A 205-page report reveals that the Minnesota Department of Human Services used private investigators and outside law firms to intimidate and surveil whistleblowers who reported suspected fraud and abuse in taxpayer-funded social service programs. The investigation, which included testimony from former officials, uncovered allegations of home surveillance,phone monitoring, and attempts to use military connections to track employees. The report as well notes that a fraud hotline was de-anonymized, increasing fears of retaliation. goverNor Tim Walz and state leaders are criticized for failing to act on credible fraud concerns for years.
and the state’s management of taxpayer-funded social service programs, including by hiring investigators outside of the agency to scrutinize whistleblowers and monitor workers who reported suspected abuse, a new The 205-page report released on Monday alleged Minnesota Department of Human Services officials retaliated against whistleblowers using the help of outside private investigators and law firms, intimidation tactics, and surveillance efforts, including one instance where a DHS manager allegedly proposed using military connections to determine the locations of employees raising concerns about .
The investigation marks the most comprehensive overview of leadership deterioration contributing to fears of speaking out against Minnesota’s federal funding mismanagement for more than half a decadeEx-CIA officer accused of stealing $40 million in gold bars to remain jailedGov. Tim Walz, D-Minn. , listens during a House Committee on Oversight and Government Reform hearing on oversight of fraud and misuse of Federal funds in Minnesota, Wed. , March 4, 2026, on Capitol Hill in Washington.
Investigators interviewed nine current and former government officials and concluded DHS intimidated and harassed staff who raised fraud concerns under the Walz administration. The conclusions rely in part on testimony from Shireen Gandhi, a temporary DHS commissioner whomlast month, just days before she was due to face a confirmation hearing before the Minnesota Senate Health and Human Services Committee.
Shireen Gandhi, then-temporary commissioner of the Minnesota Department of Human Services, testifies before the House Oversight Committee during a transcribed interview on Feb. 17, 2026, as lawmakers investigate fraud in Minnesota’s social service programs and allegations of retaliation against whistleblowers. “Gandhi confirmed in her testimony whistleblower reports that DHS upper management would regularly meet, or ‘check-in,’ with employees who have reported fraud concerns,” the committee report states on page 108, citing her Feb. 17 taped interview with committee staffers.after flagging contract irregularities in November 2019, for another “year or two” following Bernstein’s leave.
She maintained that Bernstein was “disruptive,” but later admitted not having much first-hand knowledge of Bernstein’s conduct. Meanwhile, former DHS commissioner Jodi Harpstead conceded in a Feb. 23 interview that she was aware of the agency hiring outside Human Resources personnel to “add to our capacity to do investigations,” but was unsure if any outside law firms were hired.
When Gandhi was asked the same question in her interview, she too acknowledged DHS hiring external personnel for internal investigations, but was unsure if law firms were commissioned for help. The report details shocking allegations from whistleblowers who claimed agency investigators photographed their homes and vehicles, monitored their phones and computers, sought information about their children’s schools, and denied them promotion opportunities after they reported suspected fraud.
But when Gandhi was asked about one alleged retaliation incident, she said people are generally “sensitive” when making retaliation claims andOne of the most striking allegations surrounds Emmanuel Nwala, a U.S. Army veteran and former interim manager at DHS, who allegedlyto identify the locations of whistleblowers who were critical of department leadership’s handling of fraud reports, according to an email corroborated by former DHS assistant commissioner Eric Grumdahl. Despite Grumdahl’s confirmation of Nwala’s communications, Walz repeatedly said “I am not” when asked whether he was aware of the email.
This DHS"manager" has been promoted to a"leadership" role. Emmanuel Nwala has threatened employees with military surveillance & made numerous staff uncomfortable with his intimidation & behavior. See the email that was obtained through a PUBLIC DATA REQUEST. Grumdahl told House investigators that Nwala had been the target of anonymous messages against him, but that “that was not helpful or appropriate” and said he hoped he wouldn’t “be doing that in the future.
”Committee investigators further highlighted that a DHS fraud hotline intended to provide anonymous reporting became effectively “deanonymized” sometime after 2022 and before April 2023, causing whistleblowing employees to fear their complaints would be routed to management and human resources officials. The Republican majority behind the report concluded that Walz and the state attorney general were aware of credible fraud concerns for years, yet ultimately failed to use their authority to halt payments or remove questionable providers from government programs.
Even Walz’s former chief of staff, Chris Schmitter, said he was aware of then-U.S. Attorney Andrew Luger’s warnings to state officials early last year regarding concerns that frontline employees did not feel comfortable flagging fraud-related issues, according to the transcribed interview on page 117 of the report. Former Walz Chief of Staff Chris Schmitter participates in a transcribed interview with House Oversight Committee investigators on Feb. 27, 2026.
During the interview, Schmitter recalled then-U.S. Attorney Andrew Luger advising Minnesota officials in early 2025 to ensure frontline state employees felt empowered to report fraud concerns. , the nonprofit at the center of a massive federal child nutrition fraud case.
The fraud from this scheme alone has been estimated to have cost roughly $300 million in federal child nutrition funding, with a total of nearly $9 billion in Medicaid-related funds may have been lost or placed at serious risk. , urging the White House Task Force to Eliminate Fraud to conduct a comprehensive review of Minnesota’s social service programs and anti-fraud controls. Vice President JD Vance speaks with reporters upon arriving on Air Force Two at Joint Base Andrews, Md.
, Thursday, May 28, 2026. “Billions of dollars were stolen because Minnesota state leaders turned a blind eye to rampant fraud and retaliated against state employees who dared to raise concerns,” Comer said, adding he will continue to support the Trump administration’s anti-fraud initiatives to have the “backs of hardworking Americans. ”Walz and Ellison have previously disputed Republican allegations that state officials knowingly allowed fraud to continue.
During prior congressional testimony, Walz said he was unaware of some whistleblower allegations andThe report comes as House Republicans prepare to advance a package of anti-fraud legislation this week aimed at strengthening oversight of federal programs. The Government Accountability Office
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