The “Money Spigot” isn’t just closed—it’s being investigated! As of January 2026, the political landscape of Minnesota has been scorched by a federal investigation that feels like a scene from a high-stakes crime thriller. House Oversight Chairman James Comer has officially dropped the hammer, issuing subpoenas to Governor Tim Walz and Attorney General Keith Ellison, demanding sworn testimony regarding what federal prosecutors are calling the largest “industrial-scale fraud” in American history.
The numbers are as staggering as the allegations: a potential $9 billion in taxpayer funds—nearly half of the state’s total spending on high-risk social programs since 2018—has allegedly vanished into a web of “ghost daycares,” shell companies, and fraudulent housing schemes.
For the people of Minnesota, and for taxpayers across the nation, the question is no longer if the money is gone, but how it was allowed to happen on such a massive scale.
The Great Heist: “Fraud Tourism” and Ghost Programs
The investigation, led by First Assistant U.S. Attorney Joe Thompson, has uncovered a reality that Thompson says is “swamping” the state of Minnesota. It isn’t just a few “bad actors” skimming off the top; it is a systemic exploitation of Minnesota’s social safety net.
The “Industrial-Scale” Tactics include:
- Ghost Daycares: Centers receiving millions in subsidies that allegedly served zero children. A viral investigative video by influencer Nick Shirley showed facilities with misspelled signs and empty classrooms—reports that HHS has used to justify a historic freeze on all federal child care payments to the state.
- Fraud Tourism: Two Philadelphia residents were recently charged for registering as Minnesota providers despite having no connections to the state, simply because they saw Minnesota as “easy money.”
- International Siphoning: Stolen funds weren’t just used for luxury cars and real estate; investigators allege millions were wired to banks in China and Kenya, creating an “investigative black hole.”
Chairman James Comer is now pushing for the “receipts,” demanding every email, text, and memo between the Governor’s office and the agencies responsible for oversight. “Governor Walz and AG Ellison have either been asleep at the wheel or complicit,” Comer stated. “Hardworking Americans deserve to know why their money was used to fund luxury lifestyles and international transfers instead of feeding children.”
The “America First” Purge: Accountability Under Oath
This “9 Billion Dollar Reckoning” is the centerpiece of a broader America First mission to dismantle entrenched bureaucracy and restore fiscal sanity. For years, critics say Minnesota’s “immigrant-friendly” policies were weaponized by fraudsters who exploited the lack of verification measures.
The Federal Response has been swift and severe:
- The Funding Freeze: HHS Deputy Secretary Jim O’Neill has activated the “Defend the Spend” system. For the first time, all 50 states must provide “justification, a receipt, or photo evidence” before federal child care dollars are released.
- The Subpoena Power: By forcing Walz and Ellison to testify under oath, the House Oversight Committee is stripping away the political protections that allowed these “rip-offs” to go unchecked for a decade.
- The Law Enforcement Surge: The FBI and Homeland Security have surged into the Twin Cities, focusing on “fraud empires” that have allegedly funneled taxpayer cash into overseas accounts.
President Trump has made his stance clear: the days of “unvetted spending” are over. Under the 2026 “America First” protocols, the focus has shifted from “sending checks” to “securing justice.”
The Defense: “Sensationalism” vs. “The Truth”
Governor Tim Walz has dismissed the $9 billion figure as “speculating for sensationalism,” arguing that his administration has been working to fix these programs for years. He and AG Ellison have accused the federal government of “politicizing” the issue to defund social programs that help genuine families in need.
“We stopped payments in July and turned the case over to law enforcement,” Walz argued during a recent press conference. “We are the ones fixing it.”
However, the “Receipts” tell a different story. Whistleblowers within the Minnesota Department of Human Services (DHS) have alleged that data was deleted and records withheld to cover up the extent of the negligence. The Oversight Committee is now investigating whether the Walz administration ignored early warning signs of fraud as far back as 2022 to avoid political fallout.
Conclusion: The End of the “Easy Money” Era
The subpoena of a sitting Governor and Attorney General is a historic moment for Minnesota. It represents the final collapse of the “money spigot” that allowed billions to flow into “ghost programs” while real families scraped by.
As James Comer prepares for the February 2026 hearings, the nation is watching. This isn’t just about Minnesota; it’s a warning to every state-run program in the country. The era of unchecked, “paper-thin” oversight is being replaced by a relentless demand for transparency.
The “9 Billion Dollar Ghost” is finally being hunted, and for the first time in years, the “America First” hammer is ensuring that the taxpayer gets the last word.
