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Walz calls for fraud review after Feeding Our Future accusations


A day of recriminations over the Feeding Our Future scandal ended Friday with Governor Tim Walz dropping a call for an investigation into the judge who presided over a lawsuit challenging the state’s handling of the nonprofit. at the center of a massive federal fraud case, while the judge says his conduct was misrepresented.

At issue is a 2021 lawsuit that led the Minnesota Department of Education to resume payments to Feeding Our Future, the nonprofit that federal prosecutors say was used to orchestrate a $250 scheme. million dollars aimed at defrauding the federal government of money intended to feed poor children.

Asked by a reporter whether the judge should resign, Walz said on Thursday he hoped “there would be an investigation into this.”

But on Friday, Walz said he was not calling for any investigation into Ramsey County District Judge John Guthmann. Instead, Walz said, he wants an examination of “how this fraud was allowed to continue, including the lies the defendants told in court.”

The Minnesota Department of Education (MDE), which oversees the federal nutrition program, said in January that a judge told the department “it has no authority to stop payment to Feeding Our Future and must continue to pay Feeding Our Future’s claims.”

A rare statement from the state judiciary, authorized by Guthmann on Friday, said Guthmann never ordered the department to resume payments, however. The statement said the Star Tribune, other news outlets and MDE officials mischaracterized him. The MDE has voluntarily resumed its payments, the statement said.

In response on Friday, MDE officials said, “Feeding Our Future demanded that MDE make payments, and the court made it clear that if MDE were to continue the legal fight to withhold payments, MDE would face penalties and legal penalties”.

A transcript of the April 2021 hearing shows Guthmann saying the MDE can “set additional terms, but you can only stop paying if those additional terms can’t…if the gaps can’t be corrected by imposing these additional conditions. You cannot impose the additional conditions and stop paying until you determine that these additional conditions will not work. You have put the cart before the horse.

MDE restarted payments and decided to work with federal investigators, leading to this week’s charges – the largest case of pandemic-related fraud in the nation.

MDE leaders acknowledged in a May interview with the Star Tribune that had they demanded numerous receipts and other documents, they might have been able to end the department’s relationship with Feeding Our Future sooner.

Republican lawmakers held hearings earlier this year, questioning MDE leaders and saying the agency should have detected and stopped the fraud sooner.

“Governor Walz and the Department of Education should have done more to stop the Feeding Our Future fraud scandal,” Republican Minority Leader Kurt Daudt said in a statement. “They did not appeal the court decision that allowed them [the] the scam continues and has not sounded the alarm to the media or the federal government who allowed these organizations to continue their scam and steal an additional $200 million from taxpayers. »

Walz defended the department on Thursday and said he and his team could not speak publicly about the case while the FBI investigates.

“So while the Senate Republicans were holding hearings and taking my commissioner away and threatening to fire her, she was under orders from the FBI,” he said. “The way the system works is to say nothing.”

Suspension of payments

Feeding Our Future sued the Department of Education in November 2020 after the department delayed action on claims from 51 meal sites, including nine that federal prosecutors say have now raised more than $50 million in fraudulent reimbursement payments.

Although for-profit sites were previously excluded from the program, the USDA changed the rules after the pandemic to allow children who were not in school to continue to receive free meals.

However, the department disputed Feeding Our Future’s claim at the hearing that it only had 30 days to approve or reject new meal site applications. Assistant Attorney General Kristine Nogosek said the department is still waiting for Feeding Our Future to provide more information about the disputed sites, and she argued there is no deadline for that process to complete.

Guthmann disagreed. In December, Guthmann ordered the department to approve or disapprove pending applications “in a reasonably expeditious manner.”

Seven months later, when the backlog of site requests reached 144, Guthmann found the department in contempt of court and ordered MDE to pay a $35,750 penalty to Feeding Our Future.

“The MDE cannot divide the application process into multiple parts and take as long as it wishes at each stage of the process except the last,” Guthmann wrote in his order.

The judge also found that Feeding Our Future’s request for an order requiring the department to pay $20 million in late claims to the association’s approved sites was “moot” because the department had already paid those claims. .

MDE opted to pay those claims after the judge told the agency it was entitled to request receipts, attendance records and other documents from Feeding Our Future to ensure it was satisfied. were valid claims. The agency had found that the organization had violated several performance standards and was in a state of “serious deficiency”.

Although Feeding Our Future disputed the department’s request for such records, Guthmann told the nonprofit during the April 2021 hearing that MDE had the right to request supporting documentation. But he said MDE could not withhold payment unless it determined that “deficiencies cannot be corrected by imposing these additional terms”.

The department did not claim that any of the reimbursement requests were fraudulent, according to the transcripts. This week, the department said that because it was assisting with the federal investigation, the agency could not “assert certain defenses” when Feeding Our Future filed a lawsuit because it would not inform the public. organization of the survey.

MDE leaders faulted the USDA for not responding urgently to their repeated concerns about Feeding Our Future. Commissioner Heather Mueller said state officials repeatedly contacted the USDA after they became suspicious of the nonprofit’s “inexplicable growth” in July 2020. But no one has took this information seriously, Mueller said, until the department approached the FBI in April 2021.

Writer Briana Bierschbach contributed to this report.

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