Opinion: A warning to Washington – The ‘Minnesota Model’ of fraud has arrived

Yacolt resident Mark Rose warns that Washington’s grant pass-through system mirrors the failures behind Minnesota’s Feeding Our Future fraud scandal and urges stronger oversight before taxpayers face major losses. Photo provided by Mark Rose.

Yacolt resident Mark Rose says ‘it is time to turn on the lights before Washington taxpayers are left holding the bill for a scandal that makes Minnesota’s look like a dress rehearsal’

Editor’s note: Opinions expressed in this letter to the editor are those of the author alone and may not reflect the editorial position of ClarkCountyToday.com

The recent arrival of Minnesota Governor Tim Walz in Seattle for a fundraiser with Governor Bob Ferguson should serve not as a celebration of progressive governance, but as a flashing red warning light for every taxpayer in Washington state. While Governor Walz was feted by donors in a downtown ballroom, back in his home state, federal investigators are still untangling the wreckage of the “Feeding Our Future” scandal, a massive $250 million theft of taxpayer money funneled through non-governmental organizations (NGOs).¹

Why should Clark County residents care about the Minnesota scandal? Because Washington State has replicated the exact same “high-trust, low-verification” funding infrastructure that allowed the Minnesota fraud to flourish. We are operating a system where billions of dollars are “passed through” state agencies like the Department of Commerce to a sprawling network of NGOs with shockingly little oversight.

In Minnesota, the scam was simple: NGOs claimed to be feeding children, fabricated names on rosters, and pocketed millions to buy luxury cars and real estate.² The state agency in charge failed to verify the data, operating on an honor system that criminals happily exploited.

Here in Washington, the warning signs of a similar catastrophe are already visible. A recent state audit revealed that the Department of Commerce “lost visibility” into how grant funds were being spent, with auditors flagging over $1.17 billion in federal aid that lacked adequate accounting records.^3,4Just like in Minnesota, our state agencies are cutting checks to unverified applicants. In one egregious instance involving behavioral health grants, taxpayer funds meant for treatment facilities were spent on snacks and phone cases because the state failed to perform basic due diligence.⁵

Even more alarming are the whistleblower allegations surrounding Washington’s $200 million Community Reinvestment Program (CRP). Reports indicate that politically connected NGOs in the Seattle area may have engaged in nepotism, directing down-payment assistance funds to family members of their own staff.⁶ This mirrors the “insider” self-dealing seen in the Minnesota case, where the very people entrusted to distribute aid were the ones looting the treasury.

Clark County is not immune to this systemic vulnerability. Our local response to homelessness is entirely dependent on this same pass-through model. Millions of dollars flow from the state to the county, and then to local nonprofits like the Council for the Homeless and others.⁷ While these organizations have stated missions to help the vulnerable, state auditors have repeatedly found that local governments fail to adequately monitor service-provider performance or verify the data entered into the Homeless Management Information System (HMIS).⁸ We are relying on the recipients of the funds to self-report their success, creating a conflict of interest that invites abuse.

Governor Ferguson and our local County Councilors must take immediate action to secure our fiscal house. The “honor system” is broken. We cannot continue to treat NGOs as sacred cows that are above scrutiny. The similarities between the Minnesota fraud factory and Washington’s current grant administration are too eerie to ignore.

We demand a moratorium on the “pass-through” of funds to any entity that has not undergone a forensic — not just procedural — audit. We call for an independent investigation into the Department of Commerce’s grant protocols to ensure that the “loss of visibility” admitted by auditors is corrected before it becomes a cover for criminal theft.

If Governor Walz’s visit teaches us anything, it is that fraud thrives in the shadows of bureaucracy. It is time to turn on the lights before Washington taxpayers are left holding the bill for a scandal that makes Minnesota’s look like a dress rehearsal.

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