The fraud that has taken place in Minnesota is “morally repugnant,” Sen. Ted Cruz (R., Texas) said during his latest hearing, from his post as chair of the Senate’s Judiciary Subcommittee on Federal Courts, Oversight, Agency Action, and Federal Rights.
During his latest hearing, entitled “Somali Scammers: Fighting Fraud in Minnesota and Beyond,” Cruz featured David Hoch, the journalistic partner of Nick Shirley.
“There are few crimes more morally repugnant than stealing from vulnerable children,” Cruz said during the hearing. “Every dollar stolen is a meal not eaten, a doctor’s visit missed, and a future diminished. Child welfare fraud plunders our children’s potential and erodes our nation’s future. And disturbingly, at the start of this new year, America has learned that this kind of looting was not occurring in some distant or lawless place, but in the heart of America’s Midwest.”
Reports of fraud in Minnesota exploded when Shirley and Hoch posted videos outside of buildings, like the infamously-named “Quality Learing Center,” that have received millions of dollars of taxpayer funds.
“Federal prosecutors in Minnesota now estimate that half or more of the $18 billion spent since 2018 across 14 Minnesota welfare programs may have been lost to fraud,” Cruz continued. This amount would represent one of the “largest welfare frauds in American history.”
While Republicans in Minnesota — like Senate hopeful Michele Tafoya, who highlighted the state’s historic fraud levels in an interview with the Washington Reporter — and across the nation have honed in on the fraud presided over by Gov. Tim Walz (D., Minn.) and his lieutenant governor Peggy Flanagan, who is now running for Senate, Cruz said that “Minnesota Democrats didn’t just fail to stop the fraud. They made it easy and profitable, and in a totally lawless fashion, silenced anyone who pointed it out.”
“In Minnesota, a welfare system designed to uplift the most vulnerable children was treated like an open ATM, exploiting both taxpayers and the public trust extended to immigrant communities,” Cruz said. “The record shows that the fraud was not accidental or unforeseeable, but was the product of deliberate inaction, willful blindness, and calculated abuse.”
Hoch, a Minneapolis native, seconded Cruz’s remarks during his testimony to the committee. The fraud, both Hoch and Cruz said, has been going on for years. “We got here because of politicians,” Hoch said. “Almost exclusively Democrats. A couple of names come immediately to mind: Jodi Harpstead, the former commissioner of the Minnesota Department of Human Services and Shireen Gandhi, the current commissioner of the Minnesota Department of Human Services. Harpstead put this whole fraud on steroids. She was steering the ship from 2019-2025, during the COVID-19 pandemic; this is when this whole fraud network exploded into what we see nationally today. Now we hear that the Minnesota Department of Human Services is forging documents and back-dating paperwork, all in an effort to cover up their complicity in this fraud.”
Cruz has three goals for the hearing: to expose “how that Minnesota was clearly warned by journalists, by auditors, and by its own independent oversight bodies, and that the state responded by passing laws and promulgating safeguards intending to stop this abuse”; to “examine how Minnesota’s Democrat leadership deliberately turned a blind eye, failed to enforce those safeguards, and in some cases, retaliated against those who tried to sound the alarm”; and to “explain how the fraud actually took place, the mechanics by which these schemes operated, and the very real harms they inflicted, not only on taxpayers, but on vulnerable children and on law-abiding Somali families whose trust and identities were exploited.”
Tafoya, a former journalist, told the Reporter that she attributes Walz’s decision not to run for a third term as governor to the “historic fraud” in Minnesota. “It’s finally gotten home to him that he owns it,” she said. “People can see the writing on the wall. Minnesotans aren’t blind. They’re not stupid. They see what’s going on, and now is the prime time for change.”
Cruz said that Minnesota’s failures stretch back years; he also explained how the fraud could also be linked to terror financing.
“In 2023, the Somali diaspora sent nearly $2 billion back to Somalia,” he said. “Once they’re sent overseas, they’re effectively unrecoverable. Meanwhile, Al-Shabaab
, the U.S.-designated foreign terrorist organization and al-Qaeda’s affiliate in Somalia, controls large swaths of territory and systematically extorts money moving through its financial channels. When billions of dollars are stolen from U.S. welfare programs and sent abroad, there is no credible way to ensure those funds do not enrich jihadists within Al-Shabaab. As one confidential source told the Manhattan Institute, the largest funder of Al Shabaab, an Islamist terrorist organization in Somalia, is the Minnesota taxpayer.”
