If it's a day ending in "Y", it seems like there's going to be another scandal in Minnesota.
Tuesday ended in "Y". I don't make the rules.
Reporting Lou Raguse, with the Twin Cities NBC affiliate, has been one of the few genuinely incisive, curious, dare we say journalistic journalists in the Minnesota mainstream media in terms of reporting on the miasma of scandal and corruption that's engulfed the state government. Tuesday, Reguse reported on a new set of findings from Minnesota's Office of the Legislature Auditor (OLA), with yet more damning revelations:
Explosive audit finds Minnesota state workers mismanaging money meant to treat addiction and mental health then fabricating documents to cover their tracks pic.twitter.com/ywHcwtJgsY
— Lou Raguse (@LouRaguse) January 6, 2026
From the Center of the American Experiment, whose writers (including Bill Glahn) have led literally everyone on this story:
The Office of the Legislative Auditor released a scathing audit of the grant making process at yet another Minnesota Human Services program, the Behavioral Health Administration (BHA). BHA is supposed to administer grants to provide prevention, treatment, and recovery services for individuals with mental health conditions or substance use disorders. They receive around $200 million of your tax money every year for this purpose. Auditors found nothing but problems with the way BHA was handing out the money. In fact, they told a legislative committee Tuesday that BHA “did not comply with most requirements we tested.”
The wrongdoing stars with a state Behavioral Health Administration employee approving a $600K grant, and then going to work for the grantee shortly afterward. The BHA didn't have the information it needed to ask any questions.
And it gets worse:
Second, the auditor said BHA staff were manipulating documentation during the audit, even backdating forms to fool the auditors!
This is a prime example of the culture problem in Minnesota state agencies identified before by Legislative Auditor Judy Randall. The employees are predisposed to hand out the money without considering proper financial controls. Tim Walz hasn’t shown the strength to change the culture in the state bureaucracy because most of the employees belong to a public employee union. And the public employee unions are some of the largest contributors to Democratic election campaigns.
The report cites a dizzying array of abuses that could add up to about $400 million in fraud.
Just as an aside - after this past few weeks, the amount of money proven or likely to have been pilfered is almost seeming like Monopoly money; $400 million almost seems like rookie numbers, after the Chrfistmastime revelations of at least $9 billion in Medicare/Medicaid fraud. Here's the report.
By the way - some have asked if the report may have had anything to do with Walz's departure from next year's governor's race. According to former state senator Sean Nienow, it's possible
Walz knew it was coming and what was in the report.
— Sean Nienow (@SNienow) January 7, 2026
The OLA ALWAYS gives a preliminary briefing to key players and/or those impacted.
That most certainly was a part of Walz' calculus.
Republican Speaker of the House and gubernatorial candidate Lisa Demuth responded to the report, perhaps by pouncing, or possibly by seizing on it:
Walz/Democrat Cover-Up
— Lisa Demuth (@LisaDemuthMN) January 6, 2026
This is a very serious finding by the Office of the Legislative Auditor. If true, consequences are necessary for anyone responsible, including those that conspired and turned a blind eye.
When I am governor, this practice will end. pic.twitter.com/gZI05Cw6UH
This report presumably fingers state employees, not Somali-run non-profits. This is important, because rumors around Minnesota's political water cooler say the DFL (Minnesotan for "Democrats") not only plan on running as "Fraud Busters", but on using the Somalis as scapegoats. Having the issue breach the containment of an ethnic group that has become unpopular in recent months might put a crimp in that plan.
