A new congressional report is putting Minnesota’s government under an intense spotlight, alleging that senior state officials not only failed to stop widespread fraud but actively worked to intimidate employees who tried to expose it.
The 200-page report from the House Committee on Oversight and Government Reform paints a troubling picture of how whistleblowers were allegedly treated under the administration of Democratic Gov. Tim Walz. Titled “The Cost of Doing Nothing: How Tim Walz and Keith Ellison Fueled Minnesota’s Fraud Explosion,” the report claims state leaders were aware of significant fraud problems for years while discouraging employees from pursuing investigations.
Among the most serious allegations are claims that state agencies hired outside investigators to gather personal information on whistleblowers, including photographing their homes and vehicles, monitoring communications, and even asking questions about where their children attended school.
According to the report, one Minnesota Department of Education official who eventually contacted the FBI said she encountered resistance at every stage of her efforts to investigate suspected fraud.
The employee reportedly told federal investigators that she was pressured by supervisors to stop pursuing concerns and was repeatedly warned against digging deeper. According to the report, administrators cautioned that continuing investigations could make it appear that she was “targeting certain groups.”
The report also cites testimony from numerous employees within Minnesota’s Department of Human Services who claimed they were discouraged from raising fraud concerns out of fear they would be labeled “racist” or “Islamophobic.”
Several whistleblowers described what they viewed as retaliation after speaking up.
Here’s an insider tip on how DHS operates. If you detect fraud, 2 things could happen: 1. You will have arbitrary investigations started on you until you quit. DHS investigators will photograph your car, house, monitor your phone and computer and ask which school your kids go to.…
— Minnesota Staff Fraud Reporting Commentary (@Minnesota_DHS) September 18, 2025
According to the report, employees alleged that the Department of Human Services conducted what they described as arbitrary investigations into their personal lives. Some claimed agency officials monitored phones and computers, collected information about family members, and attempted to identify those reporting fraud through supposedly anonymous channels.
Former Temporary DHS Commissioner Shireen Gandhi acknowledged in testimony cited by the committee that outside entities were used to conduct employee investigations, though she said she could not confirm whether independent law firms were involved.
Gandhi also acknowledged that agency leadership regularly conducted follow-up meetings regarding employees who had reported concerns.
One whistleblower, DHS employee Faye Bernstein, alleged that after raising fraud concerns she was publicly shamed during meetings and subsequently excluded from discussions related to the issue.
Another allegation centers on a division-wide meeting reportedly conducted by former DHS Commissioner Jodi Harpstead, during which employees were allegedly warned they could face punishment for reporting fraud concerns within the department.
The report further alleges that an internal anonymous fraud hotline was effectively stripped of its anonymity. According to whistleblowers, reports submitted through the system were eventually routed to Human Resources and used against employees who raised concerns.
When whistleblowers later created an external anonymous email account to continue reporting suspected fraud, the report claims DHS blocked the address.
The committee also highlighted an email involving DHS employee Emmanuel Nwala, who reportedly referenced his military intelligence experience and appeared to suggest he could identify whistleblowers through internet-related data.
Gov. Walz reportedly told investigators he was unaware of the specific email but agreed that confronting employees with personal information would constitute intimidation.
The report arrives amid broader scrutiny of Minnesota’s handling of public funds. Oversight Committee Chairman James Comer launched a formal congressional investigation into alleged fraud within Minnesota programs in late 2025.
This DHS “manager” has been promoted to a “leadership” role. Emmanuel Nwala has threatened employees with military surveillance & made numerous staff uncomfortable with his intimidation & behavior. See the email that was obtained through a PUBLIC DATA REQUEST. #Menace #Disgusting pic.twitter.com/Z6yPGVZfyd
— Minnesota Staff Fraud Reporting Commentary (@Minnesota_DHS) November 10, 2023
According to Comer, committee investigators estimate that roughly $300 million in federal child nutrition funding and approximately $9 billion in Medicaid-related funding was either lost or exposed to serious risk.
Minnesota officials dispute suggestions that they ignored fraud concerns. The Minnesota Department of Education said the state has implemented significant reforms aimed at improving oversight and preventing abuse of taxpayer-funded programs.
“We care deeply about protecting Medicaid services for people who need them and stopping criminals stealing taxpayer dollars,” the agency said in a statement. “Minnesota has taken concrete, aggressive action to tighten oversight of Medicaid — changing practices and policies that were in place for decades.”
Still, the allegations contained in the committee report are likely to intensify political pressure on Walz and other state leaders.
