A political earthquake is shaking Minnesota as new revelations emerge in what federal prosecutors are calling the largest COVID-19 fraud scheme in America’s history. Now the House Oversight Committee has opened a full investigation into Gov. Tim Walz’s role — and Republicans say the corruption uncovered so far is only the beginning.
Minnesota House Speaker Lisa Demuth, a rising conservative leader challenging Walz in 2026, told Fox News Digital that the fraud “exploded” under the Democrat governor’s leadership and that taxpayers may be looking at far more than the nearly $1 billion already discovered.
“This is just the tip of the iceberg,” Demuth said. “Gov. Walz is responsible. This happened under his administration, and the failures in oversight fall squarely on his shoulders.”
A Stunning Breakdown in Oversight Under Walz
According to federal prosecutors, approximately $300 million in taxpayer money meant to feed low-income children during the pandemic was siphoned off by a Minnesota nonprofit and its associates. Luxury cars, overseas properties, and personal enrichment replaced the intended aid for families.
So far, 78 individuals have been charged, making this the largest pandemic relief fraud scandal in the nation.
Demuth said concerns about fraud in state childcare and nutrition programs were already on the radar years before COVID-19, but Walz’s administration failed to act.
“This has been building for a long time,” she said. “The lack of accountability in state agencies is shocking. If oversight existed at all, it clearly wasn’t enough.”
Comer: Walz’s Negligence Allowed Criminals to Thrive
House Oversight Chairman James Comer, R-Ky., is leading the investigation and issued a sharp warning about the governor’s failures.
Comer argued that Gov. Walz’s lack of oversight allowed criminals — even individuals with known Somali terrorist ties — to siphon off nearly a billion dollars while vulnerable children were left without the help the program was meant to provide.
Demuth argued that political fear and identity politics played a role in Walz refusing to confront growing fraud.
“To look the other way because you’re afraid of how the media might react is not leadership,” she said. “Fraud is fraud — no matter who commits it.”
Walz Deflects — But Republicans Aren’t Buying It
During an interview on NBC’s Meet the Press, Walz insisted he takes “responsibility,” but he also blamed the state’s success for attracting criminals.
“Minnesota is prosperous and generous — that attracts criminals,” Walz said.
Demuth fired back immediately: “If Minnesota were truly well-run, criminals wouldn’t see it as an easy place to steal from. His explanation actually makes the problem sound worse.”
Demuth’s Plan: End the Culture of Fraud on Day One
Demuth says that if she wins the governorship, her administration will launch immediate, sweeping audits of every state agency. She vows to end what she calls the ‘culture of corruption’ embedded in Minnesota government.
Her plan includes establishing a fully independent Office of Inspector General with broad authority to investigate fraud before it drains taxpayer funds.
“We will stop fraud before it starts,” Demuth promises. “Minnesotans deserve a government that protects their tax dollars — not one that loses them to criminals.”