Feeding Our Future fraud investigation casts scrutiny on Minnesota nonprofit oversight

Federal nutrition fraud allegations against a Minnesota organization are now spurring scrutiny of the state Attorney General's Office and its role overseeing nonprofits.

Jim Schultz, one of several Republicans running to unseat Ellison, is vowing to bolster resources to the charities division, if elected. The criticism is coming on the heels of reports that the FBI is investigating the nonprofit Feeding Our Future and some of its contractors for misspending millions of federal dollars meant to feed needy children.

"I think there were meaningful red flags earlier in the process that really should have triggered an investigation," said Schultz, a Minnetonka attorney. "I just don't think this is a priority for him."

Ellison's office counters that they've done the most they can with limited resources, asking the Legislature repeatedly for more funding to increase the charities division, which has 10 attorneys, financial analysts and charities registrars.

"This claim is more campaign-year nonsense from a candidate for attorney general who appears to know little about the work of the Charities Division," John Stiles, a spokesman for Ellison's office, said in a statement. "Attorney General Ellison would welcome more resources for the Charities Division — and has fought for them."

More than 40,000 nonprofits are registered in Minnesota with the Secretary of State's Office, though some of them may not be financially active. The Minnesota Council of Nonprofits counts more than 9,000 nonprofits that have at least one employee.

The Attorney General's Office is responsible for overseeing any charitable organization that solicits for donations in Minnesota, making sure they follow governance rules and properly oversee charitable assets.

The office, which also has several other divisions, has half the number of attorneys it had in the 1990s and state funding is the same as it was 20 years ago, Stiles said. The office receives $54 million this year. Gov. Tim Walz is proposing a $4 million increase this year for the office.

Despite the stagnant staffing, he added that the office has taken on high-profile cases such its case against the Otto Bremer Trust to remove trustees and action last year against a St. Paul professor accused of misusing money she collected in Philando Castile's name.

In January 2019, the Attorney General's Office sent a letter to Feeding Our Future's executive director Aimee Bock at her Rosemount home saying they heard the nonprofit may be soliciting donations in Minnesota but wasn't properly registered.

A month later, the Attorney General's Office sent another reminder. Feeding Our Future registered March 11, 2019. But over the next two years, the nonprofit failed to submit any annual reports or required tax Form 990s.

In October 2021, the agency notified Feeding Our Future that it was withdrawing it as a registered charity. After a reporter asked Bock about it on Jan. 27, Feeding Our Future filed the proper paperwork and fees the next day, saying the failure was inadvertent because the notice was sent to a wrong address.

On Feb. 8, nearly three weeks after the FBI raided Feeding Our Future's offices, the Attorney General's Office notified Feeding Our Future that they were investigating. On Thursday, Ellison's office filed a petition requesting a judge supervise the dissolution of Feeding Our Future as the operation voluntarily dissolves. It's an unusual measure for the agency to take, with the last such petition filed in 2014.

The Attorney General's Office isn't the only agency being questioned. Some legislators have called for an audit of the state Department of Education, which distributes the child nutrition program money.

The U.S. Government Accountability Office has also raised concerns for years about sloppy oversight of the federal nutrition programs, saying the U.S. Department of Agriculture failed to close loopholes that allow meal providers to pad bills.