Troubling testimony— that a state child care assistance program was defrauded and some money may have ended up with terrorist organizations — has drawn a woefully lacking response from DHS.

By Mary Franson and Matt Dean

January 26, 2019 at 1:03AM

Scott Stillman, a former digital investigator for the state Department of Human Services, testified last spring before a legislative committee investigating alleged efforts to defraud Minnesota’s Child Care Assistance Program. (The Minnesota Star Tribune)

In May of last year, a Department of Human Services whistleblower, Scott Stillman, came forward to testify that up to $100 million per year is being stolen from the Child Care Assistance Program (CCAP) by criminal day care center operators who are overbilling the state. What seems even more unbelievable is that investigators believe some of that money has found its way into the hands of terrorist organizations.

Fox 9 TV broke the story, and has done exhaustive reporting — using Mr. Stillman and other DHS employees who spoke on the condition of anonymity — on the scheme linking taxpayer-funded payments to child care providers and money flowing overseas to support terrorism.

With such a troubling report from its own investigators, we fully believed that DHS would either immediately come forward with evidence to dispute the testimony or a detailed explanation of what was discovered. Neither has happened.

What we have observed since then is unlike anything we've seen in our collective 23 years in the Legislature. Leaders of the Department of Human Services (the people who administer CCAP) have no answers for simple questions, their behavior has been positively daffy and there seems to be no urgency among those in power to provide the taxpayers with any explanation.

The House made a formal data request to DHS for e-mails, text messages and memos relating to the whistleblower's claims of fraud and the connection to terrorism. Eight months have passed and we still haven't learned anything, despite the department's legal obligation to turn the information over. Clearly, there is no intention of complying with the House request.

An election has since come and gone, and now we have a new administration and new majority to sweep this back under the rug.

Just as troubling as DHS foot-dragging is its distrust of its own investigators, hired to find fraud and root it out. In December, we learned, according to testimony in committee, that in response to the original allegations, employees of the Office of the Inspector General (OIG) — the state's fraud, waste and abuse watchdog, which is housed within DHS — had produced an internal report on the size and scope of fraud in CCAP.

Inspector General Carolyn Ham testified that her investigators have a sterling record of identifying fraud. However, when presented with reports of fraud and money laundering, the OIG embargoed the internal investigation and hired an outside consultant to look at what's broken.

At first glance, this appears to be a whitewash, or perhaps worse. It seems to be looking for a way to discredit the investigators in order to redirect blame from the crooks to their own cops who were trying to catch them.

When we first heard the initial reporting on the scandal, we were skeptical. After all, these are pretty outrageous claims. But the investigators are former law enforcement officers. Brazen child care fraud has happened in Minnesota and beyond. It is our responsibility to provide oversight on this program, and given the information we have, and the persistent deafening silence from DHS, we believe the whistleblower.

All three DFL members of the Subcommittee on Child Care Access and Affordability — our newly elected Lt.-Gov. Peggy Flanagan among them — skipped last month's subcommittee hearing. No comment has been issued by any of the absent members or Gov. Tim Walz.

With eight months having passed since the explosive allegations, Minnesota taxpayers have zilch for answers from the administration. All they have are multiple government sources that say $100 million per year is flying out of state coffers and into undeserving and possibly threatening hands.

This is the bottom line: Either the administration is too inept to run the program well enough to tell what the heck is going on, or it is covering up massive fraud, plain and simple. Either way, the Legislature should have no confidence in the OIG and she should immediately be fired to allow for a clean investigation by the new governor.

Mary Franson, R-Alexandria, is a member of the Minnesota House. Matt Dean, of Dellwood, was a member of the House from 2005 to 2018.