Former Minnesota Governor Arne Carlson says he opposes efforts by Governor Tim Walz to create another layer of state government to investigate efforts to “steal public money” while suggesting there are already systems and personnel in place to prevent further efforts to financially defraud the state.
In a letter to State Representative Lisa Demuth, the highest-ranking elected Republican in the state and likely Speaker of the House when the legislature convenes on January 14, Carlson charged that state taxpayers have seen their money wasted as a “result of dishonesty and ineptitude” in the Walz administration.
Governor Walz has suggested the state’s current audit system is not working and has proposed an anti-fraud unit to protect the public’s money in the wake of the “Feeding Our Future” scandal which saw hundreds of millions of dollars diverted from the program.
Walz signed an executive order last week creating a new fraud investigations unit within the Bureau of Criminal Apprehension. The move will see fraud investigators with the state’s Department of Commerce moved to the BCA, resulting in a new group called the Fraud and Financial Crimes Unit. The governor’s office notes the plan is expected to have a net cost of approximately $54 million over the next four years.
Carlson charges that the Walz administration did not have a working environment to prevent the theft. “Clearly, that was absent here and now the Walz administration is attempting to absolve itself of responsibility,” Carlson wrote, adding that the Walz administration and the Governor lacked “common sense leadership and sound professional planning.”
“Another layer of government is not the answer,” Carlson wrote. “Accountability is not about adding more people and passing more laws. Rather, it is about leaders being alert and willing to act responsibly and swiftly in protecting the public interest and that includes the public’s money.”
Carlson added that as House Speaker, Representative Demuth has “the opportunity to expose incompetence, make certain that officials unworthy of the public’s trust are dismissed, and institute reforms that will restore the public’s confidence in government.”
Carlson served as Minnesota’s 37th governor from 1991 to 1999. While considered a liberal Republican, Carlson now identifies as a “moderate” Republican.
The letter was also signed by former Democratic Farmer Labor (DFL) representatives Tom Berkelman and Janet Entzel and Duke Skorich, president of Duluth-based Zenith Research Group.
Dear Representative Demuth,
We have been concerned for a number of years about the growing acceptance of dishonesty and mismanagement in our state government. Toward that end, we have written numerous commentaries that have been published around the state. In view of the multitude of scandals involving the theft of public money, we applaud your decision, as the likely Speaker of the House, to fully investigate the causes as well as the “reforms “ being advanced by Governor Walz.
Essentially, the Governor is suggesting that the current audit oversight system is not working and, therefore, another government entity is needed on top of those already assigned to that task including the Attorney General, the Legislative Auditor, and all the audit control systems within state agencies.
The rationale of the Walz administration relative to the need for another layer of oversight is because “sophisticated tools and technology are being used to steal public money.” (Minnesota Star Tribune, Jan 4, 2025).
That excuse totally contradicts the U.S. Attorney and the FBI who found in their investigations of the “Feeding Our Future” program that a very simple system was used to defraud the government: just submit inflated numbers for meals served and you will receive full payment. That is certainly not very complicated.
The simple reality is that good management anticipates problems and creates an environment to prevent them. Clearly, that was absent here and now the administration is attempting to absolve itself of responsibility by suggesting that these scandals occurred because the existing system is antiquated. If that is, in fact, the case, then why the lengthy delay in upgrading the talent and tools necessary to cope with this new technology? After all, Governor Walz has been in office for six years.
When the Federal Government declared it would be sending more than $2 billion to Minnesota State Government from the Coronavirus Relief Fund (CRF), Governor Walz had an obligation to immediately bring together the Legislative Auditor and the Attorney General for the purpose of reviewing the audit system that would be used to protect the integrity of this new spending. Certainly, the Governor must have been curious as to whether his Department of Education had the resources necessary to accept this new responsibility.
Why was this simple preventative measure not taken? What we all must keep in mind is that the Governor is the Chief Executive Officer of the largest management system in Minnesota and has the duty to fully protect the public’s money. Further, he has access to the professional staffs of the Legislative Auditor and Attorney General. They are highly competent and quite able to take the lead in providing the necessary oversight and in enforcing laws currently in place. What was missing was Governor Walz, common sense leadership, and sound professional planning.
Equally disturbing is that some state agencies who report to the Governor have been resistant to accepting and implementing audit findings and recommendations from the Legislative Auditor. This is alarming because it suggests an unacceptable level of indifference that potential fraudsters find very welcoming.
The Office of Legislative Auditor is not only highly skilled, but it is also free of partisan considerations and its recommendations must be taken seriously and, when there is disagreement, the Governor should be involved. Where was he?
Coincidentally, that simple question has received contradictory answers from the Governor and his staff. The Minnesota Star Tribune (June 3, 2024) wrote about “inadequate oversight” and “red flags” being ignored early on thereby making the issue of when Governor Walz first knew that something was amiss in the “Feeding Our Future” program a very legitimate concern.
Here are the facts:
In a revealing article by Michelle Griffith in the Minnesota Reformer (Sept.30, 2022), the headline raises a most vital question:
- “When Did Gov. Tim Walz Know About The Feeding Our Future Fraud?”. This headline was followed by a sub headline stating:
- “The Walz Administration Can’t Make Up Its Mind”.
Initially, the Governor acknowledged that he “was verbally briefed about suspicious activity in the program in late April or early May of 2020.” This is at approximately the same time that the scheme commenced according to Andrew Luger, the U.S. Attorney.
Then the Governor’s staff changed that to the “summer of 2020” and later to “November of 2020”.
In so many ways this clumsy attempt to avoid responsibility is at the heart of the scandal. Simply, the state’s top executive is trying to be absent.
Sadly, state taxpayers have seen their money wasted as a result of dishonesty and ineptitude in the administration of programs designed to serve people including Feeding Our Future, Medicaid, programs to help the autistic, another managed by the State Department of Labor and Industry involving assisting workers, as well as doing business with Glencore, one of the world’s most corrupt mining conglomerates.
No, another layer of government is not the answer. We would submit that the Legislature should commence a bi-partisan review of the scandals and the adequacy of the oversight. Hopefully, the Legislature would consider elevating the role of the Office of Legislative Auditor by having her present annually to both the Legislative Audit Commission and the Executive Council a public review of the adequacy of audit controls and resources throughout state government. The public must know that their taxes are appropriately managed and that public officials are awake and accountable.
This may not sound like an important step. However, many corporate boards, particularly in the mutual fund area, utilize this practice because it protects the independence of the auditor and makes everyone aware and responsible. In this case, legislators, all Constitutional Officers, the media, and the public are in the loop and, therefore, informed and responsible.
Accountability is not about adding more people and passing more laws. Rather, it is about leaders being alert and willing to act responsibly and swiftly in protecting the public interest and that includes the people’s money.
And the public can no longer avoid active involvement because the public selected the leaders and it is up to the public to hold them fully responsible regardless of party loyalty.
Perhaps President Harry Truman said it best with a sign he displayed on his desk:
THE BUCK STOPS HERE
As leader of the House of Representatives, you have the opportunity to expose incompetence, make certain that officials unworthy of the public’s trust are dismissed, and institute reforms that will restore the public’s confidence in government. We truly wish you the best in this endeavor.
Respectfully submitted,
Arne H. Carlson
Minnesota Governor – 1991 to 1997 – Retired
Minnesota State Auditor – 1979 – 1991
Tom Berkelman
DFL State Legislator – Retired
Janet Entzel
DFL State Legislator – Retired
Duke Skorich, President
Zenith Research Group, Inc.
