts, with her warning that 'people will be in handcuffs' as the probes deepen.
Leavitt emphasized the scale of the issue during her interview, saying, 'The scale of the fraud that the Trump administration, with the help of great independent journalists like Nick Shirley, is uncovering right now, is surely shocking.' She described the response as 'an all-hands-on-deck, across-the-entire-government effort,' highlighting the involvement of the Department of Justice alongside state agencies. This federal scrutiny has already resulted in convictions, with prosecutors targeting organizations accused of submitting false claims for services never rendered or inflating expenses to siphon funds.
Background on the fraud dates back several years, with initial red flags raised during the COVID-19 pandemic when federal relief funds flooded state programs. Minnesota's Department of Human Services, responsible for administering Medicaid and child care subsidies, faced criticism for inadequate vetting of providers. A third-party audit ordered by Walz in recent months examined Medicaid billing practices, leading to paused payments for certain high-risk services while investigators comb through records.
Governor Walz, a Democrat who served as vice presidential nominee alongside Kamala Harris in the 2024 election cycle, announced last week that he would not seek a third term, citing personal reasons but amid mounting pressure from the scandals. In public statements, Walz has taken a measured approach, acknowledging the problems without accepting full blame. 'This is on my watch,' he said in a recent address, adding that he is 'accountable' for addressing the issues. His administration has disputed some federal estimates on the fraud's magnitude, arguing that while wrongdoing exists, the overall impact on the state's budget is contained.
A spokesperson for the governor pushed back against the partisan attacks, releasing a statement that read, 'The governor has worked for years to crack down on fraud and asked the state legislature for more authority to take aggressive action. He has strengthened oversight.' This includes legislative proposals in 2023 and 2024 aimed at enhancing verification processes for nonprofit reimbursements, though critics contend these measures came too late and lacked sufficient enforcement teeth.
The ripple effects of Minnesota's troubles have extended beyond state lines. In Texas, Governor Greg Abbott ordered a comprehensive fraud probe into the state's child care funding programs, explicitly citing the Minnesota scandals as a cautionary tale. Abbott's directive, issued last Friday, calls for audits of all licensed providers to prevent similar diversions of funds meant for low-income families. 'We will not allow Texas to become the next Minnesota,' Abbott said in a press release, underscoring the bipartisan concern over welfare program vulnerabilities.
At the heart of the Minnesota cases are allegations against a network of nonprofits, some with ties to the state's large Somali immigrant population, which numbers over 80,000 in the Minneapolis-St. Paul metro area. Investigators allege that operators created shell entities to claim subsidies for phantom childcare slots, with one case reportedly involving $250 million in questionable claims over three years. The FBI and IRS have joined the effort, executing search warrants at several locations in Hennepin County as recently as last month.
Community leaders in affected neighborhoods have expressed mixed reactions. While some Somali-American advocates decry the stigmatizing language used by critics like Leavitt, others have called for transparency to restore trust in public programs. Abdi Warsame, a Minneapolis City Council member and prominent Somali-American voice, stated in an interview with local media, 'Fraud hurts everyone, especially the families who rely on these services. We need accountability, not division.' His comments reflect a broader tension between addressing criminality and avoiding racial profiling in the investigations.
From a national perspective, the Minnesota saga has become fodder for political discourse, particularly as Republicans leverage it to question Democratic governance on social spending. Leavitt's appearance on 'Jesse Watters Primetime' was part of a broader White House strategy to highlight state-level failures under the previous administration, tying them to themes of fiscal responsibility. Meanwhile, Democratic allies of Walz argue that the fraud is not unique to Minnesota and stems from systemic flaws in federal funding formulas exacerbated by underfunding of oversight agencies.
As investigations proceed, the Department of Justice has indicated more indictments are forthcoming, potentially involving high-profile figures in the nonprofit sector. Walz's office has committed to cooperating fully, with plans for a legislative session in early 2025 to propose reforms like mandatory real-time data tracking for payments. The governor's decision to step aside opens the door for a crowded Democratic primary, where the fraud issue is likely to loom large.
The unfolding story in Minnesota serves as a stark reminder of the challenges in safeguarding public funds amid complex social service delivery. With billions allocated annually to programs like child care assistance—$1.2 billion in Minnesota alone last fiscal year—the stakes are high for preventing abuse without undermining access for those in need. As federal prosecutors close in, the state braces for revelations that could reshape its political and fiscal future.
Looking ahead, experts anticipate that the scandals could prompt wider reforms at the federal level, including stricter guidelines from the Department of Health and Human Services. For now, Minnesota residents await clarity on how deeply the rot extended and what measures will ensure it does not recur, all while the partisan blame game continues to intensify.