A day after officially entering the race for a third term as governor, Minnesota’s Tim Walz came under fire over serious allegations of fraud in a state housing assistance program. The Housing Stabilization Services program, funded through Medicaid dollars to help vulnerable residents secure stable housing, ballooned from $2.6 million in 2017 to $107 million by 2024—only for the administration to shut it down amid “credible allegations of fraud.” The interim commissioner of the Department of Human Services (DHS), Shireen Gandhi, has formally sought federal permission to terminate the program. Meanwhile, the DHS Inspector General, James Clark, told state lawmakers that payments to 115 providers have been suspended, and pledged a more aggressive anti‑fraud posture going forward.
Critics have seized on the timing and handling of the scandal. Representative Kristin Robbins (R‑Maple Grove), who chairs the state House’s Fraud Prevention Committee and is herself running for governor, contends that the administration acted only after investigative media reporting by KARE 11. She further dismissed Walz’s new executive order establishing an “Inspector General Coordinating Council” as a superficial political move lacking genuine independence. Supporters of accountability say the reforms are overdue, while skeptics question whether they go far enough.
In response, Walz defended his record and pledged zero tolerance for misuse of taxpayer funds. He pointed to newly expanded data sharing across agencies and the appointment of an independent inspector general as evidence that his administration is strengthening oversight. He argued that addressing fraud directly is essential, because financial abuse “takes resources away from those who need them most.” The Housing Stabilization Services program is slated to end on October 20, pending federal approval, and the unfolding controversy becomes the latest amid a string of fraud scandals in Minnesota—such as issues in Medicaid billing and the “Feeding Our Future” controversy—that have tested public trust in state institutions.
