Good morning. This is the last Capitol View of 2025. We’ll be back on Jan. 5.

“Staggering, industrial-scale” fraud is how a prominent federal prosecutor is describing the scope of potential Medicaid ripoffs fueling a new set of criminal charges. Assistant U.S. Attorney Joe Thompson detailed the indictments yesterday at a news conference in Minneapolis that was more notable for the sweeping scope he put on potential fraud dogging a roster of Medicaid programs in Minnesota. While neither the new charges nor Thompson offered documentation behind his estimate, Thompson said a majority of the $18 billion paid out since 2018 could eventually be tagged as fraud. Matt Sepic reports that some of it involves kickbacks to get people enrolled in programs and then not provide services; other instances are described as “fraud tourism,” where out-of-state defendants set up shop here simply to fleece taxpayers. Thompson said fraud is “swamping Minnesota and calling into question everything we know about our state.” 

Gov. Tim Walz and Attorney General Keith Ellison issued statements in support of the prosecutions and said their teams are in sync with the feds in stopping the at-risk programs. But neither spoke about the estimate of billions of dollars in fraud that will be etched into the narrative for the campaign year to come. Thompson did downplay one allegation popular on the political right: That the pilfered money was routed directly to terrorism abroad. He said there was no indication money was sent to support terrorism, calling it nuanced and saying that money sent via transfer to East Africa could be taxed by bad actors.

Republicans seized on the new development as another sign of failure by Gov. Tim Walz and his administration.  House Speaker Lisa Demuth, a GOP candidate for governor, said the DFL administration “sat by and did nothing while the administration’s out of control fraud culture imported fraudsters from other states to steal taxpayer dollars instead of serving those in need.” Your continuing reminder that fraud — the scope of it and what’s been done to fight it — will be among the top, if not the top, issue in the 2026 governor’s race and others on the ballot. Legislators running for office could also see it as part of their campaigns. “Minnesota’s fraud problem is indeed Minnesota’s fraud problem. If people could easily defraud other states, they wouldn’t single out Minnesota,” said Republican Senate Minority Leader Mark Johnson.

Democrats are trying to go on offense in one area of the anti-fraud campaign. In a seemingly coordinated push, Walz and top DFL legislative leaders are alleging that Republicans are sitting on whistleblower complaints and other elements of the fraud investigation to release it for maximum political impact. It was raised this week during a hearing of the House Fraud Prevention and State Agency Oversight Committee. The panel’s chair, Rep. Kristin Robbins, said a lack of trust has led Republicans on the committee to keep a close hold on the tips that are coming in. She said, according to KSTP’s report on the hearing, that some of those tips are being forwarded to federal investigators. Walz said that approach is hindering efforts to halt payments or make other programmatic changes that would stop fraudsters in their tracks. “If there is fraud, it needs to be investigated immediately — not sat on, redirected or used for political theater,” the governor said in a news release yesterday. House and Senate DFL leaders issued similar statements yesterday.

On the flip side, efforts to stamp out fraud are also coming under criticism for their broad sweep and sometimes dangerous consequences. Lawmakers heard this week from disability advocates about legitimate service providers being hamstrung. They also heard about the death of a man in a residential facility that went undiscovered for days. The man was found in a St. Paul apartment on Monday after neighbors reported a foul smell. He was part of a Medicaid-funded program to assist adults with disabilities who live independently. Zahnia Harut, board chair of the Residential Providers Association of Minnesota, said it was “so inhumane” that the man was left alone so long without someone looking in on him. She and other advocates criticized the Department of Human Services for suspending some payments as they try to examine programs at risk of fraud. The Star Tribune’s Jessie Van Berkel shed light on the case and the broader struggle industry providers face right now. DHS told her the death is upsetting but also said even with the payment stop “providers have responsibilities to the individuals that they are providing care for.”

The news of the day made it hard for other things to break through, but yesterday also marked the political reemergence of David Hann. The former GOP state chair and former state senator declared his candidacy for U.S. Senate. Peter Cox and Dana Ferguson note how his entrance might not be the final one among Republicans hoping to turn Minnesota’s Senate campaign into a competitive one. The seat is open due to the retirement of Democratic Sen. Tina Smith. Republicans are playing catchup in fundraising and put the race on a national map where their party has other pickup opportunities and defensive concerns that are higher on the list. Hann said his political experience is an asset in the GOP field and he aligned himself with President Donald Trump on immigration enforcement, lower taxation and reduced business regulation. “I'm going to go to Washington to work with the president, work with his administration, and try to make sure that Minnesota can make progress and not just be obstructionist to the president,” he told MPR News.

Rolling Stone reporter Stephen Rodrick had an extensive feature yesterday on the late Melissa Hortman’s political legacy, including some of the first interviews with her family since her June assassination.  He goes through a lot of the pivotal scenes in Hortman’s life, from her upbringing in Blaine to meeting her husband Mark Hortman, joining the Legislature, climbing the ranks and presiding over a history-making session in 2023. Sophie and Colin Hortman, the son and daughter of Mark and Melissa, share how they’re coping with the trauma of losing their parents, saying they’re in an “okay place.” They say they still see signs of their mother in butterflies or hear her in ABBA lyrics. They, along with their grandparents, Gov. Tim Walz and legislative colleagues of Hortman’s share some of their fondest memories, including some of their final ones before the Hortmans’ killings.