A staggering letter from Minnesota state employees has surfaced, alleging that agency leaders turned a blind eye to years of fraud warnings while punishing those who dared to speak up.
An unsigned whistleblowers’ letter submitted to Congress claims that Minnesota state agency leaders ignored fraud concerns for years, retaliated against employees who raised alarms, and shielded officials tied to programs later linked to massive fraud.
The letter, vetted by state lawmakers, was presented by Minnesota state Rep. Kristin Robbins (R) during her testimony to federal lawmakers this month. Its contents, previously unreported, focus heavily on the state’s Housing Stabilization Services program, which ballooned from a $3 million annual budget in 2020 to $104 million by 2024 before being shuttered.
Critics are sounding the alarm over what appears to be a systemic failure in Minnesota’s oversight of taxpayer dollars, according to Just the News. It’s a betrayal of public trust that saw hundreds of millions siphoned from programs meant to help the vulnerable. The question now is whether accountability will ever catch up to the scale of the scandal.
The whistleblowers’ letter details concerns raised as early as 2019, spanning multiple assistance programs, including contract irregularities and lax oversight. By late 2022, employees pressed Eric Grumdahl, an assistant commissioner at the Department of Human Services, to act on fraud in the Housing Stabilization Services program. The response? “His response to staff was alarming,” the letter states.
Instead of action, the letter alleges that “fraud concerns ... were strongly dismissed and numerous employees experienced serious retaliation.” Workers faced internal investigations, surveillance, reassignments, and even veiled threats—one employee was allegedly told, “You will never get another state job.” This kind of heavy-handed silencing reeks of a culture more concerned with image than integrity.
The Housing Stabilization Services program, designed to secure housing for older residents and those with disabilities or mental health challenges, became a feeding ground for fraud. From a modest start in 2020, costs exploded to over $100 million annually by 2024, with more than a dozen indicted for schemes tied to the program. Federal court records show 13 individuals accused of claiming $14 million in false reimbursements, spending public money on personal luxuries like land in Kenya and cryptocurrency.
Let’s not mince words: this is what happens when oversight is treated as an afterthought. Programs meant to serve the needy are too often exploited when bureaucrats prioritize political correctness over accountability. The letter even notes employees were accused of bias for questioning funds flowing to “diverse communities,” a deflection that only muddied the waters further.
By January 2023, desperate state workers escalated their concerns to top Department of Human Services leadership, HR, auditors, and even the governor’s office. Yet, in February 2023, then-leader Jodi Harpstead reportedly told hundreds of staff in an all-staff meeting to stop raising issues she deemed irrelevant. When Harpstead resigned in February 2025, Gov. Tim Walz still praised her, saying, “I am proud of her work running the most complex and wide-ranging agency in state government.”
Walz’s glowing send-off for Harpstead raises eyebrows when you consider the scale of fraud—$300 million tied to the Feeding Our Future scandal alone, overseen by the state Department of Education. Add to that the housing program mess, and it’s clear Minnesota’s leadership has been asleep at the wheel. Taxpayers deserve answers, not platitudes.
Interim Commissioner Shireen Gandhi, Harpstead’s successor, claims the department is working to “change the culture” and make it more receptive to employee feedback. She stated, “When employees feel heard and trusted, they are better positioned to surface risks early, improve systems, and deliver strong outcomes for Minnesotans.” Fine words, but will they translate to real reform, or are they just damage control?
The whistleblowers’ letter paints a damning picture of a system that punished vigilance while fraudsters ran rampant between 2019 and 2025. Grumdahl, who oversaw the housing program, was fired in September just before a state committee testimony—coincidence, or convenient timing? The pattern of dismissing red flags while protecting the status quo is a textbook case of bureaucratic rot.
Ongoing investigations into Minnesota’s assistance programs suggest the fraud nightmare is far from over. With hundreds of millions already lost, the public’s trust in government stewardship is at rock bottom. Every dollar stolen is a dollar taken from those who truly need help, and that’s the real tragedy here.
Rep. Kristin Robbins is leading the state’s probe into this mess, and her submission of the whistleblowers’ letter to Congress signals that the fight for accountability isn’t dead yet. But with federal indictments piling up—most tied to individuals of Somali descent, as the letter notes—the cultural sensitivities around this issue risk derailing honest discussion. We must focus on the crimes, not the distractions, to ensure justice.
What’s next for Minnesota? If history is any guide, expect more hand-wringing from state leaders while the real work of reform falls to those willing to confront uncomfortable truths. Taxpayers can’t afford another round of ignored warnings and retaliated whistleblowers.
