Editorial: Rampant fraud is undermining faith in government. Gov. Tim Walz was right to exit
Published in Op Eds
A little over a year after running on the Democratic Party’s national ticket, Gov. Tim Walz announced Monday he is dropping his bid for reelection as governor of Minnesota, saying the scope of the state’s brazen fraud problems involving its administration of benefit programs demands his full attention as governor.
That was the right decision, and we admire Walz’s choice to hold himself accountable.
While he has not conceded wrongdoing, the unfolding investigations have called into question his administration’s ability to oversee the distribution of federal cash to Minnesotans in need. There was little reason to entrust him with another term after such a massive failure.
The fraud involving the Minnesota nonprofit known as Feeding Our Future (a group that claimed to disburse child nutrition support funds but actually stole most of the cash) has resulted in 78 indictments and 57 convictions so far, costing taxpayers $250 million or more.
That figure is dwarfed by the scale of the Gopher State’s Medicaid fraud scandal. As much as half of the roughly $18 billion in federal funding that supported 14 Minnesota-run programs since 2018 may have been lost to fraud, a federal prosecutor said last month.
These are the types of stories cited by many on the political right as evidence that the nation’s welfare programs are out of control and exorbitant. For those on the political left who typically are far more supportive of social-net spending, Minnesota is a political nightmare and some have circled the wagons in defense. Wiser heads, though, can see that the fraud also robbed funds from those who needed them the most and that rooting out fraud should not be a partisan issue.
The scale of the scandal in Minnesota can’t be dismissed as a few bad apples. It exposes just how fallible big government can get. In this case, the extent of taxpayer waste is unconscionable. “What are we even paying taxes for?” comedian Theo Von posted on X.
This problem, of course, doesn’t end with Walz and Minnesota. Stories of fraudulent acts continue to emerge from other parts of the country, including Ohio and Mississippi. Democrats may be more enthusiastic supporters of Medicaid than Republicans as a general matter, but residents of red states rely on these programs every bit as much as those in blue states. And fraudsters have been running rampant all over the country.
Here in Illinois, the Tribune reported that hundreds of government workers improperly obtained millions in Paycheck Protection Program money. According to the Illinois Office of the Executive Inspector General, more than 200 state employees have been fired or resigned, some face criminal prosecution, and over $2.8 million in taxpayer-funded loans went to workers across multiple agencies. As of June 30, the OEIG had found “reasonable cause” of wrongdoing in 378 cases, concluding that many state employees obtained PPP loans using falsified information.
Chicago Inspector General Deborah Witzburg is also looking into the issue, initially identifying nearly 1,000 potentially improper PPP loans involving city employees. We’re glad to see Witzburg’s focus on this upsetting problem, though we bemoan her publicly saying she was prioritizing cases involving employees of the Chicago Police Department over other city departments and reporting only nine cases (so far), according to Tribune reporting.
Nine is but a tiny percentage of initial 1,000, leading to the impression that many fraudulent city employees are likely to escape scrutiny. Yes, we understand resources are limited, but this problem deserves watchdogs’ full attention and we’d like to know more about the other 991 loans initially identified.
One need only look north to Minnesota, where cops do not seem to have been the problem, to see why. And, frankly, it’s hardly fair for state employees to be subject to greater scrutiny than their civilian counterparts at the city.
PPP abuse isn’t the only problem. In November, Illinois Attorney General Kwame Raoul charged a physician who allegedly billed Medicaid and Medicare for more than $1 million in services he did not personally provide.
Even before the Minnesota story broke, the Ohio attorney general had been investigating Medicaid abuse cases, indicting multiple providers for alleged fraudulent activity. The good news for Ohioans is that their state has a Medicaid Fraud Control Unit that works with state and federal partners to target fraud, waste and abuse in its health care system. We imagine this unit will have its hands full in the coming months.
As it becomes clear that our massive social safety net is extremely vulnerable to abuse by bad actors, it’s fair to put these systems under a microscope to ensure they’re working as intended. It’s hard to see, after doing that, how spending wouldn’t go down, given how much money has been siphoned off by fraud.
Public trust is hard to build and easy to lose, and the mess in Minnesota that has undermined Walz’s reputation shows what happens when oversight failures are allowed to fester until they explode into scandal. It behooves our elected leaders to beef up oversight operations, and governors must become proactive on this issue.
Instead of waiting for your political opponents to attack, why not get ahead of the story and ferret out waste, fraud and abuse on behalf of your constituents?
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