Hungering for clarity after food fraud

Opinion editor's note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.

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It's bad enough that Minnesotans were hit with the sickening news that millions of dollars that should have gone to feed poor children during the pandemic instead allegedly were siphoned off by the very groups charged with distributing the funds.

It makes matters worse that there's been a growing dispute involving Gov. Tim Walz, Attorney General Keith Ellison and a Ramsey County judge over the basic facts in the fraud case.

Last week, the FBI and the U.S. attorney's office announced federal charges against 49 people associated with the nonprofit Feeding Our Future (FOF). Those indicted individuals stand accused of taking $250 million in federal child nutrition funds administered through the state Department of Education (MDE).

Ever since the FBI investigation became public early this year, news media reports had unquestioningly reported, based on MDE statements, that Judge John Guthmann had ordered MDE to resume payments to FOF in April 2021. The department had stopped paying the nonprofit in March 2021, suspecting fraud.

Now with the federal charges, the public has more substantial evidence of that alleged fraud. But following the announcement of indictments last week, Walz decried Guthmann's alleged order, saying he "would hope there would be an investigation into that." That outburst inspired a belated pushback from the judge, who promptly issued a formal statement calling the governor's remarks, MDE statements and media reports about his order "false."

The judge is correct; he did not formally issue an order for MDE to resume payment. MDE's suspension of reimbursements to FOF was not the question before the judge on April 21, 2021. That hearing concerned only a separate FOF complaint about delays in MDE's approval or rejection of its applications for new distribution sites.

David Schultz, a Hamline and University of Minnesota professor and political observer who reviewed but is not involved in the case, told an editorial writer that it looked like a classic administrative law case in which lawsuits are filed to force government agencies to issue permits or licenses or, in this case, approve partner sites promptly.

"I don't see anything that says the court compelled MDE to resume payments," he said.

In recent days, Walz and MDE retreated from their claim that Guthmann formally ordered payments. Still, as recently as Tuesday, Ellison asserted in a WCCO Radio interview that the court "ordered payment." On Wednesday, a spokesman from his office told an editorial writer that if Ellison called the judge's action an order, he misspoke.

Longtime observers of state government struggle to recall a precedent for this kind of blunt contradiction on an important factual point among senior public officials. It's the type of blunder that threatens to further undermine public confidence in the ability of government to oversee and distribute taxpayer dollars properly. The allegation that criminals can defraud a well-intended public relief program for the poor is damaging enough.

It's true that during the oral argument at the much-discussed hearing, FOF pressed the reimbursement issue. It's also correct that transcripts show the judge's skepticism about MDE's legal justification for stopping payment. But he made it clear that FOF would have to file a separate complaint that would have to be separately litigated for him to rule on the payments issue. He later ruled against MDE only on the application decision delays.

Former Ramsey County Attorney Susan Gaertner, who also isn't involved in the case, told a Star Tribune reporter this week that although there was no formal order from the judge, she could see why MDE could take Guthmann's comments during the hearing to mean that the agency would be hard-pressed to stop payments.

"The bottom line is that Judge Guthmann did not order them to continue payments. At the same time, it is understandable why the Department of Education felt like they had to continue paying," Gaertner said. "A fair reading of the federal regulations seemed to require it, and more importantly though, they had to feel constrained to not in any way interfere with the FBI investigation."

By the time the question of the payments again came before Guthmann, MDE had voluntarily resumed dispensing large sums to FOF rather than continuing to fight the legal battle. Ellison and MDE have said they feared tipping off FOF to the existence of the FBI probe that MDE's concerns had by then inspired. The attorney general continues to point out, correctly, that it was MDE and the state that initially blew the whistle on FOF and worked with the feds to secure the indictments.

Still, MDE leaders acknowledged to the Star Tribune in May that, had they required extensive receipts and other paperwork, they may have been able to end the department's relationship with FOF.

Why the decision was made to continue the payments and why stronger state oversight wasn't in place are among the critical unanswered questions in this tangled affair. Minnesotans deserve answers to those questions — and accurate, clear communication from their elected officials.