Gov. Tim Walz (D-MN) unveiled legislation on Thursday to root out fraud in Minnesota as the state faces pressure from the Trump administration over its social services programs.
Walz’s announcement comes one day after Vice President JD Vance, who is leading the so-called war on fraud, said the administration would pause $259.5 million in Medicaid funding to Minnesota. At a press conference with Vance, Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz gave Walz 60 days to respond.
The governor followed up with proposals for antifraud legislation that provide better detection and oversight, strengthen investigative and enforcement authority, and increase criminal penalties.
For instance, a proposed bill would raise penalties by 20% for anyone who steals public funds. Another bill would establish a centralized inspector general’s office to target public fraud, while a separate measure integrates technology into state systems to detect fraud earlier.
By unveiling the long list of proposals, Walz believes he is complying with the Trump administration’s demand that he deliver a comprehensive action plan for addressing rampant fraud in the blue state. But he did so while taking shots at the federal government.
“This is a targeted retribution against a state that the president doesn’t like,” Walz said. At one point, he claimed the Trump administration’s move to reduce scam rates is “absolutely not serious.”
“How does taking and punishing children and elderly have anything to do with fighting fraud when that’s not where this issue is taking place?” he asked.
As a result of the halted Medicaid funding, the Walz administration estimates more than 1.2 million Minnesota residents could be harmed.
Minnesota has faced intense federal scrutiny in the past few months on fraud and illegal immigration. The state was previously subject to a federal immigration operation, which has been significantly pared back following backlash over officer-involved shootings that killed two American citizens in Minneapolis.
In January, Walz announced he would no longer run for a third term as governor because he needed to focus on the fraud challenges his state faces instead of a reelection campaign. He criticized those who are trying to make fraud an “electoral issue” in the gubernatorial race.
TRUMP ADMINISTRATION HALTING SOME MEDICAID FUNDS TO MINNESOTA OVER FRAUD CONCERNS: VANCE
“We’re at a crossroads here in Minnesota. If you like talking about fraud and you think it’s an electoral issue for you, that’s gone. I’m not running. That’s gone,” the Democratic governor said. “If you’re serious about fighting fraud, you can help us work on this package, get this package passed.”
Walz will testify before the House oversight committee on March 4 about the misuse of federal funds in Minnesota’s social services programs. Minnesota Attorney General Keith Ellison will also be present as a witness during the hearing.
