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Minnesota’s reputation for good government faces fresh scrutiny after Hamline University political science professor David Schultz published a pointed analysis in the Minneapolis Times. Tracing decades of decisions that prioritized spending over safeguards, Schultz appeared on FOX 9’s All Day this week to unpack how the state arrived at its current wave of scandals. What stands out is the sheer predictability of it all, rooted in choices both parties made without a second thought to consequences.
Today’s revelations hit hard amid ongoing federal probes into programs like Feeding Our Future, where hundreds of millions vanished. Schultz insists the problems transcend partisanship, demanding a hard look at institutional weaknesses that have festered for generations. Let’s dive into the timeline he lays out.
Seeds of Trouble: The 1970s Expansion Without Guardrails
The story kicks off with the 1970s Minnesota Miracle, a boom in social services, health care, and welfare spending fueled by a surging tax base. Legislators poured money into ambitious programs yet skimped on the auditing and compliance teams needed to watch it flow. Counties and nonprofits stepped in as delivery partners, complicating oversight from the start. Schultz points out this mismatch created early vulnerabilities, as rapid growth outpaced any real monitoring capacity. By ignoring basic checks like separation of duties, the state set itself up for future headaches. Here’s the thing: good intentions don’t pay the bills when funds go missing.
Privatization Push: 1980s and 1990s Shift to Contracts
Recessions in the mid-1970s sparked a pivot to what Schultz calls New Public Management, outsourcing services to private firms and nonprofits for efficiency. Governors like Arne Carlson and Jesse Ventura locked in this model with performance contracts for everything from mental health to job training. Human services fragmented further, with state dollars funneled through layers of providers. Oversight lagged badly, as staffing for grant monitoring never caught up to the explosion in contracts. This decentralization sounded smart on paper, but it diluted accountability in practice. Let’s be real, complexity breeds opportunity for those looking to game the system.
Gutting the Watchdogs: Treasurer Abolition and Auditor Limits
A turning point came in 1998, when bipartisan votes in the Legislature – Senate 62-3, House 83-45 – paved the way to scrap the state treasurer’s office by 2003. That role once handled revenue custody and cash oversight, a crucial firewall now gone without replacement. Under Tim Pawlenty from 2003 to 2011, budget crunches slashed compliance units across agencies. Fast forward to 2015, another bipartisan move let counties opt out of state audits for private ones, upheld by the Supreme Court in 2018’s Otto v. Wright County. These steps systematically weakened internal controls. Schultz warns such moves handed fraudsters the keys to the kingdom.
Pandemic Powder Keg: COVID Funds and Modern Scandals
The Walz era amplified risks with massive federal relief during COVID-19, echoing 1970s and 2023 surplus spending sprees. Programs swelled without real-time audits or robust data systems, relying on reimbursement claims ripe for abuse. Feeding Our Future exemplifies the fallout, with dozens indicted for siphoning child nutrition dollars amid lax verification. Unemployment hacks, PPP scams, and child care fraud piled on, totaling billions in losses. Federal charges now top 90 defendants, many tied to social services. The pattern holds: scale up fast, watch fraud follow.
Why It Persists: The Fraud Triangle in Action
Schultz invokes the fraud triangle – motive, rationalization, opportunity – noting Minnesota manufactured ample opportunity through underfunded ethics bodies and siloed data. Cultural insularity and “Minnesota Nice” may enable cover-ups, but structural flaws dominate. Comparative data shows the state’s issues exceed national norms, demanding AI tools and whistleblower shields. Both parties share blame: Republicans for cuts, Democrats for unchecked expansion. Enforcement gaps persist, with ethics commissions prosecuting scant cases. Breaking this requires unglamorous fixes like sustained auditor staffing.
Final Thought
Schultz’s blueprint calls for an independent oversight office, blockchain tracking, and bipartisan commitment to prevention over reaction. As the Legislature convenes today, the clock ticks on real reform. Minnesota can rewrite its story, but only if leaders treat safeguards as core infrastructure. What overlooked check would you prioritize?
Source: Original YouTube Video
Christian Wiedeck, all the way from Germany, loves music festivals, especially in the USA. His articles bring the excitement of these events to readers worldwide.
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