Minnesota governor proposes to tackle fraud after Trump allegations led to immigration crackdown

Democratic Minnesota Governor Tim Walz said on Thursday he introduced a proposal to tackle fraud in state programs after President Donald Trump's administration used fraud allegations to deploy federal armed immigration agents in the state.

The Republican Trump administration engaged in a months-long immigration crackdown in Minnesota, during which federal agents shot and killed two U.S. citizens in January. The federal government also used fraud allegations to freeze funds meant for social programs in the state. The deportation surge in the state was curtailed this month.

"This package strengthens oversight, improves detection, expands enforcement, and increases penalties to protect every dollar Minnesotans depend on. We've followed the experts, audits, and proven roadmaps; now it's time for the Legislature to act," Walz said in a statement on Thursday.

Walz's proposal, called the "Anti-Fraud Package," expands audit and internal control, establishes a centralized office of inspector general, expands the Bureau of Criminal Apprehension's subpoena authority, and establishes permanent bans from state contracts and grants for individuals convicted of fraud, the governor's office said.

It also creates a new theft of public funds statute, raising penalties by 20% and extending statutes of limitations to seven years for certain fraud-related crimes.

The Trump administration halted $259 million of deferred Medicaid payments to Minnesota on Wednesday. The state said the latest freeze of funds came on top of federal action to withhold more than $2 billion in annual Medicaid funding to Minnesota.

The state's health department says Minnesota has submitted a corrective action plan to convince the Trump administration to reverse course.

Trump has alleged that Somali communities in Minnesota have engaged in fraud. Trump has cast his actions as aiming to tackle fraud and improve domestic security.

Rights groups say the crackdown has created a fearful environment and that Trump has used isolated fraud cases as an excuse to target immigrants. They also dismiss Trump's ability to tackle fraud, citing pardons from him to those who have faced fraud convictions in the past.

-Kanishka Singh/Reuters