Walz unveils anti-fraud plan; GOP urges independent watchdog

By Elyse Apel
The Center Square

Fraud investigations in Minnesota are heating up as state Republicans push for stricter oversight and accountability measures.

As part of that effort, they are highlighting the need for a statewide independent Office of the Inspector General.

State Senator Michael Kreun, R-Blaine, helped sponsor the legislation to form that office and has been a staunch advocate for it.

“An independent statewide Office of the Inspector General is essential to provide nonpartisan oversight, promoting transparency and accountability by investigating fraud, waste, abuse, and mismanagement across government agencies,” Kreun told The Center Square in an interview. “Operating independently ensures that audits are objective, free from political interference, and focused on protecting taxpayer funds and upholding ethics.”

The office would have broad authority to investigate all providers, recipients, and agencies. Similar legislation was proposed last year but died without Democrat support.

Democrats say they are serious about addressing fraud though. On Thursday, Gov. Tim Walz announced his own “comprehensive anti-fraud package.”

“You can trust me on this. The person who’s angriest about this fraud is me,” Walz said during a press conference.

Yet, the Democrat also expressed doubt about fraud in Minnesota and concern with President Donald Trump and his recent announcement that his administration is declaring a “war on fraud.”

“They used false pretense to come in on Metro Surge and we saw the catastrophic damage that was done and the deaths,” Walz said. “Now we’re seeing them turn to this . . . they’re gonna freeze the money because of fraud. What specific fraud? What did you see that the state didn’t knew [sic]?”

Walz’ comments sparked backlash from Republicans, especially as Minnesota state officials are being accused of being complicit in the alleged fraud.

“While there is no current evidence that Governor Walz personally committed fraud, the evidence has shown that his administration looked the other way while the fraud was occurring,” Kreun said. “The Walz Administration ignored whistleblower warnings and failed to exercise proper oversight, which was a failure of leadership.”

This all comes as independent and federal investigations are ongoing after billions of dollars in taxpayer-funded fraud schemes were uncovered in recent months, as extensively reported by The Center Square, with claims the fraud could total between $9 billion and $20 billion in Minnesota alone.

Kreun said he is hopeful Democrats will support the effort this time.

“With the US Attorney’s Office estimating that our fraud problem may be in excess of $9 Billion, this is not the time to make this bill partisan. Even though the House Democrats killed the bill in 2025, I remain hopeful they will get on board and do the right thing this year,” he said. “In 2026, we should be past the discussion about if an OIG is necessary, and the focus should be on how to best structure it to be effective and truly independent.”

So far, that has not been the case. Democrats have been reluctant to support the bill and Republicans allege they are attempting to “gut it,” even when they have been supportive.

“Democrats have already voted against advancing the massively-bipartisan Office of Inspector General seven times,” said a joint statement from House Speaker Lisa Demuth, R-Cold Spring, and Republican Floor Leader Harry Niska, R-Ramsey. “Weeks into the legislative session and years late on fraud, they clearly aren’t serious about stopping fraudsters. It’s time for action, not more words and delays.”

Negotiations over how to mitigate fraud in Minnesota will likely continue to be tense in the divided legislature.

In the Minnesota State Senate, the Democratic-Farmer-Labor Party holds a slim majority by just one seat. DFL has 34 seats, compared to the Republicans’ 33. In the Minnesota State House, DFL and Republicans are tied – both holding exactly 67 seats.