The White House is withholding $250m in Medicaid funds to Minnesota until the Democratic-led state government takes a series of as-yet unspecified “corrective actions” to prevent what Vice President JD Vance called an epidemic of fraud among the state’s Somali-American population.
”We don’t want to be in a situation where the state of Minnesota is being so careless with federal tax dollars that we have to turn the screws on them a little bit so that they take this fraud seriously,” Vance said during a press conference alongside Center for Medicare and Medicaid Services administrator Mehmet Oz on Wednesday.
“All we need is the governor and the administration in Minnesota to do is something quite simple, which is to show that before you give Medicaid funds to somebody, you’re taking seriously whether they provided the services that they say that they’re providing.”
Vance said the administration is demanding “some affirmative steps” to find out whether Medicaid providers are actually providing services to Medicaid recipients, while Oz told reporters that an “action plan” already submitted to CMS by Minnesota Governor Tim Walz’s administration was “inadequate.”
The administration’s push to cut off funds to Minnesota’s Medicaid program stems from right-wing media outrage over a viral video from anti-immigrant YouTuber Nick Shirley, who in December alleged that scores of immigrant-run medical services and childcare businesses in Minnesota are illegitimate and not delivering services to residents.
A Minnesota nonprofit, Feeding Our Future, was charged with submitting fraudulent documentation to obtain roughly $250m in Covid-19 pandemic aid during the Biden administration.
Federal prosecutors have also alleged that at least half more of the roughly $18 billion in federal funds that supported 14 Minnesota-run programs since 2018 may have been stolen from federal programs supporting child nutrition, housing services and autism services.
The sprawling case has also become politically and culturally fraught, as Somali Americans make up 82 of the 92 defendants charged so far, according to the U.S. Attorney’s Office for Minnesota.
President Donald Trump has capitalized on that fact to target the Somalia diaspora in Minnesota, which has the largest Somali population in the U.S., as well as the state’s Democratic leadership. Local community leaders have urged officials and the public not to stigmatize Somali Americans in the state, warning against conflating alleged crimes by a handful of defendants with more than 80,000 people of Somali descent in the Twin Cities.
The Minnesota cases are unfolding against a broader backdrop of federal concern about fraud across government programs, especially since the COVID-19 pandemic, when there was “unprecedented fraud,” Shea said.
Based on data from 2018 through 2022, GAO estimated that the U.S. government loses between $233 billion and $521 billion each year, roughly 3% to 7% of the federal budget, to fraudulent activity. In their report, GAO investigators said “no reliable estimates of fraud losses affecting the federal government previously existed.”
Trump has continued to target the Somalian diaspora in Minnesota with immigration enforcement actions and has made a series of disparaging comments about the community. He has said the state is “a hub of fraudulent money laundering activity,” though there has been little evidence to support that claim.
During his State of the Union address on Tuesday, the president specifically accused the Gopher State’s Somali-American of “pillaging … an estimated $19 billion from the American taxpayer” as he announced what he called a “war on fraud” run by Vance.
He used the fraud accusations to bootstrap an racist rant in which he accused “Somali pirates” of having “ransacked Minnesota” and called them a reminder of how “there are large parts of the world where lawlessness are the norm, not the exception.”
“Importing these cultures through unrestricted immigration and open borders brings those problems right here to the USA, and it is the American people who pay the price and higher medical bills, car insurance rates, rent, taxes and, perhaps most importantly, crime,” Trump said.
With additional reporting by agencies
