Governor Tim Walz Unveils Legislative Anti-Fraud Package

(KNSI) — Governor Tim Walz has unveiled a legislative package designed to combat fraud in Minnesota’s state programs.

In a press release, Walz says fraud “steals from the people of Minnesota and undermines the programs we all rely on. This package strengthens oversight, improves detection, expands enforcement, and increases penalties to protect every dollar Minnesotans depend on. We’ve followed the experts, audits, and proven roadmaps; now it’s time for the Legislature to act.”

He explained the package builds on steps taken in recent years, including the creation of the Bureau of Criminal Apprehension’s Financial Crimes and Fraud Section, the appointment of a statewide Director of Program Integrity, and executive orders giving state agencies more authority to fight fraud. It also includes recommendations from independent experts and Director Tim O’Malley’s program integrity roadmap.

The package would make it harder for fraud to go unnoticed by boosting audits, using data tools to catch suspicious billing earlier, tightening oversight of managed care organizations, and requiring open competition for grants rather than allowing the Legislature to hand-pick recipients.

The proposal also calls for establishing a centralized Office of Inspector General to lead statewide fraud prevention and refer cases for civil or criminal enforcement. It would expand the BCA Financial Crimes and Fraud Unit’s capacity and subpoena authority, add fraud prevention resources at the Department of Revenue and the Attorney General’s Medicaid Fraud Unit, and impose permanent bans from state contracts for individuals convicted of fraud.

A bill to create the OIG passed the Senate last session 60-7, but the House failed to vote on it. A similar bipartisan bill is being worked on in committee now.

The package would create a new Theft of Public Funds statute increasing penalties by 20% and extend statutes of limitations to seven years for certain fraud-related crimes.

The full anti-fraud package is available on the Governor’s website.

House Republican leadership called the announcement “indignation theater,” saying Democrats are “feeling the heat over the fraud they’ve enabled for years, and now they’re trying to do damage control.” Republicans say they have been blocked by House Democrats from acting on fraud prevention “seven times on the Office of Inspector General bill alone” and accused Walz of allowing fraud in state agencies “unchecked for his entire seven years in office.” The statement closed with a call for Walz and House Democrats to “join us in making real strides on fraud as soon as possible.”

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