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.
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

Mark Rose
Mark Rose

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.3,4 Just 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.

References

  1. The Center Square. (2025). As federal probe widens, Gov. Walz tells Seattle crowd he’ll welcome more Somalis. https://www.everettpost.com/state-news/as-federal-probe-widens-gov-walz-tells-seattle-crowd-hell-welcome-more-somalis/
  2. US Department of Justice. (2025). Four More Defendants Plead Guilty to Feeding Our Future Fraud. https://www.irs.gov/compliance/criminal-investigation/four-more-defendants-plead-guilty-to-250-million-feeding-our-future-fraud-scheme
  3. Cascade PBS. (2024). Audit Finds More Problems How WA Spent Federal COVID Aid. https://www.cascadepbs.org/investigations/2024/06/audit-finds-more-problems-how-wa-spent-federal-covid-aid/
  4. FTI Consulting. (2025). IEDC Forensic Review Report. https://www.iedc.in.gov/docs/default-source/iedc-assets/fti-consulting-iedc-forensic-review-report_10.02.2025.pdf?Status=Master&sfvrsn=f61429d1_6
  5. KGMI. (2024). New Audit Shows State Dept of Commerce Improperly Gave Grants. https://mybellinghamnow.com/news/297792-new-audit-shows-state-dept-of-commerce-improperly-gave-grants-to-applicants/
  6. The Center Square. (2025). Whistleblower Claims WA Community Reinvestment Program Riddled with Self-Dealing. https://www.everettpost.com/state-news/watch-whistleblower-claims-was-community-reinvestment-program-riddled-with-self-dealing/
  7. Council for the Homeless. (2025). System Dashboard for Clark County. https://www.councilforthehomeless.org/by-the-numbers/system-dashboard-for-clark-county/
  8. Washington State Auditor’s Office. (2024). Performance Audit: Contracted Homeless Services. https://sao.wa.gov/reports-data/audit-reports/contracted-homeless-services

Mark Rose
Yacolt


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6 Comments

  1. Laura

    The article correctly notes that Minnesota experienced a major fraud in the Feeding Our Future case and that Washington State auditors have identified weaknesses in grant oversight. Those facts are supported by DOJ prosecutions and Washington State Auditor reports.

    However, the article overstates parallels and draws conclusions not supported by evidence:

    1. No evidence of comparable fraud in Washington
    2. Minnesota’s scandal involved proven criminal conspiracies, indictments, guilty pleas, and convictions totaling $250 million. In Washington, cited audits identify administrative failures and weak documentation, not confirmed criminal theft at that scale. Audits explicitly distinguish between poor controls and fraud.
    3. “Lost visibility” ≠ stolen funds
    4. The $1.17 billion figure refers to inadequate documentation and tracking of federal aid, not missing money or proven misuse. Auditor reports do not conclude funds were stolen, only that oversight controls were insufficient.
    5. Behavioral health grant misuse was limited and corrected
    6. Isolated examples of improper spending (e.g., snacks or phone cases) were identified through audits and corrective actions were taken. These incidents do not demonstrate systemic criminal fraud, unlike Minnesota’s case.
    7. Community Reinvestment Program allegations remain unproven
    8. Claims of nepotism in the CRP are whistleblower allegations, not findings of an investigation or audit. No criminal charges or substantiated audit conclusions have been issued to date.
    9. Homeless services oversight problems are known and monitored
    10. The State Auditor has documented weaknesses in HMIS data verification but has not found evidence of large-scale fraud or theft by Clark County providers. Oversight gaps are acknowledged and subject to ongoing reform.

    Conclusion:
    The article accurately highlights oversight weaknesses but misrepresents them as evidence of imminent or ongoing fraud comparable to Minnesota’s scandal. Existing evidence supports stronger controls and audits—not claims of a “fraud factory” or justification for a funding moratorium absent proven criminal activity.

    Reply
    1. Susan

      So, in summary, you’re OK with the current system and feel all is well? To the point that you attempt to contradict the sourced statements presented?

      You, sir, are part of the problem! All is well, nothing to see here, move along.

      Which NGO do you work for?

      Reply
  2. JDkohl

    Could the $400 million dollars in fraudulent claims payments made by the WA Unemployment Security Department during the covid period be construed as an overstatement or perhaps scriveners errors?

    Reply
  3. Melissa

    The Clark County Public Health department welcomes this type of fraud through its aversion to IDs. They regularly claim that showing IDs for services presents “a barrier “ to “certain populations.” And by not tracking recipients for services, they have created a system rife with lack of accountability.

    Reply
  4. Tom Scott

    No I’ve never talked to anybody that is more ignorant than Bob Ferguson when he was attorney general especially when I was having a problem and told him my problem and that I was a sole proprietor I couldn’t launder money because I got a check put in my account and I didn’t collect tips because they charged me $199 to legal zoom to monitor my bank accounts he didn’t know what a sole proprietor was I think he’s crooked as a day as long and I think insley resigned what two months early so he he get out of here before things went down I heard he’s in Idaho but I think you went into hiding

    Reply

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