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Speaker 1: On this episode of the News World, we're going to

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Speaker 1: discuss the details of the billion dollar fraud scheme in

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Speaker 1: the state of Minnesota and how it all happened. How

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Speaker 1: could one state lose this much money through social service

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Speaker 1: programs while going unchecked. My guest today has written about

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Speaker 1: Minnesota's fraud for the Manhattan Institute's City Journal in an

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Speaker 1: article co authored with Christopher Ruffo quote the largest funder

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Speaker 1: of Al Shabab is the Minnesota taxpayer, which is available

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Speaker 1: now at citydash Journal dot org. I'm really pleased to

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Speaker 1: welcome my guest, Ryan Thorpe. He is an investigative reporter

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Speaker 1: at the Manhattan Institute. Ryan, welcome, and thank you for

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Speaker 1: joining me a news room.

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Speaker 2: It's great to be here.

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Speaker 1: And then let me say to everybody that I think

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Speaker 1: the paper that Ryan and Chris Road is astonishing, and

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Speaker 1: as you listen to this podcast, you'll understand what an

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Speaker 1: extraordinary story they've helped put together and how truly this

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Speaker 1: is a wake up call for the United States at

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Speaker 1: a lot of different levels. But let me give you

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Speaker 1: a brief overview of the frauds game, because frankly, it's

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Speaker 1: sufficiently complicated. I had to go back and reread various

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Speaker 1: things several times to begin to realize the real depth

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Speaker 1: of it. The fraud scheme began with a Minnesota based

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Speaker 1: nonprofit organization called Feeding Our Future. Their goal was to

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Speaker 1: help feed children during the COVID pandemic shutdowns when food

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Speaker 1: and secure children were not going to school. The result

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Speaker 1: was they set up several feeding sites by partnering with

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Speaker 1: local businesses. The only problem was kids weren't actually being

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Speaker 1: fed by these sites, but the stay with being billed

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Speaker 1: as if they were. And what's worse, the owners of

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Speaker 1: the businesses reimbursed for vinfoices for feeding children were actually

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Speaker 1: spending the money on luxury cars, houses, and real estate

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Speaker 1: projects over seats. Then a second program emerged, the Housing

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Speaker 1: Stabilization Services. Hundreds of providers were reimbursed for assistance they

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Speaker 1: claimed to provided to people at risk for homelessness, though

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Speaker 1: federal authority said those services were just not provided. And

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Speaker 1: yet another Minnesota program meant to provide therapy for autistic children.

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Speaker 1: Prosecutors said providers recruited children in Minneapolis Somali community, falsely

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Speaker 1: certifying them as qualifying for autism treatment, and then paying

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Speaker 1: their parents cash payments as kickbacks for their cooperation. The

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Speaker 1: amount of money stolen is nearing one billion dollars. Remember

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Speaker 1: this is just for the city of Minneapolis. You would

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Speaker 1: think it a billion that should be nationwide, but it's not.

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Speaker 1: And Minnesota has now announced that they're putting a pause

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Speaker 1: on fourteen other social services programs to evaluate them for fraud.

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Speaker 1: So now, Ryan, given that background, First of all, what

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Speaker 1: was your reaction when you first encountered this.

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Speaker 2: It was astonishing. We had been talking about doing some

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Speaker 2: reporting on waste, fraud and abuse in government programs, kind

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Speaker 2: of for at large. We clued into Minnesota as perhaps

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Speaker 2: being a good location for some on the ground reporting

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Speaker 2: given some of the indictments that we were seeing coming down.

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Speaker 2: But when I really dove into this and started to

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Speaker 2: piece together the scope of the fraud in the state

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Speaker 2: of Minnesota, it was absolutely astonishing, and very quickly. The

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Speaker 2: other thing that became apparent to me was that when

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Speaker 2: you're looking at these fraud rings, they have been heavily

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Speaker 2: concentrated in the state's Somali community, But reviewing kind of

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Speaker 2: mainstream media cup or even statements from progressive politicians, it

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Speaker 2: just seemed like this was an inconvenient fact that no

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Speaker 2: one was either able or willing to confront. And so

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Speaker 2: those two elements of this piece struck me right away

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Speaker 2: and signaled to me that this was going to be

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Speaker 2: fertile ground for some investigative reporter.

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Speaker 1: How did you and Chris first discover the story?

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Speaker 2: I began by just going through press releases from the

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Speaker 2: US Attorney's Office. I'd been developing some sources in the state.

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Speaker 2: People had indicated to me that this was something that'd

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Speaker 2: be worthwhile to look into. I was told that state

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Speaker 2: level officials had really dragged their heels in confronting the program,

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Speaker 2: so that wouldn't be the place to begin. But I

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Speaker 2: simply went back over the past five years and I

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Speaker 2: wrote through every press release that had been issued by

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Speaker 2: the US Attorney's Office announcing indictments, and pretty quickly I

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Speaker 2: was able to establish a timeline in terms of charges

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Speaker 2: that have come down and allegations that the US Attorney's

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Speaker 2: Office has made against members of the Somoli community. And

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Speaker 2: then after that it really focused on developing additional sources.

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Speaker 2: So we started cold calling people associated with counter terrorism

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Speaker 2: with law enforcement, and we were able to develop a

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Speaker 2: number of people who were willing to speak to us,

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Speaker 2: who had looked into this, had a certain area of

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Speaker 2: expertise on this topic, and we're willing to feed us

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Speaker 2: some information.

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Speaker 1: Will you be adignianto, because you did have a US

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Speaker 1: attorney who has actually being pretty aggressive. The gap between

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Speaker 1: the public coverage and what he was uncovering, it seems

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Speaker 1: to me might be as big as anything I've ever seen.

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Speaker 1: Do you think if he had not been so aggressive

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Speaker 1: that they would never have found any of this?

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Speaker 2: It's certainly quite possible. So one thing I would say

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Speaker 2: is that there have been people, and I would say

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Speaker 2: people are kind of more associated with the political right

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Speaker 2: in the state of Minnesota, who have been trying to

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Speaker 2: do good work on this and have been doing good

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Speaker 2: work and trying to raise alarm bells, but it simply

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Speaker 2: wasn't punching through into kind of a more mainstream conversation

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Speaker 2: for a number of different reasons that given the fact

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Speaker 2: that the progressive political establishment, I would say, the mainstream

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Speaker 2: press corps was just simply from what I can tell,

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Speaker 2: turning a blind eye to this massive issue. If it

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Speaker 2: wasn't for the work of the US Attorney's Office breaking

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Speaker 2: up these fraud ranks, charging people and also coming out

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Speaker 2: at some press conferences with some really strong statements. I

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Speaker 2: think it would have been much easier for the establishment

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Speaker 2: to ignore this.

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Speaker 1: And as I said, even as the facts began to

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Speaker 1: come out about how much corruptions in bought, you have

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Speaker 1: people like Congresswoman Elen Omar, who was a s ollyborn congressman,

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Speaker 1: aggressively attacking the people who are trying to get to

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Speaker 1: the truth.

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Speaker 2: It's one hundred percent right, I would say. It's a

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Speaker 2: pattern that we've seen for a number of years now.

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Speaker 2: So off the top, you had mentioned defeeding our future scandal. Well,

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Speaker 2: when alarm bells were going off about that particular fraud ring,

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Speaker 2: the leaders responded by filing litigation against the state government

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Speaker 2: and alleging racial discrimination. And so that this is something

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Speaker 2: that we've seen here as a shield on multiple occasions,

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Speaker 2: and even now with the publication of our Peace and

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Speaker 2: City Journal, we've gotten attacks by people saying, wow, this

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Speaker 2: is racism. It's like well, first of all, the first

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Speaker 2: question is whether or not it's true, and if it's true,

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Speaker 2: then we need to confront the facts as they are

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Speaker 2: and begin to figure out what to do about it.

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Speaker 2: We continue to see that defense here.

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Speaker 1: In this first phase feeding our future. If I understand it,

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Speaker 1: Seventy eight people have been charged with fraud. Fifty of

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Speaker 1: them have already been convicted.

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Speaker 2: Yes, many have pled guilty because the evidence is overwhelming.

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Speaker 1: And they had apparently set up over two hundred and

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Speaker 1: fifteen off friction in sights within several dozen shell companies.

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Speaker 1: This was a real project. It was.

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Speaker 2: This was a sophisticated, coordinated network in Minneapolis, in the

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Speaker 2: state of Minnesota. It was heavily concentrated in the Somali community.

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Speaker 2: And look, they figured out, we can get our hands

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Speaker 2: on millions of tax dollars if we simply eat doctor

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Speaker 2: some paper work here, and if anyone starts asking questions,

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Speaker 2: we're going to accuse them of being bigots. And we're

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Speaker 2: also going to flex our political connections to various Democratic

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Speaker 2: officials in the state.

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Speaker 1: Frankly, the one I found the most fascinating was the

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Speaker 1: autism program, where they were actually paying parents a monthly

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Speaker 1: fee for the parents to claim that their child was

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Speaker 1: autistic when they're not. That's a pretty amazing deliberate effort

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Speaker 1: to rip off the government.

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Speaker 2: It is the other thing that I find quite noteworthy

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Speaker 2: about that particular case is we've seen some people say,

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Speaker 2: after this has been exposed, well it's a few bad apples. Well,

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Speaker 2: this autism fraud case, one indictment's come down. The US

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Speaker 2: Attorney's office says, we're scratching the surface that more charges

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Speaker 2: are coming, and it shows that this was a network

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Speaker 2: that extended out into the wider Somali community. They needed

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Speaker 2: parents on board with this scheme, and parents who you know,

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Speaker 2: may not have been ring leaders themselves were receiving kickbacks,

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Speaker 2: and prosecutors allege that the parents, if the kicks weren't

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Speaker 2: high enough, they said, well, there's so many fraudulent autism

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Speaker 2: providers in the smaller community. If you don't pay me more,

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Speaker 2: I'm gonna pull my kid from your fake program, take

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Speaker 2: them over to another fraudulent fake program, and they'll give

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Speaker 2: me more money. So they were using their leverage in

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Speaker 2: order to get a greater share of the stolen tax dollars.

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Speaker 1: So you had a competitive fraud market.

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Speaker 2: Yes, yes, that's exactly right.

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Speaker 1: You know, it's one of thom you think about a

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Speaker 1: couple of people who happen to be doing fraud, But

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Speaker 1: this is a real machine. Yes, there was a period

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Speaker 1: where during COVID where there's I think two billion dollars

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Speaker 1: stolen by identity theft by California criminals in prison using

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Speaker 1: the State of California's computer programs to go out and

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Speaker 1: file false claims and then have friends on the outside

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Speaker 1: picking up the checks, and I think it came to

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Speaker 1: two billion dollars. Se people really underestimate how much fraud

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Speaker 1: is going on in the United States in general.

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Speaker 2: I think that's true. The situation in Minnesota seems quite bad.

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Speaker 2: Where it stacks up nationally, well, that's very difficult to say.

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Speaker 2: The reality is, we don't even know the true dollar

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Speaker 2: figure in the state of Minnesota. From what I'm hearing,

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Speaker 2: it's very safe to say billions of dollars. But final

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Speaker 2: price take i'm sure of at this point. But what

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Speaker 2: these schemes do reveal is that if someone is motivated

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Speaker 2: and has a little bit of know how, it doesn't

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Speaker 2: appear to be that difficult to walk away with hundreds

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Speaker 2: of millions of stolen tax dollars because it keeps cropping

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Speaker 2: up in that state.

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Speaker 1: Well, if you look at it, the Fear Our Future

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Speaker 1: program jumped from point four million in federal money in

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Speaker 1: twenty nineteen two two hundred million two years later, in

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Speaker 1: twenty twenty one. Now, you had thought somebody would have

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Speaker 1: looked and said, with that scale of growth, something's happening

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Speaker 1: that we need to really dig into. But apparently it

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Speaker 1: is ignored it.

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Speaker 2: I think that's spot on. I think they did look

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Speaker 2: the other way, and I think that's a consistent pattern

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Speaker 2: we see here in regards to all of these fraud scams.

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Speaker 2: You see expenditures skyrocket over a very short number of years,

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Speaker 2: which should be setting off, you know, major alarm bells

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Speaker 2: for the people who are responsible for keeping an eye

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Speaker 2: on the public purse and overseeing and administering these welfare programs.

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Speaker 2: But they did not crack down on this. It was

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Speaker 2: allowed to fester. I also think you mentioned the COVID nineteen.

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Speaker 2: I think that's a very important moment here. I think

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Speaker 2: that these issues predate COVID in the state of Minnesota.

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Speaker 2: But we're allowed to fester, and then you get COVID,

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Speaker 2: you have more money going up the door than ever.

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Speaker 2: You have progressive politicians saying, well, this is an emergency.

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Speaker 2: We can't worry about checks and balances right now. We

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Speaker 2: simply need to get money into the hands of people

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Speaker 2: who need it. And so because this problem had been

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Speaker 2: allowed to fester before then it just accelerates during the pandemic.

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Speaker 1: Ryan, Isn't it true that there've been a very large

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Speaker 1: number of potential whistle blowers who have complained publicly that

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Speaker 1: the Minnesota government in fact knew about this and did

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Speaker 1: nothing about it, but that in fact it clearly was

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Speaker 1: there and it clearly was being ignored or covered up

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Speaker 1: by Tim Watson's administration. Hasn't that been an allegation by

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Speaker 1: people who actually are in the bureaucracy.

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Speaker 2: Yes, so there is a significant minority. I would say,

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Speaker 2: we're talking hundreds of employees within DHS in the state

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Speaker 2: of Minnesota who have been trying to raise concerns for

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Speaker 2: a number of years now. They've taken to various social

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Speaker 2: media platforms to publish allegations against the government. And what

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Speaker 2: they allege is that we've been trying to clean up

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Speaker 2: the fraud and to expose the fraud internally within the

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Speaker 2: state government for a very long time, but that political

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Speaker 2: officials have been turning a blind eye and also retaliating

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Speaker 2: against them. And then one other thing that's somewhat related

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Speaker 2: that comes to mind is that during the Feeding our

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Speaker 2: Future scam, there were concerns raised among bureaucrats by just

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Speaker 2: how rapidly this nonprofit was expanding, both in terms of

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Speaker 2: the sites that it was administering and the total amount

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Speaker 2: of taxpayer dollars it was therefore getting access to. And

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Speaker 2: the ring leaders of this fraud ring, you know, they

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Speaker 2: made public allegations of racism, They coordinated protests. They also

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Speaker 2: filed a lawsuit ledging racial discrimination against the state government.

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Speaker 2: And subsequently we've had an oversight report that was actually

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Speaker 2: published not too long ago that looked into that and

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Speaker 2: was able to get access to, you know, internal correspondence,

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Speaker 2: and it proved that the response from the state government,

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Speaker 2: given the kind of social context they were in at

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Speaker 2: that time, their response was impacted by worries about being

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Speaker 2: seen as racist if they were to crack down on

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Speaker 2: this fraud given the identities and nationalities of the perpetrators.

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Speaker 1: How much of this, sooner or later it comes to

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Speaker 1: Governor Tim Watson's administration, How much responsibility ultimately this his

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Speaker 1: administration there for allowing a billion dollars in fraud.

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Speaker 2: Well, I mean, he's the governor. Most people who were

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Speaker 2: in that position would probably admit in their honest moments,

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Speaker 2: like the buck stocks with me. They are the people

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Speaker 2: who overseeing these programs. This has all happened on their watch.

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Speaker 2: And I've spoken to a number of counter terrorism law

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Speaker 2: enforcement folks who say, look, there is a law enforcement

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Speaker 2: solution here. We need to keep doing investigations, we need

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Speaker 2: to keep bringing charges. But at the end of the day,

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Speaker 2: there was so much fraud that like, there needs to

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Speaker 2: be a change on the policy side of things. We

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Speaker 2: have to stem the tide of this and not just

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Speaker 2: expect law enforcement to clean it all up after the fact.

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Speaker 2: And so if there's going to be a significant change

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Speaker 2: on the policy side, I think that comes from political change,

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Speaker 2: which means Minnesotans are going to have to decide at

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Speaker 2: the ballot box whether or not they're okay with what's

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Speaker 2: been going on, because they should be absolutely outraged at

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Speaker 2: the extent to which they've been taken advantage of.

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Speaker 1: There's an example of a systemic problem. You described the

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Speaker 1: Housing Stabilization Services program as quote almost designed to facilitate fraud.

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Speaker 1: What were the things in the program structure that made

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Speaker 1: it so vulnerable to abuse?

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Speaker 2: They specifically designed it to have very loose criteria in

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Speaker 2: terms of people that it would apply to and they

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Speaker 2: wanted against specifically low barriers for reimbursements. So when you

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Speaker 2: write the rules in such a way as you're trying

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Speaker 2: to make this program accessible to as why of a

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Speaker 2: number of people as possible, and you also are putting

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Speaker 2: in very minimal requirements in terms of how they get

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Speaker 2: money released to them, and then you launch this program

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Speaker 2: in the context of which you already know you have

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Speaker 2: a significant fraud problem in the state, it is unsurprising

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Speaker 2: that pretty quickly costs skyrocket the program spiers outder control.

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Speaker 2: US attorney comes out and says, I think there's more

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Speaker 2: fraud going on here than there is legitimate services, and

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Speaker 2: then the government has to come in and shut the

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Speaker 2: whole thing down.

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Speaker 1: To what a scent. Are the same people involved in

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Speaker 1: all three So.

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Speaker 2: The individual charged in the autism fraud, she was also

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Speaker 2: indicted in the Feeding our Future scam. These are overlapping networks,

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Speaker 2: is how I've heard it describe. So there are people

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Speaker 2: who have gotten in on multiple of these grifts. Now,

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Speaker 2: the other thing I think that's important to note is

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Speaker 2: that these are the three major fraud rings exposed to day.

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Speaker 2: From what I'm hearing, this is the up at the Iceberg.

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Speaker 2: They have had a lack of resources, even though the

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Speaker 2: US Attorney's Office has been doing really great work. I

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Speaker 2: don't think that they've had the resources they need in

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Speaker 2: order to get to the bottom of this. So I

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Speaker 2: think we'll see additional connections grow as more prosecutions come down.

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Speaker 1: When you start talking at a billion dollars, it's set

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Speaker 1: like a gigantic ball and we're only now on the

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Speaker 1: surface of the ball. We don't fully understand the scale

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Speaker 1: and just the handling of a billion dollars. There have

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Speaker 1: to be so many different people who have been violenting

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Speaker 1: the law and methodically seeking to cheat the tax players

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Speaker 1: and frankly to cheat the poor. I mean, this is

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Speaker 1: money that was supposed to go directly to the poor.

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Speaker 2: That's absolutely right. Say whether or not you support in

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Speaker 2: terms of welfare program should be you know, we can

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Speaker 2: have a policy debate about that, but regardless, these programs

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Speaker 2: were in some sense designed to try and help people

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Speaker 2: who had some serious needs. And when you steal money

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Speaker 2: for auto and services, that means actual autistic children are

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Speaker 2: not getting support.

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Speaker 1: Essentially, have three things of money being taken away from

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Speaker 1: the taxpayers, children and other people who should be getting

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Speaker 1: money not getting it, and the growth of a sort

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Speaker 1: of gray economy of people who are really good at stealing.

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Speaker 2: I think that's absolutely right.

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Speaker 1: It has a little of the flavor of the mafia

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Speaker 1: in Sicily, where you begin to have a culture of criminality.

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Speaker 2: Certainly.

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Speaker 1: Yeah. I think one of the sub stories here is

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Speaker 1: the number of people from Somalia who now live in

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Speaker 1: Minneapolis and the role they play in politics. Could you

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Speaker 1: describe their impact on the politics of the state of Minnesota.

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Speaker 2: Absolutely so. Minnesota is home to the largest concentration of

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Speaker 2: Somali's outside of Somalia itself. They began arriving in the

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Speaker 2: state in large numbers in the nineteen nineties. At this point,

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Speaker 2: you know, I've seen estimates kind of on the low

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Speaker 2: end eighty thousand, some people indicating perhaps upward of one

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Speaker 2: hundred thousand. But this is a very sizeable voting block

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Speaker 2: in the state. And the other thing I would say

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Speaker 2: is that they've really established some strong political connections in

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Speaker 2: the state. So even looking at the Feeding our Future

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Speaker 2: scam in particular, several individuals who were involved and indicted

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Speaker 2: had donated to elin Omar or appeared with her publicly.

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Speaker 2: Omar's deputy district director had advocated on behalf of the

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Speaker 2: frauding Omar Fata, who's a former state senator or recently

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Speaker 2: ran for mayor of Minneapolis and finished second. He had

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Speaker 2: gotten involved with lobbying on behalf of the program, and

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Speaker 2: one of the indicted was a senior aid to Minneapolis

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Speaker 2: Mayor Jacob Fry. And so what that demonstrates is they

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Speaker 2: really have established significant political connections. And the sources that

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Speaker 2: I've spoken to in the state have indicated that, especially

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Speaker 2: if you're a Democrat, alienating the Smally community, you run

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Speaker 2: that risk at your own peril because they are a

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Speaker 2: significant voting block in Minneapolis, and in order to carry

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Speaker 2: the state, you have to do well in the capital city.

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Speaker 1: I noticed that four Republican Congressmen from the state had

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Speaker 1: written a pretty strong letter tom Ember, of course, as

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Speaker 1: the Republican whip, which is the third highest position in

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Speaker 1: the House on the Republican side, and they say in

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Speaker 1: their letter to the US Attorney quote, as you know,

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Speaker 1: officials estimate a billion dollars have instolen under the waltsh

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Speaker 1: administration since twenty twenty. We have written the walts administration

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Speaker 1: on numerous occasions inquiring about the feeding our future fraud scheme,

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Speaker 1: as well as fraud in the housing Stabilization Services Program,

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Speaker 1: childcare Assistance program, and Minnesota's early intensive developmental and behavioral

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Speaker 1: intervention program with no avail. Recently, it has come to

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Speaker 1: our attention, quote, millions of dollars in stolen funds have

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Speaker 1: been sent back to Somalia, where they ultimately landed in

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Speaker 1: the hands of the terror group how Shabab. We are

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Speaker 1: deeply disturbed by these reports. What is your sense and

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Speaker 1: what are your sources tell you about the degree to

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Speaker 1: which terrorist groups in Somalia were actually able to attract

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Speaker 1: and to use American taxpayer money.

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Speaker 2: Yes, so I want to be clear here on the

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Speaker 2: claim that we were making in the piece, because some

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Speaker 2: people have misinterpreted it. Our argument is that after we

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Speaker 2: realized the scope of the fraud in the state of

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Speaker 2: Minnesota pretty quickly, one of the first questions you'll have

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Speaker 2: is said, like, okay, well, where's the money going? And

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Speaker 2: it can be tracked to various sources. Sometimes people are

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Speaker 2: enriching themselves, as mentioned, using it to purchase luxury vehicles,

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Speaker 2: real estate, things of that nature. Significant funds are also

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Speaker 2: being sent back to Somalia to support family members. Minnesota

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Speaker 2: is the largest concentration of Somali's outside of Somalia itself,

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Speaker 2: and that is a diaspora that sends significant funds back home.

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Speaker 2: We develop numerous law enforcement and chunter terrorism sources, one

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Speaker 2: individual in particular, it's served on the JTTTF in Minneapolis

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Speaker 2: for many years, and what these sources confirmed to us

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Speaker 2: was that as this money is getting sent back to Somalia,

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Speaker 2: it is primarily going through whole wala networks, which are

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Speaker 2: informal money transfer networks that are prominent in Islamic countries

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Speaker 2: and countries that don't have traditional banking sectors like we

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Speaker 2: would see here in the West, and that because al Shabab,

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Speaker 2: the al Qaeda affiliate, controls significant chunks of Somalia, when

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Speaker 2: money is ending up in its territory, when it's going

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Speaker 2: through money transfer networks in its territory, it is absolutely

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Speaker 2: getting a cut of that money. So our claim is

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Speaker 2: not that these fraud rings were specifically ripping off American

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Speaker 2: taxpayers in order to fundraise for Al Schibal, but that

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Speaker 2: inadvertently tons of this money has ended up in their coffers,

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Speaker 2: which is obviously a serious problem and it has national

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Speaker 2: security implications as well.

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Speaker 1: Don't these historically traditional but very very private banking networks

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Speaker 1: essentially make it impossible to apply the normal patterns we

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Speaker 1: use with traditional banking to try to trace money.

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Speaker 2: That's absolutely correct, And the investigators that we've spoken to

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Speaker 2: have indicated to us that one, this is something that

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Speaker 2: we know is going on, but two, in terms of

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Speaker 2: bringing a criminal indictment in regards to this behavior, it

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Speaker 2: is extremely difficult. And so these are in some sense,

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Speaker 2: you know, dark money networks. It becomes very difficult trace

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Speaker 2: exactly where these funds are going.

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Speaker 1: Well in that sense, do we need a new law

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Speaker 1: that applies the same money tracking capabilities to these networks

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Speaker 1: that we apply to American banks.

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Speaker 2: I think that this is yet another problem that this

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Speaker 2: story exposes where we do need to kind of go

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Speaker 2: back to the drawing board from a policy standpoint and

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Speaker 2: try to come up with a solution of that nature,

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Speaker 2: because yet again, this is a situation where, at least

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Speaker 2: from the criminal investigators that I'm speaking to, their saying,

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Speaker 2: you know, our hands are somewhat tied on this issue.

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Speaker 1: And I think that's because we currently don't have any

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Speaker 1: law which requires these groups to conform to any kind

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Speaker 1: of reporting they're historically by definition secret. It becomes a

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Speaker 1: real cultural fight to suggest that we have an overriding interest.

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Speaker 1: I was fascinated by the story in part because I'm

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Speaker 1: working on a general problem position that bureaucratic, big government

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Speaker 1: socialism simply has a massive propensity towards corruption, whether it's

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Speaker 1: in Chicago, Minneapolis, New York, the entire emergence for a

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Speaker 1: while of the green industries, where the US governments passing

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Speaker 1: out money to people who would then magically go bankrupt

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Speaker 1: having got the money. One of the books I've been

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Speaker 1: really touting is by Chris Papst called The Failure Factories,

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Speaker 1: which is a study of the Baltimore City schools in

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Speaker 1: which at least forty percent of the students cannot read

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Speaker 1: or write when they graduate. It's the third most expensive

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Speaker 1: school system in the country. When I read it, it

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Speaker 1: hit me that, in a very real sense, if you

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Speaker 1: have a large school system certifying that, for example, a

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Speaker 1: student has been in class, when in fact they'd never

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Speaker 1: been in class. They had some students who they interviewed

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Speaker 1: who had never ever gone to class, but we're counted

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Speaker 1: on the rolls for the purpose of getting money. That's fraud.

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Speaker 1: It's really parallel to the Minneapolis situation. It turns out

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Speaker 1: we have a really really bright young assistant named Derek,

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Speaker 1: and Derek has taken on Chris's assignment and has done

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Speaker 1: an initial, very surface level look at New York, Chicago,

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00:26:32,480 --> 00:26:37,639
Speaker 1: Los Angeles, Indianapolis, Minneapolis, and Saint Paul, and again and

441
00:26:37,680 --> 00:26:43,320
Speaker 1: again you'll have very expensive bureaucracies that are simply not delivering.

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00:26:44,400 --> 00:26:47,280
Speaker 1: And their conclusion, this was part of what perhaps finally

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00:26:47,320 --> 00:26:51,879
Speaker 1: decided after eight years of work, that the systems have

444
00:26:52,000 --> 00:26:55,439
Speaker 1: concluded they can't actually teach, but they can lie about it,

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Speaker 1: and so if they methodically lie about it, they'll get

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Speaker 1: paid as though they were teaching.

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Speaker 2: Absolutely, and you're right to point out the parallels in Minnesota.

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00:27:05,880 --> 00:27:08,440
Speaker 2: I mean, hungry children aren't actually getting fed, but look

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00:27:08,520 --> 00:27:11,200
Speaker 2: on paper, you know, it's thousands that are getting fed,

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00:27:11,280 --> 00:27:13,800
Speaker 2: and we're spending all this money, so of course we're

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00:27:13,800 --> 00:27:18,160
Speaker 2: accomplishing something. Same with autism, Same with the Housing Stabilization

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Speaker 2: Services program, which was aiming to get the elderly, the

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Speaker 2: mentally ill, people with addictions into housing. Well, none of

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00:27:25,520 --> 00:27:29,119
Speaker 2: this was happening, but on paper, it seemed like everything

455
00:27:29,160 --> 00:27:31,159
Speaker 2: was running smoothly. And that's similar to kind of what

456
00:27:31,200 --> 00:27:33,840
Speaker 2: you're pointing out in regards to Baltimore. There, well, on paper,

457
00:27:33,880 --> 00:27:35,720
Speaker 2: all these children are getting educated.

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Speaker 1: I think that the Office of Management Budget should be

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00:27:39,560 --> 00:27:43,199
Speaker 1: directing all of the federal agencies that are involved in

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00:27:43,240 --> 00:27:46,640
Speaker 1: giving out money to do this kind of forensic analysis

461
00:27:46,960 --> 00:27:49,399
Speaker 1: to decide whether or not, in fact, we're paying for

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00:27:49,480 --> 00:27:53,080
Speaker 1: an amazing amount of dishonesty and theft and corruption. I'm

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00:27:53,119 --> 00:27:55,240
Speaker 1: curious where do you go from here? You mean, you've

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00:27:55,520 --> 00:27:58,520
Speaker 1: sort of scratched the surface of what may be the

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00:27:58,560 --> 00:28:03,399
Speaker 1: biggest corruption and fraud story in American history. And I

466
00:28:03,440 --> 00:28:07,080
Speaker 1: know this is part of your general interest nationally in

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00:28:07,119 --> 00:28:09,200
Speaker 1: the topic where do you guys go from here?

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Speaker 2: I think that there are still some unanswered questions on

469
00:28:13,880 --> 00:28:16,399
Speaker 2: the ground in Minnesota. You know, I had done some

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00:28:16,560 --> 00:28:19,520
Speaker 2: on the ground reporting in the state for this story.

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Speaker 2: Perhaps I will be back at some point in the

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Speaker 2: near future. I mean, in particular, I think the main

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Speaker 2: kind of unanswered question in Minnesota at this point is

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Speaker 2: how was this allowed to go on for so long?

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Speaker 1: We have some.

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00:28:32,359 --> 00:28:35,080
Speaker 2: Idea, we have some insight into that, but I do

477
00:28:35,119 --> 00:28:37,840
Speaker 2: think that there are some serious unanswered questions there, and

478
00:28:37,880 --> 00:28:40,480
Speaker 2: there needs to be a real accounting of when were

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00:28:40,480 --> 00:28:43,800
Speaker 2: the alarm bells first raised, when did various government officials

480
00:28:43,840 --> 00:28:46,360
Speaker 2: become aware that they had a problem, what steps were

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00:28:46,400 --> 00:28:48,840
Speaker 2: taken to address it. So I think that there's more

482
00:28:48,880 --> 00:28:53,280
Speaker 2: to push on there. I also think that Minnesota is

483
00:28:53,680 --> 00:28:56,080
Speaker 2: it's highly unlikely that's the only state in the Union

484
00:28:56,320 --> 00:28:59,600
Speaker 2: that is dealing with a problem like this, and so

485
00:28:59,720 --> 00:29:02,200
Speaker 2: I be interested in doing some digging into whether or

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00:29:02,280 --> 00:29:06,560
Speaker 2: not there are similar patterns emerging in other jurisdictions, and

487
00:29:06,680 --> 00:29:09,480
Speaker 2: we perhaps might be able to take what we've learned

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00:29:09,880 --> 00:29:12,800
Speaker 2: in Minnesota and apply it in some other areas and

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00:29:12,880 --> 00:29:15,000
Speaker 2: compare what's going on in different places.

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Speaker 1: Well, I think in that sense, you can be an

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Speaker 1: enormous asset and setting up for the federal government kind

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00:29:22,120 --> 00:29:25,479
Speaker 1: of a framework for what you look for and what

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00:29:25,600 --> 00:29:29,000
Speaker 1: questions you ask. And I have a hunch that we

494
00:29:29,080 --> 00:29:33,200
Speaker 1: will be astounded at the amount of total corruption and

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00:29:33,240 --> 00:29:37,640
Speaker 1: fraud that we discover, certainly in Medicare and medicaid, but

496
00:29:37,840 --> 00:29:42,760
Speaker 1: again in housing programs and the various green programs, being

497
00:29:42,760 --> 00:29:46,080
Speaker 1: a number of people who got money and the worthy

498
00:29:46,120 --> 00:29:48,560
Speaker 1: cause of the environment, who then just went out and

499
00:29:48,560 --> 00:29:52,880
Speaker 1: went bankrupt. But kept the money. It's absurdity. So I

500
00:29:52,880 --> 00:29:55,680
Speaker 1: would get very excited because I realized that the City

501
00:29:55,760 --> 00:30:00,640
Speaker 1: Journal in the Manhattan Institute are centers of really intelligent,

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00:30:01,240 --> 00:30:06,320
Speaker 1: hard working analysis, and I think that by you doing it,

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00:30:06,400 --> 00:30:11,080
Speaker 1: you really move the seriousness of this issue very dramatically.

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Speaker 2: I mean, that's certainly our hope, and at least in

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00:30:14,360 --> 00:30:17,000
Speaker 2: regards to the Minnesota story, it's been very gratifying to

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00:30:17,040 --> 00:30:20,040
Speaker 2: see the way that this has caught the public's attention,

507
00:30:20,480 --> 00:30:23,920
Speaker 2: because now it is impossible for folks to ignore. Whether

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00:30:24,000 --> 00:30:25,680
Speaker 2: or not they want to quibble with us on some

509
00:30:25,720 --> 00:30:29,040
Speaker 2: details of our reporting, that's all fine, but the reality

510
00:30:29,160 --> 00:30:32,120
Speaker 2: is everyone is now acknowledging that this is a billion

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00:30:32,160 --> 00:30:34,520
Speaker 2: dollar problem in the state, and that's progress.

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Speaker 1: I want to thank you for joining me, and I

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00:30:37,360 --> 00:30:41,520
Speaker 1: remind people that your article, co authored with christopherfo the

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00:30:41,680 --> 00:30:45,960
Speaker 1: largest fundro al Shabab is the Minnesota Taxpayers available now

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00:30:46,440 --> 00:30:50,280
Speaker 1: at citydash Journal dot org, and our listeners can follow

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00:30:50,280 --> 00:30:52,800
Speaker 1: the work you're doing at the Manhattan Institute. But this

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Speaker 1: has been really, really helpful. I appreciate you doing it.

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Speaker 2: There's a pleasure to join you today.

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Speaker 1: Thank you to my guest, Ryan Thorpe, New World is

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00:31:02,800 --> 00:31:06,560
Speaker 1: produced by Gangwi three sixty and iHeartMedia. Our executive producer

521
00:31:06,600 --> 00:31:10,480
Speaker 1: is Guarnesi Sloman. Our researcher is Rachel Peterson. The artwork

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00:31:10,520 --> 00:31:13,920
Speaker 1: for the show was created by Steve Finlay. Special thanks

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00:31:14,040 --> 00:31:16,200
Speaker 1: to the team at Gingwich three sixty. If you've been

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00:31:16,240 --> 00:31:19,240
Speaker 1: enjoying Newtsworld, I hope you'll go to Apple Podcast and

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Speaker 1: both rate us with five stars and give us a

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Speaker 1: review so others can learn what it's all about. Join

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Speaker 1: me on substack at gingwishtree sixty dot net. I'm Newt Gingrich.

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Speaker 1: This is Newsworld